Resource Center

What Is An Alarm Factor? And How Yours Is Costing You Money

Alex Flitton
May 15, 2018 8:33:59 AM

Even after a dealer has gone through the the process of finding the perfect monitoring partner and signed a contract, it still has its own work ahead of it. While the monitoring partner is capable of handling signals and resolving emergency events, it cannot repair faulty equipment or fix installation issues. Faulty equipment and bad installations are two variables that contribute to what is called an alarm factor.

What is an alarm factor?

An alarm factor is a weekly or monthly indicator that is calculated by dividing the dealer’s total number of subscribers by the number of alarm signals sent to the monitoring center. It is one of the ways monitoring centers determine the health status of installed systems. For example: Once an alarm system is installed, it should not be sending hundreds of signals to the monitoring center per week when there are no emergencies to resolve. Therefore, a high number of signals is most often the result of a bad installation or faulty hardware. It causes the monitoring center to spend more time on the account and uses up significantly more operator time than a healthy system.

What the alarm factor doesn’t tell you

It is important to note that the alarm factor does not tell the whole story; and this is where dealers can get stuck with a high monitoring bill. The alarm factor doesn’t tell you how much operator time was spent on each subscriber. Low priority signals such as low battery or power loss and account management can be handled in more than one way. Dealers who opt to have the monitoring center call after each signal is going to require much more operator time than a dealer who opts into having text notifications sent to subscribers instead. Additionally, dealers who put their own accounts on test require less operator time and can save money by doing so. 

What does this mean for you?

Dealers who put their own accounts on test, opt into having text notifications or Interactive Voice Recordings implemented in place of traditional operator calls can negotiate lower monitoring costs because they require less operator time. But, you may be asking, why doesn’t every company choose to have text notifications and IVR implemented? From our experience, we have seen that it is only because of a “that’s how it’s always been done” mentality. In fact, only 20% of subscribers pick up the phone on low priority signal calls, and if the first contact doesn’t answer, we have to keep calling down the list until someone does.

To put that in perspective, operators wait six rings before hanging up the phone. That takes an average of 33 seconds each. If the dealer asks that we leave a voicemail, it takes an average of 42 seconds. Additionally, subscribers are rarely pleased to receive a call at all hours of the day to learn they have a low battery when any other less-intrusive form of communication would have done the job.

Here are some best practices to make your monitoring more efficient and improve your subscriber experience:

You Can Save Money By:

  • Testing accounts on your own
  • Generating your own reports in Stages
  • Entering your own customer data
  • Following Standard Operating Procedures (SOPs)
  • The more custom operating procedures that are implemented, the further from the best practices you get. It costs more and more money the more you change.

Of course, you don’t HAVE to do any of these things, and you can certainly do one and not another. However, unless you are perfectly satisfied with paying extra to ease the burden on your front office, just know that your negotiating power shrinks the further you stray.

Take advantage of our robust library of industry and AG related news, articles, webinars and other resources available through our resource center to enhance your success.  You will also discover valuable insights and content you can share with your subscribers through your website, newsletters, and emails.

Receive more useful content like this by signing up for our weekly AG Newsletter below: