Wireless Home Alarms – ADT competes for National Accounts

Posted by , , at 10:00 am

ADT is in the news again, this time in a story highlighting one of their competitors – and exposing a very profitable segment of the alarm industry known as national accounts. ADT is a dominant player here as in home security, but they have far fewer competitors for national accounts. Why is this important? If you are a homeowner looking for alarm services, you may be interested in how some security companies “rank” their customers. Here’s a link to the article from an alarm industry publication, and a telling quote:

Taking market share from ADT is at the top of the to-do list for industry veteran Gary Fraser who joined Vector Security two weeks ago as Director of North American Sales for Vector’s National Accounts Division. He estimated that ADT owns about 50-55 percent, Checkpoint has 20-25 percent market and the remaining 25 percent is split among five or six players.

National accounts are a little-known and less understood segment of electronic security. The customers are companies with hundreds or even thousands of locations across the US: examples are banks, retail stores, and restaurant chains. Intrusion monitoring, fire monitoring, video monitoring, and even EAS (electronic article surveillance) are standard services. The national account sector brings in hundreds of millions of dollars every year, but there is a dark side – for a company like ADT, these efforts can also siphon off some of the best talent and focus. Here is a statement from ADT’s own web site, describing their National Account Division:

Our National Account Division is comprised of our most experienced security consultants and personnel hand selected to service our top clients on a one to one basis to ensure the highest level of satisfaction.

My own personal experience has shown this to be the case: at ADT, national accounts get the mot attention. What ADT doesn’t talk about is what I found to be an unwritten but clearly understood “pecking order” of service priority and customer satisfaction:

  1. National accounts customers come first.
  2. Commercial accounts come second.
  3. Residential accounts come last.

I learned this lesson the hard way when ADT purchased my former employer, and I went to work for Tyco, ADT’s parent. It took ADT exactly one year to convert our company’s customers (over 100,000) to its own billing system, and in the process I had a bird’s eye view of service levels and cancellations. It happened to be a challenging time for ADT: they had acquired too many companies in too short a time, and some regions (such as the Northeast, where our customers were located) had been stretched beyond capacity. But the national accounts acquired as part of our company never suffered, while residential customers were treated poorly, and canceled their service in droves.

Does this approach make sense for ADT? They are focused on the big money, so they must think so. But their residential cancellation rate is still on the high side: for a company like FrontPoint, leading the way by combining interactive, home wireless security with world-class service, ADT creates a wonderful opportunity for comparison shoppers. And while FrontPoint serves many commercial customers, we really do specialize in protecting homes and families. On-line reviews are the best proof, and we invite anyone to make the comparison. As a FrontPoint customer, you will never have to compete for our best service. And when it comes to ADT, we know it’s not all bad – but this is clearly a case where bigger does not mean better. We’d like you to share your alarm service experiences – the positive and the negative. Please feel free to post them  as comments here.

Comments (8)

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  1. Alan

    Oh, also… I found this post to be highly interesting (interesting inside industry information). Thanks for keeping the blog going strong!

  2. Alan

    Oh, also… I found this post to be highly interesting (interesting inside industry information). Thanks for keeping the blog going strong!

  3. Alan

    Well, I’ve been with you guys for almost 4 years now, and anyone I’ve ever talked to at Frontpoint has always made me feel like a valued customer. It really feels good and is really appreciated!

    Thank you!

  4. Alan

    Well, I’ve been with you guys for almost 4 years now, and anyone I’ve ever talked to at Frontpoint has always made me feel like a valued customer. It really feels good and is really appreciated!

    Thank you!