Attrition might be a fact of life, but that does not mean you should ignore it. In fact, if you don’t have strategies to address all
of the reasons your customers cancel, then you are losing RMR that you could be saving and spending money to generate replacement RMR instead of fueling new growth.
Different reasons for cancellation require different strategies. (To learn more about tracking the reasons for your cancellations, read our blog post Top Reasons Alarm Customers Cancel & What You Can Do About It.
Cancellation for company-related reasons can be addressed through changes in procedures, providing employees with better resources, training and supervision to address customer service issues, developing equipment standards to alleviate system issues, and implementing better processes for recordkeeping, billing, and collections to minimize account aging and loss.
You can also combat the drivers of attrition that seem out of your company’s control by making sure you know and understand how these threats actually impact your customer base and by providing your employees with the tools, and the authority, to address different cancellation reasons before it happens.
For example, relocation is one of the most common causes of cancellations. But customer moves can actually provide you with an opportunity not only to retain the departing homeowner, but also to get a referral to the new one. Consider creating a relocation program that gives customers who are moving locally the ability to transfer their services to their new home and offers incentives to the new homeowner to use your services.
System non-use is another frequently cited reason for both customer cancellations and non-payment. One way to combat this form of attrition is to communicate regularly with your customers about the value of owning and using their security system, and specific services your company provides, including always-active services like fire, carbon monoxide, and water detection. Customers stop paying for other reasons including both financial issues and customer dissatisfaction. You can reduce the number of non-paying accounts by addressing the underlying reasons for the nonpayment, as well implementing sound billing and collections processes.
Do you know how many customers you are losing to your competitors, and why? Once you have these answers, you can decide how to take action. Are your service offerings competitive? Consider offering the latest services and technologies (home automation, video, or wireless, for example). If you already do, let your customers know so they do not go looking for those services from a competitor. Actively market service and technology upgrades, too. If you wait for you customers to call you, your competitor may come knocking on their door and offer to install a new system for free.
Want more help combating your customer cancellations? In our latest whitepaper, “Attrition: The Silent Killer,”
we provide key strategies for combating attrition, including understanding and addressing the reasons your customers are cancelling. Also, check back here for more blogs with information and tips for measuring, monitoring and dealing with attrition.