Don't tell me what to do, I am supposed to sell! -- APX in Rhode Island

I found this article after a loyal and avid reader directed me to. I wish I could have found it sooner! It's entertaining! It does a great job at boiling down the issues for APX Alarm. It's not what they do, it's how they do it. Their home security system is a comparable system to any other company out there when installed correctly, I will give them that. It does what it is supposed to do. But I think Dane McCartney coined a new catch phrase for APX Alarm, "Don't tell me what to do, I am supposed to sell!"

APX gets highlighted by a Rhode Island news company, there is a lengthy interview, a salesman ambush, good points are made, I would rank this pretty high quality.

It boils APX down to the fact that they only get permits if it is brought to their attention that they have to have it.

Look, not to beat a dead horse, but APX Alarm and other door-to-door alarm companies for that matter, sell the service of police, medical and fire response, but don't even go through the steps to get the proper licensing to do the work. Do you see the disconnect there? It costs police money wehn they respond to a false alarm. Where does that money come from? Taxes from people and businesses in the area. If the company that is selling the police response pays nothing in taxes because they only have temporary offices in the area or neglects to get the permit fee and the proper paperwork done, what does that say about the company? A lot.

Check the news report out for yourself.

I must say that is classic video. It is a must watch. Dane McCartney gets sideswiped and in turn decides to go hyper-aggressive and use the either-for-me-or-against-me attitude and lay out some of the best quotes I have heard in a while:

Here are a few:

• "But if we weren't on the news and you had this microphone in my face, it would be a whole different story, buddy." Tim White then says, "what does that mean?" Dane then says, "Just read between the lines, ok?" And keeps on repeating, "just read between the lines pal." It would be a different story, he got that right. Assault and Battery would be the story.
  
• Dane says, "I don't want the mic in my face." Tim White states simply, "that's usually how we get the sound."
• Dane says, "I don't tell people that the phone lines are being cut, in their neighborhood. I don't tell people that there are break ins, in their neighborhood. It's general." It's unfortunate that asterisks can't happen in speech.
  
• And my favorite of all, "don't tell me what I'm supposed to do, I am supposed to sell!"
• "I'm not going to walk around in the ghetto for no reason." This in regards to if he gets paid on commission (please note surrounding) McCartney is at a house he knocks on, and he is on the news, in the town he works in. Not the most brilliant comment.
  

Looks like all of that got Nathan Wilcox's attention. He flew out and had a little talk and told Dane to hypothetically hit the showers. Basically, sent him to another office probably. I would bet my bottom dollar that they didn't fire him, even though they said they did. He was office manager, of a fairly successful office. Though, if APX did fire him a few days before the end of the summer, that would be tragic. No back end, no office override, that would truly be a harsh break off. Interesting to see what would happen.

Check out the videos here. They are very interesting.



Extended interview with Nathan Wilcox

Pinnacle Security and SAI Getting Sued Together

There is a report out today from California and it isn't the best of news for Pinnacle Security and Security Associates International (SAI).

Apparently when the homeowner used the Pinnacle home security system through the two-way voice feature, SAI verified the alarm, and sent it to the "non-emergency" number when in fact it was a verified alarm. It added about 10 minutes to the response time on the alarm.

The lawsuit is from the firefighters widow and son who died in the fire. Pinnacle Security and SAI are named both named in the lawsuit.

To be honest, SAI has made quite a mess with the alarm systems in the door-to-door industry. With their customer service issues, and now with the actual job they are supposed to be doing. APX Alarm has made a smart move and went with Criticom who seems to have far less issues than SAI. They are a mess! Hopefully Pinnacle, Icon Security and whoever else is with SAI follows suit. I personally haven't heard too much positive coming from them. The only interaction I have had with them kind of proved this point. When I started my dealership, I contacted them but no one even returned an email or phone call from their side.

I feel terrible for that family for the loss. Hopefully everything works out!

Home Security Contracts: What's the Issue? Cancellations.

Free alarm equals contract. It is as simple as 1+1=2. Alarm companies want to separate "free alarm" and monitoring, but when it comes down to the real deal, the customer is required to pay the monthly monitoring for 3 or 5 years, or else the alarm is not free. They ARE dependent on each other.

Contracts are fine, I understand why they are there, I have no problems with them and it's not necessarily a bad thing to have.

