Summer "door knocker" season is approaching, I came across this video while doing some searching:
Can any alarm dealers comment on how the resi market has been the last few years? It seems like not that long ago the summer market was pretty hot for sign-ups, but this video makes it seem like that market has dried up.
Is the pest control market really better than the alarm market?
This is really interesting, thanks for sharing.
They basically rip on the alarms market (starting at 2:44) being full of uneducated, unwise, and marginal salespeople.
"Our guys are into college, into education, they are investing their money, it is not just about buying cars and clothes and things like that."
Todd Petersen does not approve this message....
The video on how to sell alarm systems:
Dotted Line from Elite Security on Vimeo.
Non-deceptive, deceptive opening followed immediately by a deceptive offer.
"They allow me to waive a $1200 system for the ones I choose on this street."
Which is, what, everyone?
2:56 "Don't tell this to everybody, I don't have time to do this for everyone on the street."
I think the guy is probably pretty successful when selling, and he does a good job at describing how to do it without coming off sleazy; he's an excellent ethical tightrope walker.
Some of his best moves go unmentioned, one is how when the guy wants to know if he has to keep the service for three years he says,
"Yes, we need you to stay connected and keep the sign out for three years."
Like he gives a rat's ass about the sign. But it makes the guy feel like it is about the advertising.
Notice also how he makes the guy give him as much time as possible, getting alternate contacts, phone numbers, secret codes etc. All things that could wait till after the sale, but each one makes the guy a little more invested....
Which is, what, everyone?
No, he's only authorized to do that for up to 10 homes, and 7 have already signed up! ;)
I wonder if they go to houses semi-randomly, or at least don't go directly to a neighbors home after just signing someone up? The "deal" would lose some of the special appeal if the homeowner watched him walk directly to the next house and start with the same pitch I think.
Hence another one of the guys rules, "same day installs at all costs".
Btw, guy says if you don't get install that day, but schedule it, you have a 50% chance of it falling out.
That's the kind of stuff I wanna sell...
That's the kind of stuff I wanna sell...
I can see two sides to that.
One is the obvious, you're kind of pushing the product on the customer and having to resort to a lot of evasive tactics (have a free remote, just pay $99 to "activate" it).
The second side is that at the end of the day you pretty much know what you closed and where you are relative to goals. Contrast this to selling larger accounts that can take 6 months from first meeting to actual install, and the deal is technically in the wind the entire time.
It's not really a direct comparison, but I can see the draw of selling something where you can go from door-knock to closed contract within a few hours.
I wonder what the rep gets for selling a system. A good metric on a 3-year contract like that is 1-month contract fee as commission, so I'm guessing they earn around $50/house.
The entire 3-year contract is only $1700, and part of that is equipment (however cheap, $150 worth of stuff?) and tech install and training time (2 hours @ $75/hr for the tech?). I don't think the rep could get more than $50-$100 for that.
I wonder what the rep gets for selling a system. A good metric on a 3-year contract like that is 1-month contract fee as commission, so I'm guessing they earn around $50/house.
Really, that little? So a selling a system a day only gets you $15,000 a year?
No RMR?
No RMR?
It varies, but in my experience it's typically a 1-time commission payment.
Most companies doing RMR business will have data for CAC (Customer Acquisition Cost) and TLV (Total Lifetime Value) averages, among other things. Accounts stick around for years on average, and often times longer than the rep that closed the account. Trying to pay commissions regularly on accounts like that gets tough. Plus, if the rep quits, the company theoretically still captures the same value, and the rep should get the same commission, and you're not going to be sending commission checks to ex employees.
The solution most companies arrive at is to pay 1-time commissions based on some average computed cost, but sometimes not until the account hits a milestone like 3 months of payments.
I don't know what these guys net, but I'm thinking you would need to set it up so they needed to close more than 1/day. Maybe there are kickers at certain points, $100/house plus a $3K bonus every 100 houses or something. It looks like the entire sales cycle is about 30-45 minutes, unlikely that you could "earn a living" by doing 45 minutes of actual selling per day, and then spending another 7 hours just getting rejected.
