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2. Rick Brokaw
Managing Partner of Vintage Security, LLC
• 1982 – 1996 Austronic Security, Columbia, MD
– Started as install helper at $4.00/hr and ended as GM with 80 employees, UL Central Station and over 10,000
customers
• 1996 Republic Industries purchased Austronic
– Company went from 150 installs to 400 per month via mass market methods
• 1998 SecurityLink - Ameritech purchased Austronic from Republic
– Regional Operations Manager of 26 branches from Tennessee to Connecticut
• 1999 Southwest Bell purchased Ameritech
– Retained position with new ownership
• 2000 Cambridge Security Purchased SecurityLink
– Retained position with new ownership
• 2001 ADT Purchased SecurityLink
– Resigned to start Vintage Security
• 2001 Started Vintage Security
• 2012
– 15,000 monitored alarm customers
– 80 employees
– 2 offices around Washington D.C.
– 77% Residential/23% Commercial
– Significant concentration in Homebuilding/Home Technology market
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3. Did you know….
There are many other educational classes about our
industry that are far more interesting than this
discussion of reducing attrition
HOWEVER
Nothing is more important than growing your RMR Base!!
Attrition is a true indication of your company’s health!
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4. • RMR Multiples range from low 30x for an
account base of less than $50,000 RMR to low
50x for greater than $500,000 RMR companies
• An account that pays $30 a month is
representative of approximately $1,200 of
your company’s valuation at a multiple of 40x
• At a rate creation multiple of 25x, a $35 per
month customer costs the company $875 to
create.
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5. What is Attrition?
Simply stated:
• Gross Attrition is the loss of RMR by cancellations and reductions stated
as a percentage by month. To annualize, multiply by 12
Example
Beginning RMR = $100,000
Cancellations = $1,000
Reductions = $100
($1,000+$100) / $100,000 = 1.1%
Based on the information above, the company would have a monthly attrition
rate of 1.1%, or an annual attrition rate of 13.2% (1.1% x 12) if they lost
RMR at the same rate all year
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6. Know Your Enemy!
• Our industry averages approximately a 12% attrition rate
– Are you an average company or a good company?
• Know your rate of attrition by cause/reason
• Vintage cause/reason codes for cancellations
– Moves
– Bad Debt
– Do Not Want
– Acquisitions
– Models Sold
– Lost to Competition
• Decide on a strategy that fits your company
– Personnel Responsibility
– Personnel Focus
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7. Vintage Attrition by Account for 2011
Vintage Security LLC
Attrition Report
Date Attrition Code New Accounts
Acquisition
Gross Net
Active Does Not Lost To TOTAL New RMR Attrition $ RMR Attrition $ Total New
Month Moved Bad Debt BGE Adroit Models Growth Attrition Recons Reactivations Attrition
Accounts Want Competition Disconn. Connections Monitoring Maintenance Accounts
Rate Rate
Jan-11 13290 30 22 19 10 0 1 2 84 175 91 7.58% 22 6 5.06% $ 2,451.07 $ 552.87 13381
Feb-11 13381 13 17 15 6 0 2 4 57 159 102 5.11% 15 4 3.41% $ 1,662.09 $ 199.45 13483
Mar-11 13483 23 18 26 11 0 4 1 83 173 90 7.39% 18 6 5.25% $ 2,315.75 $ 645.04 13573
Apr-11 13573 39 23 17 9 0 3 3 94 167 73 8.31% 22 0 6.37% $ 2,544.52 $ 369.17 13646
May-11 13646 48 27 20 10 0 9 9 123 170 47 10.82% 23 1 8.71% $ 3,216.89 $ 508.73 13693
Jun-11 13693 64 19 24 12 0 5 3 127 177 50 11.13% 31 5 7.97% $ 3,302.19 $ 267.64 13743
Jul-11 13743 49 21 22 2 0 1 0 95 187 92 8.30% 32 7 4.89% $ 2,767.34 $ 329.00 13835
Aug-11 13835 43 23 16 10 0 4 3 99 185 86 8.59% 34 9 4.86% $ 2,809.55 $ 398.51 13921
Sep-11 13921 43 18 8 6 0 3 4 82 218 136 7.07% 21 7 4.65% $ 2,241.09 $ 771.76 14057