However, I do have an issue with the way the contracts in the alarm industry are setup. They are heavily in favor of the alarm company and are the farthest thing from "customer friendly" and "satisfaction guaranteed" that is possible. Here is why I think that:

• No such thing as an "Early Termination Fee." Alarms are often compared with cell phones, due to the "free phone" being compared to a "free alarm." They are basically identical with two glaring exceptions.
  
• If you want out of a cell phone agreement, it is around $200. An alarm is 75% of the remaining if you are lucky, or ALL of the remaining payments. Things happen, and sometimes people need to get out. Life changes sometimes, you shouldn't over-penalize people for that. For example, if someone decides one month into the contract that they don't want the alarm, or see that it's not all what they thought they have to pay $1200-$2000+ or find someone else to take over the contract. With a cell phone it is $200. Quite the difference!
  
• People who get cell phones actually go out and get cell phones. You following me? They aren't approached at their residence, or out and about, and told they would be great advertisements for other potential cell phone users. That if they just advertise their brand, they will get a free phone. They go out and make a conscious decision to purchase a phone. You would think that if it is a conscious decision they should be the ones stuck with the remainder of the contract, not the ones approached at their home and given only 3 days to know if they want it for the next 1825 days or not.
  
• No matter what happens, with no exception, the customer must pay their monitoring, even if no service is provided. Yes, that is the basic idea of a contract. But what if no service is provided? What if the alarm company fails to live up to its end of the bargain? No luck. If a customer finds out they haven't been monitored in months when the alarm goes off and nothing happens, there is no recourse. Just as a customer can't expect free monitoring while not paying, a company shouldn't expect payment when no service is provided. It should be both sides. Usually it is, but not always.
• A common argument is that people should read the contracts before having the home security system put in. I agree. But, in all reality, how many people sit down and comb through the paperwork? Not many. Especially not the ones who purchase the alarm systems from door-to-door salespeople. There is no problem with that, but the "contract combers" are the ones that say no before the door is even opened. In this day and age, people who listen to door-to-door salespeople are usually really nice people who trust what people say. They usually think the best in people, and don't think that if they sign up there is no way out, especially if they hear the salesman say that it is possible to get out without him going into specifics. You see, it can get complicated.
  
• Even when the contract is up, it is a moving target to get out. You have to send in a written letter 30-60 days in advance. If it is not received, they conveniently renew the contract. Bad news if you go to cancel on the day it should be up. It can get complicated.
  

Basically, what it comes down to, is home security systems are really easy to get into, but really hard to get out of. This is not something that is unique to door-to-door alarm companies, it's the same with the majority of national home security companies too.

The key is to know what the contract is, how it works, and if it fits before getting the security system installed. That could be a sale killer for door-to-door companies, that's usually why it is only acknowledged, glossed over, then transitioned out of and onto the sweet new system they are getting! Good for sales, can be a problem when the customer may need to get out of the contract.

Pinnacle Security Forum for Selling Home Security Systems

I came across an forum from Pinnacle Security's Top Office. I had never seen this in my life before the other day. But it is very interesting and it gives some intriguing insight into what Pinnacle security does and how they sell their home security systems.

Here are some my highlights from this site:

• This is how BJ Savage gets into houses. "How many doors do you have? What type of doors are they? Are they wood or metal? What kind of wood? Now your back door is it a slider? Us it single pane glass or double? (I will usually keep asking questions till the customer is kinda stumped, say something like "I'm not sure what type of glass it is") then I will say well let's take a quick look at that, looking past the customer at the back door, or at my watch and step in, if you have done a good job at asking questions you will be able to walk in without a problem.)"
• This is Clint Cushing on how he makes the deal a "Limited Time Only" deal, "First 3 homes that help with advertising we will compensate with a new wireless system customized to their home at no cost." That makes a great story, but it is in a large gray area. Yes, they give it to the first 3 homes, but they would also give it to houses #4, 5, 6, 7 etc. They would give it to everyone.
  
• Trey Warner immediately starts of by saying, "Don't worry I’m not selling anything." He then goes into this gem, "I will also throw in my approach that there has been a high volume of phone calls for security systems in this area and it's my job to direct those phone calls to our company by using these signs and creating some word of mouth by you having a great experience with us." And this, "don't do too much eye contact, it makes things awkward." And this, "-never be afraid to try and get in the house cause the worst thing that could happen is they say no, so who cares? You will never see that s.o.b. again anyway." Wow.
• This is from somebody, not sure of their name: "Your job is really to overcome the thought of them thinking you are a salesman." Read the rest on how to overcome objections when selling home security systems door-to-door.
  

