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Diverse Offerings Demand Diverse Contracts

Are your contracts keeping pace with your service offerings?

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The growth of your company is most likely an idea that rarely leaves your thought process. Planning your strategy for growth, whether you rely on intuition or professional consultants, has to start somewhere, and I think it starts with your product. What you have to sell and market. The alarm industry is changing at a pace that rivals any other industry, which is no surprise because the industry is electronic rooted. New products are coming out and your existing customer base is a great place to start promoting these new products and services.

When alarm technicians became systems integrators the available product line increased dramatically. The routine intrusion system can now be supplemented with not only fire detection devices, but cameras for both alarm verification and video surveillance, audio, lighting, electric appliance controls, all remotely accessed by the subscriber.

It should not come as any surprise that the goal of your marketing and sales program is to increase your recurring revenue. RMR is what builds your company; its operational expenses and its equity. With all of the products and services you can and should be offering your subscribers, your opportunity to increase RMR has never been better. Sure economics are tough right now, but crime and fire and other conditions that you sell systems to detect are ever present. Whether you’re selling a luxury or necessity depends on your salesmanship. You’ve got to not only understand your products and services; you need to believe in them.

Better protection usually equates with more equipment and services. Subscribers are more sophisticated today than ever, and they usually want all the bells and whistles you can provide. It’s not enough that they have intrusion protection. They need fire as well, they want to remotely arm and disarm the alarm, they want to be able to view cameras disbursed around their home or business — perhaps listen in — and be able to open the garage door, turn on or off the lights, and maybe start the oven while on their way home.

Diverse systems and services, of course, require contracts that address these services. All too often alarm companies give little thought to their contracts, considering them a necessary expense or something their insurance carrier requires. Most alarm dealers understand the contracts provide protection from claims by subscribers who suffer losses, and also understand the contracts provide for RMR that is part of the formula for valuing alarm companies. But the contracts also define the equipment that is to be installed, the services that are to be provided and obligations of the parties to the contract.

Establishing the alarm company’s duty owed to the subscriber is an essential purpose of the contract. You should be careful to match your contract terms with the systems and services. Although this is often done in the specification terms sheet, the correct contracts need to be used. For example, when installing a commercial fire alarm system you want to be using the proper contract for that system and service.

With changing times and technology you now have the opportunity to offer systems and services that not long ago were unavailable. Video is probably the hottest product at the moment. Suggesting to subscribers with intrusion systems that they need video verification systems, or self-monitored video, is a way to increase protection and your RMR. Upgrading smoke and CO detectors is another RMR growth potential.

Your focus should be on RMR growth, which not coincidently will also provide subscribers with greater protection and services. You need to believe in your services and you need to understand your contracts, and believe in both. It’s your job to sell the services and the contracts to your subscribers.

Ken Kirschenbaum has been a recognized counsel to the alarm industry for 35 years and is principal of Kirschenbaum & Kirschenbaum, P.C. ( His team of attorneys, which includes daughter Jennifer, specialize in transactional, defense litigation, regulatory compliance and collection matters.

The opinions expressed in this column are not necessarily those of SSI, and not intended as legal advice.

Article Topics
Business Management · Legal Briefing · Service and Maintenance Contracts · All Topics

About the Author
Ken Kirschenbaum
Security Sales & Integration’s “Legal Briefing” columnist Ken Kirschenbaum has been a recognized counsel to the alarm industry for 35 years and is principal of Kirschenbaum & Kirschenbaum, P.C. His team of attorneys, which includes daughter Jennifer, specialize in transactional, defense litigation, regulatory compliance and collection matters.
Contact Ken Kirschenbaum: [email protected]
View More by Ken Kirschenbaum

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Legal Briefing, Service and Maintenance Contracts

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