Re: Any tips for a consumer about to purchase a system & contract?

["Bob La Londe" <nospam@xxxxxxxxx>]

"Robert L Bass" <robertbass1@xxxxxxxxxxx> wrote in message
news:MoednUwvsuXL9NLYnZ2dnUVZ_vudnZ2d@xxxxxxxxxxxxxx
>> ...[A long term monitoring contract] often
>> allows a customer to get an alarm system
>> now instead of later.  Just like financing
>> allows us to buy new service trucks...
>
> True, it is possible to buy minimal protection by paying an exhorbitant
> monthly monitoring fee under a long-term, mandatory contract.  However,
> these arrangements are usually only offered to people whose credit rating
> is high enough that they could also obtain more traditional (and almost
> invariably less expensive) financing through their bank or credit union.
> Exercising that option, the consumer may also be able to obtain a more
> comprehensive system.
>

I don't know about that Robert.  Add in labor and overhead and parts and the
extra ten dollars a month for a typical 3 year contract does not cover the
installation.  Its still a gamble for any real profitability.  Basically if
companies had every customer cancel after the contract minimum they would
still lose money.  They have to gamble that a large percentage of them will
continue to pay for the service much longer, plus they have to cover all
those people who refuse to honor their word.  Trust me I have hacked my way
through the numbers several different ways and I am sure you have as well.

The simple fact of the water is most of use would not provide monitoring at
less than around 20-25 a month on a monthly basis or less than 17-19 if
prepaid annually, and we get it with no real qualms from our customers.  So
if we sell "free" systems for another $10 per month on a three year contract
we have to cover the expense of the system, labor and overhead for $360
dollars.

The advantage to your arguement of course is that if the customer finances
the system themselves they can often get the more comprehensive system that
is almost never offered as part of a zero down deal.  There is also the
value of their time.  If they put it on a credit card the interest is
exorbitant, and if they arrange seperate financing then they have to spend a
great deal of their time arranging it.  Time during which the customer who
falls in this category could easily have made more money at their job than
they saved by arranging their own financing.  There are of course all kinds
of exceptions.  Thos who have a standing line of credit our a pre-existing
home equity line of credit, and those who can simpley pay cash.

Anyway, whether we like it or not it is a valid marketing model.  I
personally do not like it, and I readily recognize the FACT that it is often
abused, but its a valid plan and there are good arguements for it to exist.



> --
>
> Regards,
> Robert L Bass
>
> =============================>
> Bass Home Electronics
> 941-866-1100
> 4883 Fallcrest Circle
> Sarasota · Florida · 34233
> http://www.bassburglaralarms.com
> =============================>
>
>



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