With system penetration leveling off, many alarm installers are boosting their recurring monthly rev
If you knock on the door of a home that has a competitor’s sign on the lawn, is that stealing an account or simply free enterprise?
The answer depends on whom you ask and whether they are looking at things from an ethical or legal perspective. Regardless, just mentioning the term “stealing accounts” can raise a few eyebrows, as well as tempers, in the security industry.
For those with a moral conscience and the ability to resist rationalization, perhaps the best barometer of ethical sales practices is how it feels in the pit of one’s stomach. This is the common sense approach: do unto others as you would have others do unto you. For the more ruthless competitors, there are a number of laws on the books to help hold them accountable.Stealing of Accounts Is Open to Interpretation
What makes it ethically wrong to go after another business’ customers? According to Don Heebner, president of Franklin Security Corp. in Lafayette Hill, Pa., the litmus test within the industry is whether the prospect came to you or you went to the prospect.
On the other hand, what if the prospect is happy with his or her system? Typically, new competitors that come into the business charge less to get the work, a fact that is probably true in any business. Because these new companies want to begin as quickly as possible to generate some recurring revenue, they will look for competitor’s stickers on windows and then attempt to sell them the monitoring for less money. Industry Associations Offer Ethical Guidelines
While the associations do not have any specific policies on stealing accounts, they do work toward improving relationships among members and enhancing the industry’s image.
Steve Helmig, president of CentraLarm Monitoring Inc. in Manchester, N.H., who is on the board of directors of the New Hampshire Alarm Association and was a past president, says, “In New Hampshire, if someone accidentally approaches someone else’s account or the account calls another dealer, what usually happens is that the second dealer will call the dealer of record and let him or her know he or she has a problem with the customer. Legal View Hinges on Contracts, Ownership
Apart from the moral and ethical standards that many dealers observe, there are two main issues on the legal side. First, is the person under contract? Second, if there is a system and the person just wants to switch companies, does he or she have ownership and full title to that equipment or does it belong to the other alarm company?
Normally, a salesperson who goes to another company has the right to engage in his or her normal trade or profession. The salesperson can do it freely if he or she never signed a nonsolicitation agreement with the former company, and if the company didn’t treat this account information as confidential, proprietary trade secrets. However, under some state laws, there is a concept called unfair competition. This concept varies from state to state and basically specifies that no company shall engage in any action that would constitute what the court considers unfair competition. Use of Trade Secrets to Lure Clients Is a No-No
So, what practices can a salesperson use to keep from stepping over what is often a fine line between right and wrong?
The person can notify all the customers he or she knows without taking any lists and let them know that he or she is now working for another company. If those customers want to give that person a call, they are certainly free to do so. At the same time, the person has to make sure he or she doesn’t interfere with an existing contract. Attorney’s Advice: Suing Sends Strong MessageThe time, effort and cost involved with filing a lawsuit are some of the many factors that have to be weighed before proceeding to sue a competitor over alleged business improprieties. Hopefully, in most cases, it won’t have to come to that. Good Service Minimizes Stolen (Lost) AccountsIn the alarm industry, there’s an unwritten law that there’s enough business for everybody. No one needs to steal an account. On either an ethical or legal level, it’s not stealing an account if an end user calls another provider because they are not satisfied with the service they receive from their alarm company.
Whether you call it stealing accounts or free enterprise, when a company is not servicing its accounts properly, it deserves to lose business. The accounts aren’t stolen—they are lost.
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