Go, check out the site, it's pretty interesting. It teaches quite a bit on the way they view the security systems that they sell. It's not a bad way to do it, it's not my preference, I think it is a little shady, it can be argued both ways, but that is what works for them.

Door-to-Door Home Security Sales Tactics

I found a very good sales tips today. It relates well with selling home security systems door-to-door. The tip comes from Seth Godin, a very influential marketer. Today he wrote about bullying people into sales. He says it best:

"Sales bullies describe their approach as ethical, because, after all, it's in the best interest of the prospect to say yes. It's okay to be a sales bully when you're trying to get someone to take their TB medicine, so it must be okay to be a sales bully to get them to sign this contract.

And it works. On some people.

The flaw in thinking is this... the people you most want to sell to won't respond well to this. The people you most need to spread the word, the people who are the best partners, the most loyal customers--they blanch in the face of bullying. They walk out.

So, if bullying is the only tool you've got, it makes sense to focus on an audience that responds to it (and lower your expecations accordingly). Even better, get some new tools."

Pretty much how it is. I got an email this past week that kind of proves that point, in it the guy, who works for APX Alarm, said regarding the crime in East St. Louis, "And thats where we sale our security most of the time is in those areas not rich huge houses." It is what it is. As long as expectations are realized, everything will be good.

APX Alarm Keeps it in the News

I have been a little slow updating the news, but that doesn't mean APX has stopped making news. There isn't too much that is serious, compared to the recent stories, but it is in the news. Check it out for your self:

• Tonawanda, NY -- Bracing for the second surge, the city police sat down each APX sales rep before giving a permit to peddle home security systems in the city. Told them again to not say they are with the police, to not tell them not to falsify crime reports, and to obey knocking hours. This is probably the same office that started with 45+ guys, but only got 18 solicitors permits. APX alarm goes through a lot of territory in order to install the amount of home security systems they do. This is presumed to be the same group that went through Syracuse, Rochester, and now Buffalo and Tonawanda.
  
• National Home Security News outlets have mentioned the situations with APX Alarm Security Solutions. Basically noting that they have had a storm of media and misconduct allegations. The only friends APX Alarm has made inside the security industry are basically the ones that get a cut of their money. Honeywell, their 3rd party central monitoring station, the lights they put on their alarm system signs, the sign makers, etc. Their competition though, not so happy. Fair competition is fine, as long as everybody plays by the rules.
• If it sounds like APX Alarm, looks like APX Alarm, and smells like APX Alarm, it probably is APX Alarm. Evans, CO alleges an unnamed company is claiming to associated with the local police, is not registered to work there, says they are Honeywell Security Products, and are being aggressive while selling home security systems. Maybe it isn't APX, but it sounds a lot like them. No other door-to-door company security company that I am familiar with brings people from Canada and is with Honeywell. Pinnacle does but they are GE. So, if I were a betting man, I would put it on them being with APX.
  
• This one is not really news, but it is an interesting read on a door approach by a home security salesman for APX Alarm in California.
  

Hopefully that is it. It seems that the summer security system selling season is winding down and we'll see if the news follows suit!

APX Alarm Technician Left Behind Binder w/ Security Codes -- El Paso

There is a random news story out of El Paso, this time with APX Alarm. El Paso seems to be the epicenter of random news stories with door-to-door home security companies. At the end of June 2008, a sales rep for Icon Home Security had a temper tantrum with the news station. This time, an APX Alarm technician left behind a binder with loads of personal information inside. Things such as address, names, numbers and alarm codes. I am sure you can imagine what would happen if that fell into the wrong hands.

Well, the news station got wind of the news and decided to air the story. APX, as usual, had a different story to tell. They always have a different story to tell.

This just confirms what I had already spoken about with the security of the home security companies. There is a lot of personal information shared with security companies. Social Security numbers, credit card numbers, alarm security codes, etc. Those things need to be taken seriously. I am sure they are, but not 100% of the time. There could be improvement.

The information that salespeople and technicians have in their binders usually has all of those important identification information. They are left in cars, apartments and offices during the summer. Hopefully no problems arise out of this. But it is interesting to know things like this.

If I were a customer thinking about which security company to go with, I would want to know how they do things, good or bad.

APX Alarm Suspended From Better Business Bureau

The BBB has said adios to APX Alarm. WSYR out of Syracuse, the same news station that has been following the code compliance issue, is swinging again. Looks like one of APX's key allies has jumped ship and pulled their "satisfactory" rating to "no rating". Two facts have initiated this suspension:

1. 597 complaints as of today in the past year alone. Averaging almost 2 complaints a day over the past year, even though they only actively sell door-to-door 4 months out of the year. Average that out, if you count only selling days, the BBB fields over 5 complaints per day. Not such a small number.
   
