Alarm Debt Group gains clients as growth relocates firm
DALLAS--The demand for debt collection services has increased so much that Alarm Debt Liquidation Group nearly doubled its clientele and moved to larger offices in July, the second relocation for the company in one year.
ADLG, a division of Anderson, Crenshaw & Associates, now occupies an 8,250-square-foot office that is approximately 25 percent larger than the previous one.
The company's sales staff continues to occupy the former office on the other side of Dallas, while renovations on the new locale are completed.
ADLG's client roster includes 1,100 independent dealers and dealer programs, up from 600 clients in March 2004.
"The ugly is that everyone has attrition," said Michael Harrison, director of sales for the agency. "Every dealer has a common thread that is a delinquent customer."
Harrison said a common problem is when dealers forget about old accounts and stop collecting the monthly monitoring bills.
"Some dealers that have delinquent accounts don't even know that they can have a revenue stream," he said.
"It's a good time for those accounts to be taken out of their file drawer," Harrison said.
One practice that led to many delinquent accounts was the free alarm offer that was popular in the mass marketing age of the 1990s.
In the past, dealers offered systems at no cost with the only obligation being to pay monthly monitoring fees.
That marketing technique lost its popularity because of high attrition rates.
To curb this, some dealers have increased their pricing which, Harrison noted, results in lower attrition for the dealer. This brings in paying customers who value the service.
As the cost of alarm system installation increases, coupled with discounted insurance programs and the need for added security, more and more alarm systems are being installed into the residential market.
It is residential accounts that continue to accumulate the most debt.
"Many people move within a three-year time frame and do not transfer service, which causes the account to become delinquent," he said.
Customers stop paying a monitoring fee for a variety of reasons, whether it's influenced by the economy, or not.
"Like any monthly bill, sometimes the $30 monitoring fee gets forgotten about," Harrison explained.
To promote a better understanding of its activities, Alarm Debt Liquidation Group works closely with industry associations to educate dealers on the collection process.
The agency is counting on the discussion to help its customers to reduce independent and dealer-program debt.
Anderson, Crenshaw & Associates, a collection agency company, formed the firm in October 2002, after seeing an opportunity in the alarm debt sector.
"Our business model has always been to work with a particular sector and actively blend with its way of life," Harrison said.