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Follow up on explaining the contract to your subscribers from January 10, 2014
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Ken
Regarding explaining your contract to a potential client.
The industry will take time to explain in detail how a system will work but, seems afraid to discuss the contract for fear of losing the sale. Today's consumer is more educated and may have been burned by a bad contract at some point in their life. The bitter taste of a previous contract remains forever. I found this to be one of the reasons when selling a system takeover, why customers will change providers. They have a natural suspicion of any alarm contract that must be addressed at some point, if you want the sale.
The salesperson should be prepared to discuss their companies contract if asked. While I agree, a well written plain language contract, should limit any questions, they do come up at the time of a sale. I have sold many systems over competitors because I took the time to explain the contract. The competitor would or could not.
A contract is a written mutual understanding of what is expected from each party. Terms of payment, contract length and limit of liability have been a few areas the client may question. The professional salesperson establishes a relationship with the client that's built on trust. Avoiding or misdirecting a question of any type leads to suspicion and a lost sale.
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Ken,
Great question and I love your response! This is a topic that all of the dealers can benefit from and I’d like to discuss participating as a panelist. As always, your expertise is invaluable.
Alice Cornett Giacalone, Senior Vice President
Central Insurance Agency
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Response
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The problem with John's approach to the contracts is that alarm salesmen or not lawyers, and even if they were, they are not the subscriber's lawyer. Any explanation is likely to depart from the written terms in the contract, so if the salesman is not limiting himself to reading the provision the salesman is offering his interpretation of what it means, which may or may not be understood by the subscriber. Furthermore, once a salesman offers an opinion on contract terms it opens up the issue of what was actually said and represented. The salesman's recollection of what was said may be different than what a subscriber later claims was said. For example, "the salesman explained that the contract could be terminated on 30 days notice at any time" when a reading of that notice of termination clearly applies to renewal terms. Of course, claims by the subscriber that the salesman made representations clearly contradictory to the contract terms clouds any case because of claims of "fraud in the inducement". It would be best to meet those usually fabricated claims with a company policy that no explanation is permitted and the salesman follow company policy.
Finally, if the contract is written in clear language, like it should be, and how the Standard Form Contracts are written, no explanation of what it means should be necessary. Instead, the salesman should be patient and suggest the subscriber get whatever assistance may be needed to understand the contract. All a salesman should offer to do is read the contract to someone who is unable to read it and requests that it be read to them.
Here is my original comment on the issue which was circulated on January 10, 2014
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Not only should your sales people not offer to explain contract terms to prospective subscribers, they should be prohibited by strict company policy from doing so. The Standard From Contracts are written in clear easily understood terms. Any person of normal intelligence should understand the terms if they take the time to read them. So what I think your sales people are really asking is, what should they be saying when a subscriber says "what does this mean" when the subscriber really means, "I don't like this provision".
The sales approach needs to be consistent and firm when it comes to the contract. Requests for explanation on meaning or legal analysis must have the response "sorry I'm not a lawyer; the contract was prepared by our lawyer and it's an industry standard form. You should take the time to read the contract and seek advice of counsel if you like".
Responding to the "I don't understand this" or "what does this mean or what can this mean" and "do you expect me or anyone to sign this one sided onerous contract" requires some finesse, some salesmanship. That's your job to train your sales staff. That might be hard to do if you don't believe in the contracts and get your sales people to believe in them. It's really quite simple. Alarm systems are not infallible. They are subject to technology limitations, equipment failure, communication pathways not controlled by the alarm company and human error. The amount being charged for the system and services is generally not related to the value of the property to be protected or the potential loss should the subscriber suffer a loss caused by an event the alarm was intended to detect. Finally, the alarm services are designed to reduce risk of loss, not prevent loss, all without guarantee. This concept of the sale and services is a recurring theme in the contract provisions. In fact I like to think that the Standard Form Contracts actually convey the right message when the subscriber raises issues regarding the alarm company's exculpation from or limitation of liability. The subscriber needs to understand that concept, as does the alarm salesman. You're not selling property or casualty insurance, and you're certainly not charging for it.
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