2. Or it could be the on again off again Cease and Desist relationship APX has been having with the Louisiana Fire Marshal. From what it looks like, the go-till-you-get-caught mentality is not jiving with government agencies. Apparently they have continued selling with unlicensed salespeople and installing shoddy systems. Of course, APX denies all claims. They always do.
   

However it is, that is not such a good sign for APX Alarm Security Solutions. It is good to see the BBB take a stand, and practice what it preaches. It has been working in a contradiction for a while and it looks like it took a stand, good job! It seems they just needed a reason to take action, now they found it in an issue in Louisiana. I hope APX gets it turned around, for it's sake more than anything. August 13th the BBB will have a hearing to see whether APX will get expelled. I haven't heard that word since the pot smokers in High School. Who gets expelled from something? I'll keep you posted on the subject.

Also, remember the JD Powers Call Center Award APX won recently? JD Powers apparently says they didn't know about the Louisiana investigations and will be watching closely to see what happens. Again, pigs get fed, hogs get slaughtered. If APX Alarm were a publicly traded company, and APX does get expelled, somebody would/should get canned. Only time will tell because APX Alarms isn't giving up.

A Few Things That Don't Exist In Door-to-Door Security Sales

After reading about some of the recent problems APX Alarm, Icon Security, and Pinnacle Security are facing, and it smacked me right in the face. There is something missing from the way these companies are doing business. I never realized it to this extent before this. It is their choice, but in this day and age it is something consumers have come to expect. It is the product guarantee. I'm just going to go over a short list of things that don't come with a home security system purchased from a door-to-door alarm company:

1. Satisfaction Guaranteed -- This right here could single handedly bring down the industry if it was offered. While I know many customers are satisfied, you would have to be bonkers to think there aren't loads of customers that would get out of the contract they assumed on their doorstep if it was an option.
   
2. Money Back Guarantee -- This isn't even true of the 3-day period. With many companies, if you cancel during that time, you don't get your money back. You're out of whatever you put in. If you're not happy with the service, you have to keep paying or have it go to collections. There is no way around that.
3. 30, 60, or 90 Day No Questions Asked Guarantee -- Nope. More like 3 business day cancellation policy. Even then it is hard to get out of with dating and sending in requests before the deadline and such. This rule isn't self imposed either, it is a Government Law. If they didn't have to do the 3-day right to cancel, odds are they probably wouldn't either.
   

This isn't usually the best way to get lifelong customers and fans of your product, but there is no law or rule stating they can't operate like this. It is their choice. The contracts are very binding, but for most it isn't a problem. But for those that it is a problem, it can be a major nightmare!

80/20 Rule
This is something that would eliminate all of these problems. If these companies lived by the 80/20 rule, also known as Pareto's Principle. For them, it translates to this:

• 80% of the customers make 20% of the noise. Not very loud, similar amongst all companies.
  
• 20% of the customers make 80% of the noise. The loudest kind of noise. These are the customers that take most actions, report them to the BBB, Attorney General, etc.
  

If they made a concerted effort to consistently take the 80% they would grow much more sustainable and much more smoothly. Instead, the salesmen get a little greedy and want to take on the extra 20% that make all the noise and cause the majority of the problems. How can you blame them? They get paid for those. The company is left to clean up, and maybe the salesman gets a charge back, but maybe not, to them it's worth the risk. Going for the extra money, and getting greedy doesn't pay off. Pigs get fed, hogs get slaughtered.

Good and Bad News for APX Alarm Security Solitions

So, you want the good or the bad news first? I will give you the good. I think it is more important than the bad, or less than good. I usually wouldn't put both in the same post, because, what APX has done is pretty incredible for the door-to-door security industry. But, it's what a newspaper in APX's own backyard has said about them the very same weekend this announcement comes out that includes a mention in the same breath.


Good News
APX Alarm's Call Center has been recognized and inducted into the JD Power and Associates Certified Call Center Progrram. Sweet! That is a really great award for APX and the industry! Having a first rate call center is something to be proud of. They say it is based on,

"courtesy; knowledge; concern for the customer; usefulness of the information provided; convenience of operating hours; ease of reaching a representative; and timely resolution."

If you want to read more about the award press release, go here.