Oct-11 14057 29 21 20 8 0 2 1 81 580 499 6.91% 20 5 4.78% $ 2,181.09 $ 259.67 14556
Nov-11 14556 21 15 18 10 2 2 1 69 207 138 5.69% 19 5 3.71% $ 2,004.95 $ 429.35 14694
Dec-11 14694 12 15 33 7 3 2 0 72 222 150 5.88% 23 7 3.43% $ 2,108.30 $ 410.77 14844
Total 2011 414 239 238 101 5 38 31 1066 2620 1554 7.97% 280 62 5.20% $ 29,604.83 $ 5,141.96
38.84% 22.42% 22.33% 9.94% 3.56% 2.91%
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8. Vintage Attrition by $ for 2011
RMR RMR RMR RMR Attrition RMR Attrition RMR Attrition Gross Recon Recon Total Net
Date
Monitoring Maintenance Total Monitoring Maintenance Total Attrition Monitoring Maintenance Recons Attrition
Jan-11 $ 338,224.24 $ 87,281.15 $ 425,505.39 $ 2,451.07 $ 552.87 $ 3,003.94 8.47% $ 507.00 $ 83.00 $ 590.00 6.81%
Feb-11 $ 339,502.98 $ 88,775.46 $ 428,278.44 $ 1,662.09 $ 199.45 $ 1,861.54 5.22% $ 334.00 $ 26.00 $ 360.00 4.21%
Mar-11 $ 341,716.10 $ 90,340.75 $ 432,056.85 $ 2,315.75 $ 645.04 $ 2,960.79 8.22% $ 430.00 $ 27.00 $ 457.00 6.95%
Apr-11 $ 345,111.48 $ 92,691.23 $ 437,802.71 $ 2,544.52 $ 369.17 $ 2,913.69 7.99% $ 537.00 $ 31.00 $ 568.00 6.43%
May-11 $ 349,019.07 $ 92,210.29 $ 441,229.36 $ 3,216.89 $ 508.73 $ 3,725.62 10.13% $ 530.00 $ 37.00 $ 567.00 8.59%
Jun-11 $ 349,409.98 $ 93,570.65 $ 442,980.63 $ 3,302.19 $ 267.64 $ 3,569.83 9.67% $ 838.00 $ 110.00 $ 948.00 7.10%
Jul-11 $ 353,719.81 $ 94,675.68 $ 448,395.49 $ 2,767.34 $ 329.00 $ 3,096.34 8.29% $ 746.00 $ 56.00 $ 802.00 6.14%
Aug-11 $ 355,161.10 $ 94,753.43 $ 449,914.53 $ 2,809.55 $ 398.51 $ 3,208.06 8.56% $ 814.34 $ 80.00 $ 894.34 6.17%
Sep-11 $ 358,416.56 $ 95,851.94 $ 454,268.50 $ 2,241.09 $ 771.76 $ 3,012.85 7.96% $ 582.00 $ 48.00 $ 630.00 6.29%
Oct-11 $ 367,502.60 $ 97,912.39 $ 465,414.99 $ 2,181.09 $ 259.67 $ 2,440.76 6.29% $ 471.00 $ 32.00 $ 503.00 5.00%
Nov-11 $ 374,521.79 $ 99,474.38 $ 473,996.17 $ 2,004.95 $ 429.35 $ 2,434.30 6.16% $ 451.00 $ 40.00 $ 491.00 4.92%
Dec-11 $ 378,226.06 $ 99,191.33 $ 477,417.39 $ 2,108.30 $ 410.77 $ 2,519.07 6.33% $ 579.00 $ 48.00 $ 627.00 4.76%
Total 2011 $ 4,250,531.77 $ 1,126,728.68 $ 5,377,260.45 $ 29,604.83 $ 5,141.96 $ 34,746.79 7.75% $ 6,819.34 $ 618.00 $ 7,437.34 6.09%
Attrition total by $ takes into account $3,400 in RMR lost during 2011 for price
reductions to save accounts and discounts to existing accounts
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9. Other Evaluation Methods
• Attrition by:
– Commercial/Residential
– Acquisition Company
– Year account originated (Age of Account)
– Accounts with/without maintenance
– Accounts with/without interactive services
– Price reductions/changes
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10. Focus on Reducing Attrition
• Moving (vacating premise, death, etc.) – 38.84%
• Bad Debt – 22.42%
• Do Not Want – 22.33%
• Lost to Competition (service issues, etc) – 2.91%
• Models Sold – 3.56%
• Acquisitions – 9.94%
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11. Moving – 38.84%
Go After The New Occupant
• Disconnection Form gathers info and directs recapture
efforts
• Sales Team Focus – Specific people for
reconnections/takeovers
• New Occupant Letter within 30 days
• New Occupant Postcard every 180 days after initial letter
• Gift Certificate to encourage your customer to select your
company for their next residence
Although this attack will not slow attrition by moving, it will
alleviate loss of accounts (Net Attrition)
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13. New
Current
Resident
Letter
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14. Current Resident Postcard – Front
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15. Current Resident Postcard – Back
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16. Bad Debt – 22.42%
• Immediate and compassionate phone response
to customers with financial hardship – Work It
Out!