FWIW, Glassdoor says this:
....unlikely that you could "earn a living" by doing 45 minutes of actual selling per day, and then spending another 7 hours just getting rejected.
Yes, but although these foot soldiers might pound pavement for 8 straight, the hours between 6-8PM are like the Christmas season is to retailers; the rest of the time you're talking to Harriet and Blah Blah Nyborg.
Our sales people get $15.00 an hour as a base pay; this helps on the slow days so that they are not worrying about putting food on the table for their families (This weeds out about 90% of the unethical and aggressive sales tactics that typically are attributed to commission based only sales.) On top of the $15.00 base pay, the sales rep gets 15% commission on the gross profit of the sale, not the total sales. On a 3-year contract priced @ $49.00/Mo. with $0 down would equate to about ~$130 commission based payout.
We are a professional security company in that we just do not sell 3-1-1 alarm kits; we provide on the spot security consultation and what it takes to protect all entry points. As a matter of fact, it is rare that we even sell a motion detector. As long as the property is protected with sensors on all windows and doors, motion detectors are really not required in our opinion.
We do not conduct any "advertising sales", we are straight to the point with all costs explained upfront. Basically, it comes down on how much they are willing to put down to lower their monthly; if the customer is not able to afford some of the high upfront costs to an alarm system, then we tear up the pricing (across 12 months) and throw it in with the base cellular monitoring fee (Base Pay of $29.99). A Honeywell 3-1-1 kit from ADI our cost is $304 with a cellular module. All-in-all, the total monthly comes out to be like $47.00; the additional $2.00 is to cover the "Free Security Consultation"; face it, time is money, there are no free lunches.... EVER!
The beauty to our contracts that our customers love is the fact that at the end of the term contract, they have the option to go to month-to-month @43.99 or extend the contract to a 1-year term @39.99 or a 5-year term at $29.99; you give the customer some options, that is your selling point! ADT, Vivint, and the rest of the online gigs do not have those types of options, and that is how we sell.
All I can say is ......Damn.
How common is this behavior? How hard is it to be successful on the residential alarm side without matching these terrible tactics?
Some don't take no for an answer:
Edit: link fixedPolice say a Stone Oak homeowner was shot and killed by a man trying to sell him a home security system....
Off topic a little,
A good friend of mine called me just last night and told me about the sales guy that knocked and was from "your" alarm company and just wanted to come in, take a look around and make sure everything was okay. Generic shirt etc. It never stops. I asked him did he sign anything....
I live in Utah and no joke...had 4 different pest control companies knock on my door in the past 3 days. Out my window right now I can see the new Vivint Solar high rise building. As long as there are Mormon missionaries, I'd expect there to be all sorts of new door-to-door companies started selling some sort of monthly RMR service.
I don't think it's about the product/service being sold as much as it is about the access to the sales force that knows how to work hard, looks professional, and are driven. In my neighborhood, there are 25-30 year olds building massive 10,000 sq. foot party homes all over the place. Essential oils, solar, alarm systems, Internet services, TV services, Mormon scripture cartoon DVDs (1 per month), gym memberships, weight loss programs...
Doesn't seem to matter the product or service, these guys are getting rich fast if they are able to recruit summer sales talent out of the local universities (BYU, University of Utah, Utah State, Utah Valley University, Southern Utah University, BYU-Idaho, Idaho State...).
The recruiting game is crazy. It used to be about throwing a pizza party in the late winter and signing up people to sell for the summer. Now these guys are taking potential sales guys on crazy trips across the world spending millions a year to get their sales forces together. I saw at least 6 people in my neighborhood at the Super Bowl this year either recruiting or being recruited on my FB feed. It's nuts.
Doesn't seem to matter the product or service, these guys are getting rich fast
3, thanks, very fascinating!
How rich are they getting? $100,000 a year? $250,000 a year? More?
And is it just from selling door to door or is their some sort of MLM component where you get cuts from who you recruit?
I struggle to understand how door to door sales could be so profitable.
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