Re: Problem with ADT Security Company

["R.H.Campbell" <rh.campbell@xxxxxxxxxxxxx>]

See continuation of discussions below...

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> Not to question your business plan, but that is when the alarm company,
> that
> has the "free" marketing approach, finally starts to make some profit. The
> rate doesn't drop because, instead of paying off upfront costs which they
> are doing during the first term, they are making up the profit that was
> not
> there during the first term.

RHC: Perhaps, but IMO that doesn't justify them building in a clause that is
too easily missed by any client. It's one thing to explain the clause up
front; it's quite another to hide it in the fine print. Somehow I can't see
most salesmen from most of these "free system" mass marketing companies
bringing this to the attention of the client up front for fear of losing the
sale. To simply rely on all clients to fully read their contracts before
signing is totally unrealistic (although legally when they sign they agree
they have). I think it is one of those situations that sits on the edge....
>
> There is NOTHING of value or benefit to doing so
>> for the client !!
>
> Sure there is. A client that signed on with me in 1999 is paying far less
> than the customer that signs up today. If a client did not agree to have
> the
> auto renewal, which I have some, and wants to continue using us as their
> security provider after their agreement expires, then I go out and sign
> them
> to a new agreement at today's rate, so now they are paying more than if
> they
> had simply let it renew at the old rate.

RHC: Good for you. That's both a good idea and a good incentive for the
client to stay with you. But I'm sure you tell him up front that the auto
renewal clause is there, AND give him that clear benefit for both allowing
it, and staying with you. I nor most customers would have any kind of
problem with that; however, that is NOT how most of these auto renewal
clauses are implemented. I guess it pretty much boils down to how the clause
is handled up front. So perhaps "can be bordering on unethical depending
upon how it is administered" is more accurate,. Point taken !!
>
> Most customer hardly
>> remember what kind of system they have, let alone when a multi year
> contract
>> is coming up for renewal !!!!!
>
> No, they believe what they have assumed, thought, someone else told them,
> wished to be true, and any other reason they can come up with, anything
> except for BEING RESPONSIBLE FOR THEIR OWN AFFAIRS. The auto renewal
> clause
> was in the agreement from day one. If they don't read anything else in an
> agreement, they read the terms, where the clause is located, and they have
> three business days to question, negotiate or strike the clause. To say
> they
> don't remember is BS. I'll bet everyone of them can tell you the day their
> last car payment is due right off the top of their head. It is called
> responsiblity and in reality the only time it becomes a problem is when
> they
> want out. All of sudden they come down with Alzheimer's.

RHC: True ! It's amazing how people develop memory loss when it suits their
purposes. But IMO that still doesn't justify an automatic renewal clause
that is slid in within the fine print for the purpose of locking him in
without his knowledge. One can always argue that the client should have read
his contract in advance but that never reflects the reality of how most
people go about doing business. That's unfortunately why consumer protection
laws become sometimes necessary when all else fails..
>
>
> So you are saying that a 130 year old, multi Billion dollar industry,
> involving all aspects of our life, has been built on unethical business
> practices? The one constant that I can see in the business world is that
> all
> business owners are free to choose their own business plan. Some choose to
> be pioneers but the mass majority follow what has been the norm. With that
> being said, the norm on the customers side is that they just claim to
> being
> abused when they want out. I have never seen one of my customers, that are
> paying 1995 monitoring rates because of auto renewal, come running to me
> and
> say "Boy, you've been monitoring me for 10 years, you need to raise my
> rate." They are as happy as clams just were they are at. They are reminded
> of that everytime they see a Brinks or ADT advertisement showing that $30
> plus monitoring fee.

RHC: No, you're taking what I say and putting words in my mouth. Our
industry is no more or less unethical than any other industry. But we do
have our own dubious practices ! What I AM saying is there are some things
in our industry (like all others) that come pretty close to the line, and a
long term auto-renewal clause CAN be one of those the way it is USUALLY
adminstered. In some respects, it comes down to basic fairness ! Your
approach clearly follows that since you give your clients a clear and
obvious benefit for the auto-renewal; however, the example I quoted you of a
local company that does that here, is a clear example where the clause is
mis-used. Even within the ranks of dealers up here, he has been severely
criticized for the arbitrary way he has held clients to this clause and
basically extorted the money from them in situations where he could have
been more reasonable and fair about it. Nor do I know any other company
large or small that follows that practice up here..

BTW, thanks for your comments and clarifications, and a good discussion. I
like your idea of a long term price guarantee as part of the long term
contract. Benefits given for benefits received !! I wish it was more
common...

RHC