Commercial Integrator + Security Sales Jan/Feb 2024 - 38

MONITORING MATTERS by Morgan Hertel
The Real Cost of False Alarms
I WANT TO PAUSE the issue of how to prevent false
alarms and, here, talk about their true costs.
Although I understand there are a number of meanings for
the term " false alarms, " I want to look at two scenarios:
■ In the fi rst, the alarm is triggered but results in no dispatch.
I'll refer to this as a false alarm.
■ The second is when it turns into a " call for service, " which
is how a public-safety service would classify it.
Both are important, but they mean diff erent things.
In some recent studies, including one by Parks Associates,
false alarms are one of the most distressing and problematic
events that can occur for a subscriber or security system user.
Dealing with a false alarm is unsettling and can be unnerving
because there are so many unknowns. You have to remember
your password; you're worried about the police or fi re
department showing up; there's the likelihood of a fi ne or fee.
All these concerns are swirling around in the subscriber's
mind. I can tell you that, even though I am in the business, it
stresses me out, as well!
Relationship Between False Alarms and Churn
You can track the companies that have lower false alarm rates
because they also have lower churn. There is a pretty direct
relationship to this.
And for companies that live and die by four-star ratings or
Net Promoter Scores (NPS), that relationship can reveal a dayto-day
struggle and result in poor ratings and, ultimately, bearing
the cost of replacing customers. And the cost of acquisition
goes up every single day.
Now, let's look at the cost of a false call for service. This
occurs when there was an unnecessary dispatch for an alarm,
with no crime committed. The costs associated with this situation
can double the previously mentioned stressors.
There's also the direct cost for the dispatch, which takes the
form of a fi ne or fee levied against the subscriber, alarm company
or central station. These costs can vary from city to city,
and they are direct: Someone is going to write a check for that
response, even if it's a private guard response.
The Biggest Cost to Consider
While writing a check for a false call for service is never fun,
it's an easily calculated and resolved expense. It's really not
the biggest cost to consider. The real cost is that agencies are
understaff ed and overworked.
That real cost will only be realized (a) when fi rst responders
can't come anymore because they have too many calls to
respond to or (b) when the costs to respond become so prohibitive
that no public service can aff ord it. That would signifi cantly
change the way we do things.
10 Simple Rules for False Alarm Reduction
1. Put a team in place to manage this. Ensure the team has
representation from all parts of the business, including an
executive champion who can make decisions and make
things happen.
2. You can't manage what you don't measure. You need to
measure all false alarm statistics, get a baseline and then
set goals for yourself. Then, monitor your success.
3. Follow up with a customer service representative on every
dispatch and a percentage of all alarms. Very quickly, you
will learn more about how happy or unhappy your customers
are. The goal is to fi x malfunctioning systems, so do checkups
on systems as you work through these calls. This will
generate a signifi cant amount of service revenue, as well.
4. Replace system and sensor batteries every three to fi ve
years. I did this with an alarm company and, in three years,
reduced my numbers by 25%.
5. Make sure your staff is programming or leaving in the
CP01 panel programming. It's there for a reason, and there
is no excuse to remove them for most systems.
6. Make sure your monitoring center has processes and
instructions for how they use cancel/abort signals,
openings-aſt er-alarms, exit-errors and recently-armedsystem
messages. You should never be dispatching on
alarms when these signals come with them.
7. Get off POTS lines! Too many alarms are missed or end up
on the wrong accounts because of this.
8. Use SMS messaging for alarms. The SMS application needs
to enable the customer to cancel an alarm. This alone will
reduce your calls for service 40% to 50% in short order.
9. Have a process to allow the subscriber to recover or get a
temporary password when they've forgotten it. About 25%
of your calls for service are because of wrong or forgotten
passwords.
10. Spend time with your local alarm coordinators. This will
earn you a lot of goodwill and help you understand the
needs of the local responders.
False alarms and false calls for service cost us all. It will
require all of us to work diligently to reduce them. As AI and
AVS-01 become mainstream, there will come a time in the nottoo-distant
future when they will become the exception.
But, until that time, we do have good tools and proven processes
to signifi cantly reduce both.
It's up to you to make it happen. SSI
MORGAN HERTEL is vice president of technology and innovation for Rapid Response Monitoring. He can be reached at mhertel@rrms.com.
38 Commercial Integrator+Security Sales & Integration | Jan/Feb 2024

Commercial Integrator + Security Sales Jan/Feb 2024

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