Home Security Alarm Companies are Selling You Out


RMR means quick cash for alarm dealers

RMR means quick cash for alarm dealersMany Home Security Alarm Company sell their Accounts.
Dealer Programs help Undercapitalized Alarm Companies Survive.

Similar to Home Mortages, you Alarm Company may be Selling You Out.

There are a number of big mainland alarm companies taking notice of our local Hawaii Home Security Alarm Systems market, and a making a play for their share of business, but are they good for our economy?  Are they good for our families?It is true that the “Big Guys” are marketing to our local homeowners.  An evening of cable TV will show many commercials from ADT, Brinks, Vivint, and others, who want to get a piece of the pie.  The competition has been great for local families.  10-15 years ago, as an alarm company, we would sell a small alarm system for $1500-$2000 and be ensured an up-front profit on the installation.  With the new found competition, we are often faced with the necessity of selling a system for LESS than the cost of installation (parts, labor, commissions, etc).  What this means is that we have to make a profit elsewhere; typically in higher monthly costs, upsells & addons, and other miscellaneous charges.  In that same 10-15 year timeframe, the monthly rate for monitoring has risen from $25.00 per month to well over $50.00 per month.  Why such a spike in monthly rates?

It’s because the alarm companies HAVE TO MAKE A PROFIT TO SURVIVE.  Nothing is free, not even FREE ALARM SYSTEMS.  Rest assured that a law of business demands that any business must be profitable to survive.  Instead of charging a higher installation with low monthly, homeowners are being presented with a low (or free) installation with high monthly fees.

The two results of this new competition are 1) Dealer Programs, and 2) Summer Sales.

Dealer Programs.  A small, independant company signs an “Authorized Dealer” program with one of the Big Boys, puts on the Big Boy’s shirts, drives a vehicle plastered with the Big Boy’s logo, and signs you up for an installation.  Here’s the catch: The independant company can’t afford to give you the alarm for free; they often start undercapitalized (they don’t have enough money in the bank unless they convert your account into quick cash).  As soon as the independant company finishes the installation, they sell your monitored account to the Big Boy.  You now belong to the Big Boy on the mainland, that quite often DO NOT have a local contact person to fix your alarm or answer questions.  The Big Boy pays the independant a multiple of your monthly fee, RMR or recurring monthly revenue, and no longer has any moral or legal responsibility to make sure you get the service he promised you.

Summer Sales.  Similar to a Dealer Program, but this one takes a disturbing twist.  The independant (or sometimes a temporary employee of the Big Boys) hires college kids to come over to sell during summer break (ergo “Summer Sales”).  They door knock HARD for 2-3 months, install systems, sell contracts for quick money, and then leave before the State can catch them for unlicensed, uninsured, and illegal business practices.

What to look for.  Make sure that the company that is knocking on your door has a State of Hawaii contractor’s license (not just a General Excise Tax license), and have a positive report on file with the Better Business Bureau.  Make sure that they have a permanent office in-State that will provide ongoing support.  If in doubt, have them add a few provisions into your contract; that they can not sell your account without your prior written concent; that you can cancel if they close their local office, and while you are at it, make them guarantee that they will not raise your monitoring rate.

Better yet, support Hawaii’s economy.  Buy local.

Aloha Alarm is a local Hawaii alarm company.  We are licensed (C-31844) and insured.  We DO NOT sell our customers to the mainland Big Boys, NEVER!

If you are looking for a home security alarm system, alarm monitoring, or if you just have some questions, feel free to call us any time at 808-488-4111“Security with Aloha”.

Mark Plischke
Aloha Alarm LLC
Honolulu, Oahu, Hawaii

 

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