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    If your company policy is to contact a subscriber who calls to cancel service and ask why, that's not enough.  You need to do more, and you need to do it before that call comes in.

    Attrition is a problem for any industry, but in an RMR based business it means much more.  Most if not all of your profit is tied up in the long term relationship and recurring monthly revenue.  Additionally, the value of your business is directly correlated to your RMR under contract, so it's a double loss when you lose the account.

    Some attrition is normal and unavoidable.  It's usually identifiable also.  You know when your subscriber moves, dies or might be experiencing financial hardship.  You also know when competition is in your area and fairly, or unfairly, you lose the account to a competitor.  Establishing a department or designating certain personnel to contact the departing subscribers can accomplish only two objectives:  try to retain the subscriber or conduct an exit interview to find out why the subscriber wants to or has canceled.  These are not necessarily mutually exclusive efforts, but most likely a day late and dollar short.  

    Attrition is something you need to address and plan for, and against, before it happens, not while it's happening and certainly not after it's happened.  After it's happened leaves you with only a collection option.  During it's happening leaves you offering to do what you should have been doing all along [something not lost on the subscriber] or offering financial incentives, which you'll resent and probably cause you to continue the same poor service that caused the subscriber to leave in the first place.

    Of course you might find out that your accounts are under attack from a competitor, but you would likely learn that sooner rather than later, and you should gear up to combat the assault on your subscriber base rather than sit back and lose the accounts.

    There are a few consultants that specialize in combating attrition.  You can find them in The Alarm Exchange [ https://www.kirschenbaumesq.com/article/the-alarm-exchange ]. One is Bob Harris of Attrition Busters www.attritionbusters.com [under the Educational and Training Programs category] and another is Bob Maunsell of Security Marketing Guru www.SecurityMarketingGuru.com [under the Marketing for the Alarm - Security Industry category].

    More than normal attrition is probably related to poor performance.  Your investigation starts in house; get it in order.  It took you a long time to build up your subscriber base but you'd be surprised how fast your employees can lose them for you.  If a competitor has targeted your accounts you have to take swift and decisive action.  That might mean bringing a lawyer in or complaining to your licensing or consumer agencies about deceptive business practices if that is part of the problem.  Once you recognize the problem you need to take action.

What constitutes normal attrition is arguable.  I'd like to put the loss rate at under 6%.  You should expect at least 3%, so the margin is tight.  I've seen some discussion that normal for this industry is closer to 10% and up to 13%.  I think that's high unless your subscriber base consists of PERS accounts.  But one careful barometer is your historic rate.      You've survived this long with that rate but should not be too passive about increased attrition that you can't otherwise explain based on factors beyond your control.  If you see a spike in your attrition rate then you need to focus and take action.

    Communication with your subscribers is a vital tool to foster strong and loyal relationships.  The communication should be two way.  There needs to be feedback from your subscribers and you need to pay heed that the comments.  Your attitude needs to be that your subscriber is always right [unless they aren't] and you need to figure out how to appease and satisfy their requests, when possible.  Even the pains in the butt might have a legitimate gripe that you should address before the malcontent spreads.  Remember also that the buck stops with you, so make sure you understand the issues and what your company intends to do about them.

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Webinars 

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December 4, 2013   12 noon EST  Register here: https://attendee.gotowebinar.com/register/4919260455763006721

     Title:  10 Things Residential Security Alarm Companies should consider BEFORE entering the world of Commercial Engineered System Fire Alarms

      Presented by:  Bob Williams, President of Briscoe Protective Systems and his Management Team. 

Briscoe Protective Systems has been in the industry for 35 Years and has made the transition from a Residential Alarm Company in the late 70’s to a Engineered System Fire and Security Company that is an SDM Top 100 Company. Find us on the web at www.BriscoeProtective.com or on LinkedIn under Companies, Facebook and Twitter@BriscoeProSys 

      Description:  There is a big difference between installing Residential Fire Systems and Commercial Engineered Fire Systems and there are “Key Factors” that Security Company’s should consider before attempting to go into this lucrative but challenging market.

      Who should attend:  Alarm company owners and fire techs.