One of the biggest problems facing alarm companies today is their attrition rates. So, how should you fight attrition? Various companies have employed several strategies that have helped in maintaining or lowering their attrition rate. However, before applying any of the below strategies, it is essential for a company to determine its attrition rate. Without quantifying your attrition rate, it will be difficult to see the impact of any strategies used to battle attrition.
One way to effectively prevent or minimize attrition is to use the newest technologies available. While affordability of a system always plays a role, clients are mostly persuaded by the new, most efficient system out there. By ensuring that your company is presenting the newest technology to their customers, it prevents the possibility of losing customers based on product alone. Even more important, companies such as AT&T are now beginning to penetrate the security industry and will likely look to steal customers away by offering superior technology or service. Thus, making sure that your company is using the newest technology available is an effective measure to fight concerns of other security companies or companies looking to enter the industry.
Customers do not usually base their decision on whether to engage a security company or continue using its services on one factor. That is why it is extremely important to provide a high level of service by having proper resources and capable employees. The main point here is that management should make sure they provide the company with everything it needs to promptly and efficiently service their accounts. Making sure your company has the resources it needs to offer effective service, such as hiring intelligent and experienced employees, is essential to keeping your attrition rate as low as possible.
Marketing strategy also plays a big role in a company’s attrition rates. By focusing your marketing efforts on high quality and credit-worthy customers, a company will be in much better position to predict as well as minimize its attrition rate. High quality customers tend to remain using the services of a company they already use so long as that company does not give the customer a reason to look for a different security company by offering terrible service. Additionally, with credit-worthy customers you do not have to worry nearly as much about defaults on payments, which of course only raises a company’s attrition rate. While most security companies do not have the luxury to pick and chose who they market to, it is important to try marketing to high-quality customers to battle the fight against a rising attrition rate.
While this strategy could be costly and impractical for some security companies, especially small ones, it has been a successful tactic when used by companies in the industry. Just like the marketing strategy above, implementing this strategy requires a company to dedicate money and time. One company who successfully used this method created a team, and gave the team broad authority to correct problems through credits and disbursements. By providing customers immediate responses to any type of attempted cancellation, the company was able to maintain a low attrition rate. The point behind this strategy is to exploit the extremely short period of time between when a client cancels then vacates and a new resident moving in.
Another key factor in maintaining or lowering your attrition rate is by ensuring that your customers are satisfied with your service. This can be done by periodically sending out customer surveys or contacting customers to ask if they are satisfied with your services and any improvements they would recommend. If a customer responds that he is not happy with your company, it allows you to identify the reasons behind customers terminating your services. Moreover, by asking for recommendations, the customer typically feels a stronger attachment to your company and is more confident in the services your company is providing them. Clearly not all customers will respond to such surveys, but most likely enough customers will respond making this strategy worth the cost in order to fight attrition.
Not only is using the right contract an essential ingredient to protecting your company legally, it also is a major ingredient to maintaining low attrition. Well-written contracts prevent customers from switching to a new company since they are well aware of the binding relationship they have entered into with your company as well as the negative consequences of ending that relationship early. By using a poorly written contract, customers will feel more comfortable switching companies due to the absence of legal repercussions. Moreover, a well-written contract also sets out the payment details and allows you to refer to its terms in customer disputes. Without the terms being set out prior to the customer using your services, it could be hard to savage even the smallest of issues that arise in such relationships.
Jesse Kirschenbaum is a law clerk at Kirschenbaum & Kirschenbaum.