Less than Good News
Now, this is coming from the Deseret News. This is the newspaper that is in APX's backyard, by people who live around them year round. This isn't from a media outlet looking for a steamy story for the 9 o'clock news saying, "SCAM in local neighborhoods!", this is about the company itself. Their headline, "States Target Sales Tactics of Utah Alarm Company" pretty much sums it up. This just happens to come out the same weekend as the JD Power and Associates Certification for their Call Center. Is that a coincidence? I don't think so. This article has been reposted all over as well. Up into Idaho, in the Salt Lake Tribune, everywhere.

My favorite part about the article is when Alex Dunn said that the 80 year-old woman was trying to smear APX's name and that all she had to say was "no". I wish Alex Dunn would have told himself "no" before he said that. Guaranteed she said NO multiple times to the salesman trying to sell her the security system, but she relented and wanted to get rid of him. It's a crazy story, but interesting all at the same time.

In other news out of Maryland, APX apologizes for being overly aggresive. The BBB also contradicts itself again by saying, "Talk to your neighbors, give yourself time, do not fall prey, close the door!" But of course the BBB still rates them as "satisfactory". Check the whole story out here.

Maryland vs APX -- Alarm System Contracts Voidable?

There is some interesting news out of Maryland today. Good news and bad news for APX Alarm. They may win the complaint battle with the AG. The elderly lady who said she wasn't allowed to cancel got all mixed up with dates and now says she isn't sure of the dates when her home security system was installed. APX had it right with the dates, but what's up with selling an elderly couple who can't even get the days straight? Any how, APX came out ahead of that one. Not sure what the other complaint is about, this however was the more salacious complaint of them all. I bet Neil Glessner who organized the complaints for these ladies is even more angry now. Now that would be a funny interview, someone really should talk to that guy and see what he is thinking!

That being said, it probably wasn't best to open up a can of worms. When the AG started digging, he saw other issues. Now, the contracts of some alarm systems might be voidable. The whole licensing issue that can, at times, be confusing, is coming back to bite APX in the rear end. Because of a mix-up with what crews were working where, the contracts sold by unlicensed sales people "may" be voided. The thing that makes me scratch my head the most is the fact that even after finding out they had a problem, and pulling the group of unlicensed sales people, they got replaced with more unlicensed sales people! The licensing is there for a reason and it isn't just a major speed bump for this cash grab. Licensing is meant to prevent fraud and ensure that business' and salespeople meet proper standards. I have no doubt APX could get those licenses, except for John Underwood with his new felony, they just don't get them sometimes. I am fine with companies selling a lot of security systems, if that is how they want to operate, but everyone needs to play by the prescribed rules. It's not an excuse to say the law was confusing, or they didn't know, that doesn't cut it. APX in particular is the 11th largest residential home security company in the nation, you can't claim ignorance about licensing when you want to claim that ranking. No other company in that neighborhood is having licensing issues, why are they having so many issues? You can't have growing pains forever, and the argument that they are making waves in the industry so they have a target on their backs can't really flow here. They do have a target, but it is because they aren't playing by the rules. This isn't an isolated incident either. Here are a few places they have had issues this year alone:

• Texas
• Syracuse, NY
  
• Louisiana
• Tennessee
• Alabama
• And now Maryland

5 out of those 6 are major state issues. One is a city problem, but a pretty big city problem. There are probably more out there that don't make the news, similar to the one in Alabama. I see this as a pattern. 1 is a mistake, 2 is not good, 3 is a pattern emerging.

I understand it is a fine line to walk while being the maverick of the industry. Trying to change the way sales are made, employing an under served market, bring security systems to everyone, etc etc. It is fine to be a maverick in those ways, change the ways they have always been done and be a bad boy and what not. But you can't disregard the law in the process. It's there for a reason.

If there will be one thing that trips these companies up more than anything it will be either increasing the licensing needed, or actively enforcing the licensing laws currently on the books. It just bogs down the fast pace that summer sales companies want to work at. It caters to the local companies who have the time and understanding to get the licensing taken care of. Being based in Utah, having to get licensing for salesmen who you don't even know who they are until April most times, that could get tricky. Most salesman don't decide too many months in advance. Most offices don't know where they will be headed until 3-5 months before they leave, and at that time very few have their offices filled at that time. I'm not sure you can license someone without knowing who they are first. Licensing, as you can see, is a major thorn in the side of these companies.

Also, I wonder what will happen with the sales reps pay if the contracts get voided... Do they get paid? Or is it a cancel? Who's at fault?