• Have a concise, organized and well managed
collection procedure and Stick With It!
• Finally, don’t sell to people who can not afford
– Consider credit checks and salesperson chargebacks if
account defaults in 1st year
– Give price break for 5 year accounts
– Offer auto-pay to allow customers easy, no-hassle
payment process
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17. Collections Procedure
Vintage Security
DAY DESCRIPTION
1 Bill
30 Late Statement
45 1st Phone call from Vintage Security
60 60 day late statement with 1st letter
70 2nd Phone call from Vintage Security
90 90 day late statement with 2nd letter.
120 120 day late statement with 3rd letter.
145 Certified letter from Vintage Security
155 Monitoring cancelled; account closed; sales
rep is charged back if account within the 1st
year. Accounts submitted to IC for intense
collections, including credit reporting to all 3
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credit bureaus.

18. Do Not Want – 22.43%
Customer Doesn’t Value Your Service!
• Have specific people designated to handle cancellations
• Speak to the customer about value not contracts
• Honest, reliable and easy services
– No Voicemail Jails
– Never place on hold
– Be Positive!
• Quality Controls
– Billing Response Card
– Service Response Card
– Call after every install
• Communicate with customers via newsletters
• If you lose them, don’t close the door
– Send a disconnection letter keeping reconnection possibility available
in the future, say Good-Bye with a smile
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19. Billing
Response
Card
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20. Service Response Card
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21. Disconnection
Letter
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22. Lost to Competition – 2.91%
• Sales, Install, Service, Monitoring and Billing must be high quality
and customer focused
• Employees treat customers as management treats employees
• Do your employees care?
• Do your employees have the power to give great customer service?
• Does your company approach all decisions from the customer’s
perspective?
• Does your management get involved when customer relationships
are weak?
• Never leave an unhappy customer without expending your best
efforts
• Senior Management knows each and every disconnect
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23. Account Cancellation Form
Done By: Jessica Sales Person: Phil Kruer
Monit Acct #: 1234567 Customer #: 1234
Cust Name: John Smith
Customer Info
Install Address: 123 Main Street County:
City Laurel State MD ZIP: 20723
Premise Telephone: 301-555-1234 Alternate Telephone:
Passcode Written Confirmation
Verification
Date Received: 5/3/2012 Date Received: 5/3/2012
Initials: JM Initials: JM
John called in w/ verbal passcode. He is selling home and moving to SC. Thanked us for our service for 7 years.
