Securewatch 24 (SW24) is entering into the US residential intrusion market with a twist to conventional wisdom — no long-term monitoring contract, a move that will add convenience and portability for its customers. Customers will not be asked to sign a long-term contract; instead, the company said customers can select from several lifestyle intrusion packages, own their wireless equipment outright and move it when they want to, as long as they pay a fee upfront that covers installation and other costs. Monitoring is month-to-month.
Securewatch 24 (SW24) is entering into the US residential intrusion market with a twist to conventional wisdom — no long-term monitoring contract, a move that will add convenience and portability for its customers. Customers will not be asked to sign a long-term contract; instead, the company said customers can select from several lifestyle intrusion packages, own their wireless equipment outright and move it when they want to, as long as they pay a fee upfront that covers installation and other costs. Monitoring is month-to-month.
"We are turning the conventional residential security model on its head in favor of a more customer-friendly model," said Jay Stuck, VP of Sales and CMO. "Lifestyle security sales positioning is opening up a huge potential consumer market, estimated to be another 30 million possible American homes. We believe consumers will willingly pay for this technology and the freedom from long-term monitoring contracts at the time of sale and stick with us for our customer service and the convenience we bring to the table. We believe the market is ripe for a new message and paradigm — no long-term monitoring contracts."
Stuck, who is widely credited with creating the first direct response TV commercial for ADT in the late 1980s and was one of the key people who helped commoditize the residential business for that company (which ultimately grew to a multibillion dollar business), said that proprietary research indicates that customers resent having to be tied to long-term contracts and to be responsible for the termination fees and other costs associated with relocation or dissatisfaction with alarm company service. He said SW24 believes this new model will resonate with consumers.
"For the past 25 years, residential security companies have gone to market in the same way: lose money up-front to gain the customer and then break even via the monitoring contract months later. When you stop to think about it, the model is no longer sustainable in this economy. What other industry loses money up-front on each sale and waits for years to break even, and then hopes to retain the customer for a few more years so they can begin to make a profit by nickel and diming the subscriber? We've looked at the future of the residential security business and decided to change the model; it's a fresh take on the business that is good for SW24 and for our customers," Stuck said.
"We are not prepared to put intrusion subscribers in this position any longer. We plan to show the security industry that just because we as a group have marketed that way over the past 25 years doesn't mean we have to market that way over the next 25," Stuck added. "This model will add value to the customer's experience by adding flexibility and convenience. Our subscribers will not be merely a faceless number to be sold and resold to other monitoring companies or be yoked to a long-term contract subject to expensive termination fees and other costs."
SW24 said it realized that the move was not without considerable risk and that they believed the rest of the industry would be watching closely to see if they are successful. They also said they were not concerned that the new month-to-month monitoring model destroyed the intrinsic resale value of a customer contract that has driven the dealer channel over the past decades.
"The industry is already shedding its old skin without realizing it. The success of the ‘summer program' companies, the rise of telcos and cable providers, and the foothold that DIY Internet sales-based companies have established have all combined to shake up the industry," Stuck said. "Inertia is ending. We believe that the security industry and our customers will look back on this move as a game changer for the better."
The new concept is being implemented next month in the New York City metro area by SW24's direct sales organization and will be followed later this fall by a major TV commercial push, SW24 said. The company said it is also readying its website and related materials to reflect the strategy. A key addition to the SW24 residential sales plan going forward will be the opening of SW24's 25,000-square foot Fusion Center based in northern New Jersey at the beginning of 2013, the company added.
SW24 has been aggressively moving into technology partnerships and into other strategic vertical markets (education, health care, hospitality, retail), including enterprise-level integration this year and now has a national footprint.