Smith debuts new dealer program
LAS VEGAS--The time is right for a dealer program that helps dealers build equity, Tony Smith said when he kicked off his new "no-hold-back, no-guarantee" dealer account-funding program on April 5 at ISC West.
The new program, Security FirstAlarmGroup, has"taken us more than a couple years to put together because [the financing is not] traditional. We wanted to be able to tell the dealer that we're committed to him for at least five years and that we have the funding in place, and we can do that," Smith said.
No stranger to dealer programs, Smith has been in the industry for 20 years and is the owner of Security Finance Associates. He's designed dealer programs for other companies as well as owned and sold three alarm companies. In the days before Protection One switched its business model, Smith was Protection One's largest master dealer.
Smith touted the "nos" of his program: no dealer guarantee, no dealer reserve, no dealer holdbacks after the second monthly payment, no free service calls, no contract exclusivity, as well as the built-in attrition controls: Customers must have a FICO score of 650 for a guaranteed sales. He also said a customer who defaults on a contract is automatically reported to the credit agency.
With a 650 FICO score, and a $90 connection fee, the customer gets a 48-month monitoring/installment contract with a 0 percent interest rate and a guaranteed monthly renewal rate.
National Monitoring Center of Aliso Viejo, Calif. will provide monitoring. The program will be available to dealers across the country.
Smith said the dealer can "get up to 30 percent of gross monthly revenue from the customer contract," meaning that if the customer's monthly payment is $30, the dealer can get as much as $9 per month on that account. "The key word here is 'gross,'" he said.
"No one gives that kind of revenue [to dealers] and if they did they would take a percentage of the cost out of that revenue," Smith said.
Smith is not releasing who is providing the backing other than to say it's a "Midwest-based finance company that's supported by a consortium of banks."