Reason
Contract: Out Allied: $15.00
MIC: 84 Tellular: $0.00
Lgth of Cont.: 36 Vintage Inter: $0.00
RMR: $15.00 Tot Monit: $15.00
Account Info
Bill BOC: No Date Billed: Intitals: RSP: $0.00
Chargeback: No VIP: $0.00
Write off: No Test/Inspect: $0.00
Refund: $0.00 Tot Maint: $0.00
Old Customer New Owner
Name: John Smith Name: Harry Homeowner
New Address: Phone #: 410-555-9876
Alt. Phone #:
Moving Info Alt Phone #:
Gift Certificate Sent:
Current Resident Letter Sent:
Balance of Contract Billed: Recon Letter Sent:
Computer: Monit CXL: Vint Inter/Tell: VIP:
Office Use
Comptroller: Approval GM: Comm. ADJ:
Salesperson: Phil Kruer Date Given: 5/3/2012 A/R #:
Reconnection Test Date: Monitoring #:
Lead Info
New Cust. Name: Harry Homeowner 1st Phone#: 410-555-9876
Settlement Date: 2nd Phone#: n/a 23

24. What Is Your If you want
your customers
Company’s
to be happy,
Quality your people
Culture? must be happy!
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25. Sales-Installation-Service-Monitoring-Billing
• Install Quality Control after every install by individual on phone who
gives the GM all unhappy responses
• Service Response Cards/Contest
• Billing Response Cards
• Newsletter
– Do you have email addresses for your customer base?
• Monthly information on new products/happenings
• No Voicemail
– Live person answers the phone in less than 3 rings in every
department 24/7 365 days a year
• On Call Service and On Call Sales within 15 minutes of contact – On
Call Tech has 15 minutes, Management has 15 minutes and then
General Manager
• Maintain same day-next day service for routine calls
• Customer satisfaction contests and recognition monthly and at
company functions
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26. Installation
Quality
Control
Phone
Survey
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29. How Sticky Are Your Monitoring
Services?
• Offer Informational Monitoring services to give your
customers more reasons to stay with your company
• Interactive Monitoring (Alarm.com, Total Connect)
– Smart phone notifications with alarm, video and texts
– Weather on keypad
– Control HVAC and Lighting
– Lock and unlock doors
• Cloud Based Access Control (Brivo, Keyscan, Honeywell)
– Requires no customer infrastructure
– Access to system from anywhere
– No network support
– Automatic updates
– Automatic notification of system troubles to your company
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30. RMR
Make It Easy For The Customer
• Auto-pay from bank account or credit card
• $1.00 per month discount for auto-pay
• Offer discounts for annual and quarterly billing
• Establish simple, easy to sell maintenance pricing
that eliminate unexpected costs for customers
• Enforce quotas in sales for auto-pay and
maintenance agreements
• Avoid non-RMR deals that divert your company
focus
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31. Don’t Let The Competition Takeover
Your Company
Bigger = Less Flexible = Poor Service
Do everything they do with much better service!
Fight them for every account! 31

32. Upgrade Program For Customers With
Good Pay History
• Residential
Service Update/Additions
Description Regular
NEW 5 YEAR CONTRACT EQUIPMENT CREDIT
Out of Contract (New 5 Year Contract) -495.00
5th Year of Contract (New 5 Year Contract) -370.00
4th Year of Contract (New 5 Year Contract) -245.00
3rd Year of Contract (New 5 Year Contract) -120.00
NEW 3 YEAR CONTRACT EQUIPMENT CREDIT
Out of Contract (New 3 Year Contract) -345.00
5th Year of Contract (New 3 Year Contract) -270.00
4th Year of Contract (New 3 Year Contract) -195.00
3rd Year of Contract (New 3 Year Contract) -95.00
• Commercial
– Negotiate and be flexible
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33. Summary
• Track and Evaluate cancellations and prepare a strategy to attack each area of disconnections
• Focus your company on Customer Care – Upper Management sets the example!
• Avoid Non-RMR sales that divert focus from RMR growth
• Focus your company on growing and keeping RMR with as low a Rate Creation Multiple as
possible
• Reward your employees when they demonstrate superior customer care (Don’t miss the little
things)
• Make sure upper management demonstrates a willingness to get involved with Customer
Care when needed
• Empower your employees to make decisions to satisfy your customers
• Embrace new technology that enhances RMR growth and keeps your competitive edge
against all others
• Channel cancellations through capable, friendly and creative personnel who will save
accounts, not process the cancellations
• Sell Service Agreements
• Offer auto-pay with billing notifications
• Evaluate your company’s sales, installation, service, monitoring and billing from a strict
customer perspective – Make it very easy for the customer
• Grow your RMR!
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