Simplisafe: Quick Review and Update On New Equipment

Simplisafe, a self-install home security company based in Boston, just announced increased offerings in regards to the peripherals they sell on their website. These new motion detectors, glass breaks and also a new app available on your smartphone where a Simplisafe user can be notified of events that have occurred in the home.

Techcrunch wrote about the new peripherals here: http://techcrunch.com/2014/03/13/simplisafe-adds-new-sensors-services-to-their-diy-home-security-system/

Simplisafe sells their product direct to users through the internet or over the phone and then sends it through the mail for the user to install themselves. Packages range from $229 to $540 for the system (each package has increased equipment).

Simplisafe operates through a cellular connection between their unit and the Simplisafe central station. The systems do not have two-way voice or a dual backup network through digital phone lines or the internet.

Monitoring rates range from $14.99 for their basic monitoring to $24.99 for multiple features, which include Simplisafe’s app which allows you to remotely turn on and off the system and “secret alerts” – a gimmick where you place a sensor somewhere in your home for text alerts that someone has done an activity (such as opening a medicine cabinet, etc).

Simplisafe does not require a contract, which differs from other home alarm companies in the self-install space, such as Protect America, Frontpoint, and Lifeshield.

Simplisafe is a good option for a DIY self-install home alarm system, far lower in price than other self-install home alarms, however, the fact they do not offer live two-way voice is a detriment. Perhaps they will at some point, however currently they only offer traditional monitoring.

The other knock on Simplisafe is the high upfront cost of the system. The quality of the hardware is on par with others in the space, however, the upfront cost seems higher than it should be. Perhaps the company wants to limit their risk since they don’t require a contract between them and the customer.

Regardless, Simplisafe is a better value than most companies in the self-install space, and definitely a far better value than traditional home alarm systems, which require an installer, contract, and high monthly fees.

If a Simplisafe customer cancels their monitoring and wants to switch to another company, can another company monitor a Simplisafe system? I’m not sure. This is definitely something potential Simplisafe customers should be asking before they sign up for a system.

Think protection when buying or leasing a home security system. Make an informed decision and remember to spend your money wisely.

 

What’s The Value Of A Home Alarm Contract?

Virtually all alarm companies make you sign a contract when you agree to their services. Usually security contracts are for 36 months (ADT, AlarmForce, Reliance Protectron, Monitronics, Safetouch, Bay Alarm, Vivint, Rogers Smarthome Monitoring, CPI, Frontpoint and Protect America are all 36 month contracts). Ackerman will make you sign a one-year contract. Why is it these companies make you sign a contract and what value is it to you to sign it?

The reason why you have to sign an alarm contract to get home security monitoring from the companies above is so they can lock you in to being a customer and make you commit to continuing service for those 36 months. This allows them to more than cover the cost of any equipment you’re leasing and also they can make a good profit off you as a customer.

Alarm companies may have zero money down offers, but over the course of the contract you are will be paying significant amounts of money far beyond that of the upfront costs. Beyond that, by locking yourself into a contract, you are forced to stay with the alarm company, even if the service is bad.

So, what value does the customer get from signing a contract?

Truthfully, it all depends how you look at it. The alarm company will market the value as no money upfront and continued service, but the fact is that with most companies the cost of the monthly will be outrageous and the company will profit tremendously from you over the course of your contract. For example, monthly two-way voice monitoring with ADT is $39.99/month, and you have to sign a 36-month contract, so that guarantees that ADT will receive $1439.64 from you over the course of your contract. Vivint charges $49.99 for their basic monitoring package with a 36-month contract, so that works out to $1800 over the contract.

Large amounts of dollars guaranteed to the company, regardless of the quality of service.

Marketing-wise, the companies will claim the contract promises you no charge service, however there are certain things not included in the contract which will be required for servicing, which will result in money coming out of your pocket to pay for it.

Think protection is free? Not quite.

When a company starts to offer a premium alarm service without a contract, then the industry will change forever. Contracts aren’t necessary for the customers. In fact the customer benefits from not having a contract for their home alarm. The thought in the industry is that if a customer doesn’t sign a contract, then they’ll leave their monitoring service far before the 36 months, once a better offer comes around. Personally, if the alarm company is providing a superior home security service, at a low price, then the customer will stay with the company without a home alarm contract.

In fact, the lack of a home alarm contract could very well be the main reason the customer stays with the home security company.

ADT, Vivint, Frontpoint, Protect America, AlarmForce and the rest could never switch to a no contract model, since they have so many current customers already under contract, the rebound effect would be tremendous. Beyond that, if they did offer a secondary no contract offer, the monthly monitoring and upfront costs would have to be significantly higher, due to them eliminating some of the risk which would arise by not having a contract to tie down their customers.

Prospective customers should weigh all of their options when shopping for a home security system, and ask themselves if a 36-month contract is in their best interest. If it is, then sign the bottom line, but if they think protection can be found at a more reasonable price without a contract, then look elsewhere.

Why Do Home Alarm Companies Charge Such High Prices?

Alarm companies charge varying upfront rates and monthly charges for their services. These can range anywhere from $99 upfront to hundreds of dollars and then monthly rates can range from $20/month to over $60/month. When looking at these amounts, we have to ask ourselves, why do alarm companies charge such high prices for their equipment and services?

The answer is simple – because they can.

The home security market is elastic. An alarm company will typically charge as much as they can, while remaining to acquire new customers. If the customer will pay the amount, then the company will charge it. Once the business volume is established, the company becomes locked into those prices.

AlarmForce charges $25/month for two-way voice security, CPI is around $30/month, ADT’s prices range from $29.99/month to $40/month for two-way voice protection and Vivint’s packages can from $49.99/month to as high as $70/month.

ADT and Protectron have dealers, so the pricing on their monthly monitoring ranges. AlarmForce, Frontpoint, Protect America, CPI, Ackerman, Bay Alarm and Vivint do not, so it’s more of a fixed price depending on features and equipment.

Prices range based on amount of equipment, type of monitoring, if home automation features are included, and the company’s feeling on what the market will pay for service. Supply and demand is a constant amongst the industry – however, different companies have differing views on what truly equals the best value for their customers.

Beyond that, alarm companies understand that it’s always easier to raise prices than lower them. When prices are raised, the company benefits but the customer loses out. Typically, most home alarm companies have it written into their contracts that they reserve the right to raise the monthly monitoring rates at anytime. And they do.

It’s hard for an alarm company to lower their monthly monitoring prices due to the negative effect it would have on the bottom line. If you already have 5,000 customers and you lowered your monthly monitoring prices by a $1 for new customers, then old customers would want the discount as well, or they’d cancel their contracts. Once the discount is given, then suddenly the alarm company is now down $5000 per month. The rebound effect is huge, which is why it’s almost never done.

So in summary, the main reason why home security companies charge the high amounts they do per month is because the market allows it. If prospective home alarm shoppers stopped going with these high priced home alarm solutions, like ADT and Vivint, then they’d be forced to charge less. Plus if another alarm company came into the market offering a lower cost solution for protection, customers would think of going elsewhere.

The alarm market dictates how much the companies can charge.