The Wink Problem, Setting Customer ExpectationsBy Joshua Unseth
No doubt the pandemic has hit many American businesses hard. The security industry is no exception. Many of our competitors have signaled hardship or are going out of business entirely.
Luckily for Alarm Grid, our business model seems to run parallel to what consumers are wanting at the moment. Want an installation that doesn't require someone to come to your home? Are you interested in maintenance of your system that is neither expensive nor requiring face-to-face communication? We're your choice, in that case.
That said, we're not the only option. The difference between Alarm Grid and many of the modern DIY options that have popped up is in our product. Most DIY options are selling security equipment that functions exactly like the old stuff. The only difference is that you can only be monitored by the company you buy it from. We sell professional equipment, the same stuff that ADT installs. Most of the professional installers are familiar with our equipment because it is the same equipment they put on your walls. take note of the security systems on the walls of banks, restaurants, and other local businesses in your area. You'll usually see the L7000, the Lyric, a 2GIG GC2 or GC3, a Qolsys, or a VISTA keypad. The systems we sell are battle tested.
We have always been of the opinion that these systems are excellent for DIYers because they offer the olde time security that most homeowners are looking for. But our unique approach to getting them in your home means that you have full control over how they function. That's what we believe consumers really want.
Alas, in the last few years, many entrants have begun selling equipment that is (sometimes) well made, with the promise that you can use a free app to get everything that a traditional system offers. We have always been of the opinion that this sort of offer can only last so long. Think about it. Free video? Where is it stored? Someone else has a server somewhere that is holding that video. Someone else is paying for you to use their bandwidth to look at your video. Someone else is paying to maintain an account for you. Ultimately, the new so-called "freemium" model leads to consumer disappointment.
This last week, Wink, a low-cost security system manufacturer, announced that their free system is free no more. Their customers are being asked to pay $4.99/month just to get access to the system. Cheap? Yes. But, ultimately, not what Wink's purchasers wanted. When they bought their systems, they bought them thinking that the app would be free forever. Well now, as the company presumably runs into financial difficulties, they are trying to figure out ways to survive.
Every freemium model eventually runs out of goodwill. Most of these companies launched their offerings assuming that customers who don't pay would eventually pay. It's a good enough thought. But the truth is that most of the "free" offers were almost as good as the paid. Thus, consumers stuck with what was free. The companies are left holding the bag. We're not saying all this to justify Wink's change. But we thought it would be the kind of thing that would serve us in explaining the difference and highlight the risks of going with a new security company with new security equipment that is proprietarily monitored by them.
Professional Equipment Obsoletes Much Slower
While professional equipment isn't necessarily forever, its window of obsolescence is quite a bit bigger than most proprietary equipment. VISTA 20Ps from the early 2000s, for example, are still in people's homes. We see even older VISTAs from the 90s, occasionally, that are functioning perfectly well. While we usually recommend people consider replacing these older systems, they simply don't have to. They still work.
In more recent years, modern equipment has obsoleted a bit more quickly because cellular providers have changed their networks. Some older systems simply can't be upgraded to the new network and need to be switched out. But for the most part, most systems just need a new communicator put in them. The Lyric, for example, can be updated by simply popping out the old cellular card and popping in a new one. The system is well made, and should keep on chugging until the next time cellular networks decide to obsolete their old networks in favor of a new one. Inconvenient, yes. Expensive, not hugely. Most systems can be upgraded for between $80 and $120. Amortize that over the time the average consumer has a product, you're talking a few bucks a month in maintenance.
Rate Hikes Don't Result in Trapped Customers
Some companies make a habit of increasing the cost of monitoring to their customers. Wink went from $0/month to a mandatory $4.99 if you wanted to keep your equipment working. Wink's customers are trapped. The only way out for them is to either not pay it and watch their equipment brick, or take all their Wink equipment out of their home and find a new provider of security. The cost to them will be massive. They will need new equipment, they will need to spend time and effort getting the new system set up and working like their wink was set up and working.
Proprietary equipment allows companies to trap their customers. If the company goes out of business or does something politically that you disagree with, you can't easily leave them. Rather, you can't cheaply leave them.
Professional equipment, on the other hand, serves the consumer. Professional is just another way of saying the equipment is open. You can leave the company you're with, and any other "professional" alarm company can take it over. This removes you from the problems of being potentially trapped. If your alarm company goes out of business, you can move your equipment to another alarm company.