Vivint: A Company to Celebrate or Condemn?

Author: Brian Rhodes, Published on Feb 14, 2012

Vivint is one of the fastest growing and most aggressive companies in the entire security industry. Many puff pieces, including a recent 'Dealer of the Year' award, laud the company as 'being a true leader'. The most perplexing aspect of this positive press is the rather contrary reception Vivint recieves from its agrieved customers. In this note, we examine reasons to be deeply concerned about the company's tactics.

Orginally founded in 1997 as APX Alarm, the company is headquartered in Provo, Utah.  The past five years have resulted in impressive growth for the company in an already mature industry dominated by players like ADT, (formerly) Brinks/Broadview, and Protection One. As of early 2012, the company claims over 550,000 installed systems throughout North America.

A recent transcript of an interview from SS&I magazine, Vivint's CEO discusses his company’s overall business strategy.  A review of this transcript turns up several compelling details about the company and Vivint’s overall market prerogative of the home security/monitoring market.

Vivint’s product and services mix primarily features branded home thermostat and intrusion security monitoring packaged together in the Go!Control  platform. In a recent effort to trade on the ‘renewable energy’ movement, Vivint introduced a solar power supply division, where Vivint is selling on-site accumulated solar power to homeowners on an RMR basis.

Is the diverse portfolio profitable?  In the recent SS&I piece, Mr. Peterson was noted as saying:

“Obviously the lending market was tough and in this industry you rely on debt for growth, unless you're just barely growing, but we're growing pretty rapidly. It limited our ability to attain what we could have or should have gotten to as a company. Even though it looks like pretty phenomenal growth, what could have been would have been substantially different, and more than that.”

This melancholic quote infers the company is still looking to achieve positive operational cash flow not dependent on outside investment.

Questionable Sales Tactics

The company shares its philosophical sales techniques with the gritty models of national pest control and lawn care companies.  The aggressive door-to-door sales and neighborhood canvassing strategies applied by Vivint are a direct result of the previous experiences of company principals in those industries.

The volatile expansion of company operations have resulted in ‘package’ selling to the residential markets due to vague security market acumen and watered-down technical experience in many regions.

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Poor Ratings

Perhaps the most damning indictment of the company can be found in its ‘Better Business Bureau’ grading page.  Often referenced by those on the harsh side of ‘caveat emptor’, the BBB gives Vivint a (very) poor ‘D’ rating from over 1300 complaints.

The internet is littered with bad press, consumer advocate warnings, and nightly news videoclips that reflect poorly on Vivint’s sales methodology, service costs, customer service, and contract supervision.  Ten minutes of research yield hundreds of substantiated complaints from a variety of esteemed sources.

For instance, while Vivint brags about its declining attrition rate, this is fueled by their onerous cancellation terms as described in a Feb 2012 post from a consumer advocate warning website:

"I spoke to a customer service rep. on Jan. 6, 2011 to ensure I would not have issues cancelling after the Aug. 5, 2011 dealine and she said no problem you can cancel at anytime it is month to month after just let us know when you want to cancel by calling for further instructions. Today when I tried to cancel they state since I did not cancel in writing 30 days prior to the end of the contract that I was automatically re-newed for a new one year contract term that would end Aug. 5, 2012.  I said I did not agree to these terms that a rep of their company did not make this clear when they pushed the security system into my home."

Even worse, is a recent example of Vivint's obstinance to nullify a contract after a customer lost their home in a tornado. Is this leadership?

In spite of recent statements to the contrary, it appears Vivint is still leveraging unscrupulous business practices.

A Bad Representative of the Security Industry

In spite of significant growth, Vivint represents many things that are wrong with the ‘home security industry’. That market is littered with the dirty laundry of the ‘old guard’ bad player companies, and unfortunately Vivint is contributing to that sentiment.

Security companies should be protecting their customers from loss, not precipitating it. Until the residential security industry recognizes this dynamic, it will continue to struggle shedding its bad reputation.

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