No More Free Equipment
09 June 2016

No More Free Equipment

Some of us have been around long enough to remember the birth of the free alarm system. But changing times are requiring us to re-examine our strategies. What is the true value of a free security system?

In the beginning

If you step back in time and consider the origins of our business, you’ll find that electronic alarm systems were traditionally big-ticket items. Affluent consumers valued security systems as technology that would protect their investment, paying thousands of dollars plus an ongoing fee for professional monitoring services.

As a wider variety of alarm systems and devices became available at a lower cost, and as communication methods advanced, marketers recognized security as a growth industry poised for integration into the lives of everyday consumers. Eventually, several companies defined a business model that introduced the “zero-down” market.

By financing or reimbursing the upfront costs of account creation (commission, installation, equipment, overhead) through a dealer program, independent alarm companies could afford to mass-market alarms.

So the free basic alarm system was born – zero down, $24.99 a month – and it was a winner. The market grew exponentially with the entry of new players who continued the strategy and refined the message: Alarms are free.

The need for a new narrative

We are cycling out of this period in our industry into a new, dynamic marketplace with a growing range of high-tech offerings. Market penetration remains low, and too many alarm dealers focus on simply recycling consumers who already have home security. It’s time to seek out new consumers who are interested in home security, but also are ready for the idea of products beyond the free system.

There are hundreds of thousands of homes that need protection, and we have the opportunity to move things in the right direction. We need to re-imagine the market and stop giving away equipment. Instead of simply re-signing customers or giving away alarms, we need to develop pricing that matches the investment we make in new installations.

Accounts with an initial investment are 33 percent less likely to cancel during the first year of service than those who pay nothing up front. When consumers put skin in the game from the beginning, they place greater value on their alarm systems.

Our dealer program excels in that business model, providing the up-front capital you need to stock the latest inventory, hire great people, market your brand and grow your business.

More than just money

There are other benefits to requiring an initial investment:

  • Eliminate customers who are taking what they perceive to be a “freebie.” This reduces your exposure to attrition during the guarantee period and creates a long-term customer.
  • Separate sales reps giving away a system from the reps who can actually sell a system. You can then develop the skills of your reps accordingly through training and coaching. We have plenty of resources to help.
  • Ensure every sale emphasizes value creation by potentially growing a system through enhanced security and the lifestyle of today’s home automation products. That’s an attractive proposition for a homeowner who already understands the importance of investing in their property.

Today, consumers want to be connected and plugged in. Best of all, we have the products and services that enhance their lives and bridge the gaps between home and office. These are our future customers. With the most advanced, reliable and highest-rated service on the market, elite home security certainly shouldn’t be provided for free. Contact us today to become a Monitronics Authorized Dealer and gain access to innovative home security technology.

*This article originally appeared in The Monitor.  

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