Bob Harris
During my travels around the country working with alarm dealers, this question inevitably comes up: "What are other dealers doing about attrition?"

Sadly, in our industry the answer is, "very little." There are a number of companies who take attrition reduction very seriously. These companies tend to steadily grow, spend less on marketing, and enjoy a high number of referrals. Regrettably, however, most companies are spending huge amounts of money on marketing to post big new sales, while investing little or nothing in training to become better at keeping what they already have.

How much does it cost to replace lost accounts? On average, it costs approximately $30 or more to replace a single dollar of lost recurring monthly revenue (RMR).

With the cost of generating new business so high, why do so many security dealers fail to recognize the increased margins, higher profits, and greater market share attained by conscientiously training and arming their good employees with the best tools available to raise the bar when it comes to nurturing customer relationships and earning lasting attrition reduction? The answer is that most alarm companies have entrenched ways of doing things. Too many companies focus on products and marketing rather than on customers. Organization apathy and short-term self-interests are also to blame. In 2000, GE's former CEO, Jack Welch, said, "Businesses love to focus inward. It's not that they dislike customers; they just don't find them as interesting as themselves."

Do you focus inwardly? How do you train and mentor your employees on the best ways to handle angry customers or how to say "no" correctly when you can't say "yes"? Remember that the experience a customer has with your company - positive or negative - is determined by the contacts they have with your employees, as well as the service you provide.

How well do you really listen to your customers, and how flexible are you to adjust your policies to be in better alignment with their needs?

Successful attrition reduction is about competing in the "relationship dimension" - not as an alternative to having a competitive product or a reasonable price, but as a differentiator. If your competitors are doing the same thing you are (as they are, in most cases), then product and price won't give you a long-term sustainable competitive advantage. But if you can get an edge, based on how customers feel about your company, then it's a much more loyal relationship in the long term.

How does a company create loyal relationships? Believe me, I know first-hand how bad it feels to lose a customer, especially when they switch to a competitor. After getting beat up in the '90s by mass-marketed free installs, I was left with no choice but to get creative to find the best possible ways to keep our subscribers, and be able to compete effectively without giving away the store. We concluded and ultimately proved that loyal attitudes and behavior are driven by the customer's perception of value, which is a blend of what the customer receives, how well the relationship is nurtured, and how well your team communicates on a personal level. Added value is created every time a customer is made to feel important, listened to, valued and thanked. It is a major ingredient to long-term loyalty and substantial attrition reduction.

So what can you do to get better at keeping what you have? Train your team on meaningful techniques in the art of communication and customer relations.

Increased loyalty of existing customers creates reduced dependence on low price as a marketing strategy, decreases costs incurred to acquire new business, increases efficiency created by familiarity with customers' needs, and increases margins, higher profits and a greater market share.

Attrition reduction is, in many ways, easier today than it was a few years ago. Today, consumers are thrilled just to be satisfied. It has become the exception rather than the rule when people return phone calls, show up on time, communicate well and actually do what was expected of them. Imagine the payoff you'll receive by actually exceeding expectations and nurturing relationships to turn satisfied customers into absolutely delighted, long-term, loyal clients.

How can you get better at reducing attrition? The question to ask yourself is: How much is it costing you to live with the status quo?


'On average, it costs approximately $30 or more to replace a single dollar of lost recurring monthly revenue (RMR).'