How much does an unhappy customer cost?

Good question. You can't go around giving unreasonable refunds to everyone that asks or you might go out of business right? What about customers that have a reasonable point and is not even through a full year of service....well you could be reasonable in return or you could try force your position on them.

It definitely would be more cost effective for me to just roll over, pay the money and get on with doing other things. BUT at some point you have to stand up for what is right and let other people know how they will be treated. Future home security customers can make their own judgment if they want to do business with Lloyd Security or not.

Would you do business with a company that treats you this way?

Here is a review of trying to cancel a home security service from Lloyd Security of Minneapolis, MN. http://www.lloydsecurity.com/

60 day notice to cancel, invoice mailed 35 days before

How bad does a company need a customer if they require 60 days written notice of cancellation and mail an invoice 35 days before the contract renews? You pay for the service once a year. If you are going to cancel the service, does it seem reasonable to get proper notice?

It says in the contract that 60 days written notice is required for cancellation or the service automatically renews, do you put that on the invoice? Or are you worried that people would cancel? No notice of cancellation requirements on invoice. No notice of automatic renewal on invoice.

When is 35 days not 35 days? Thanksgiving Holiday anyone?

After bringing up the point to Lloyd Security that the invoice was sent on November 26th and our contract says that we need to give notice on November 2nd, they now say that new contracts have a 30 day cancellation period. Great, were the new contracts sent for review, doubt it.

So you got 35 days to give 30 days written notice, stop your whining, live up to the contract you say. Interesting, but checking last years calendar, Thanksgiving was on November 27th, sorry no mail.

Most people are on Holiday on Friday the 28th. My guess is Lloyd's office was not open for business. Giving Lloyd the benefit of the doubt on mailing, the invoice went out on the 26th arrived on a Holiday weekend either the 28th or 29th. So a customer may have opened it on the Holiday weekend. To meet the legal requirement of the contract the written notice would need to be in their office on Tuesday, December 2nd. So write your cancellation notice and get it in the mail on December 1st or you get another year of service whether you want it or not.

This is the normal procedure!?

When does our contract really renew? Dec 1 or Jan 1, hmmmm

So the glorious fine print of the contract has been pointed out me. The area of interest is section 9. Duration. Retype here for your pleasure:

9. DURATION, The initial term of this Agreement shall be for an irrevocable three year term starting on the first day of the month during which the Equipment is installed and activated by the COMPANY. Thereafter, this Agreement will automatically continue for successive one-year renewal terms unless Customer or the COMPANY give written notice of cancellation of least 60 days before the initial or the then curent renewal term ends.

OK, contract started on Dec 12th, 2005, so the first three years are up. So when did the contract start for renewal purposes? The equipment was installed in September, 2005 or earlier. Monitoring service started on December 12th according to my records. That means the contract started on December 1st for renewal purposes, since that is the first day of the month when the contact was started.

So we got our renewal notice on a Holiday weekend 6 days before the new service term was to start and 54 days after we needed to give written notice.

This is getting uglier by the post.

When do you contact a "customer" for overdue payment?

If your business model relies on questionable renewal policies to keep customer "buying" your service, how long do you wait to contact a "customer" who has not paid their invoice?

A normal company would contact a customer with an invoice 30 days past due, 60 at worst.

How about Lloyd's? 2 months? 3, 4, 5 months? No the correct answer is 6 months. Why wait 6 months? Maybe it was an honest mistake. Maybe they want to wait until the service, delivered unknowingly to the customer, has be "provided" for 6 months, so it is more difficult to cancel the full year.

So how much does a dissatified customer cost?

Not too long ago an unhappy customer might tell all their friends not to use a certain company. If it was really bad, the friends might tell some others. The reach of these personal un-referrals was not very big. In reality companies could do what was in their best interest, even their short term best interest, without too much to worry about.

It is different now. Online reputation management is an important part of any business today. Just look at United Airlines and how they managed this incident.

Companies run the risk of having every potential customer reading about dissatisfied customers. What is the cost of having this information widely available? If Lloyds looses one customer because of this information, they are upside down on the deal and it will only get worse.

It won't take very much effort for these blog posts to come up anytime someone Googles "Lloyds Security" or "Lloyds Security Minneapolis". What will a customer think that reads this info? Hard to know, but it is safe to say that they will probably do another search for "home security minneapolis" to find another company.

Reasonable proposal now now off the table.

Before taking the time to put all of this info online, I offered what I thought was a fair proposal that addressed the different desires of each side.

Of course one could make the point that the contract states 60 days written notice, be an adult and pay up. Fair point.

One can also see that the "renewal" process was far from transparent for customers, if not down right voiding the contract.

So my proposal was to pay for the services received to date, pro-rated. Hell, I would have even paid for all of July.

The reply back to this proposal was..."The bottom line is that we are going to honor the contract, as it was agreed upon, by you at the time of the installation."

So payment in full for the year of 2009 is their request.

Well my request is full cancellation of the contract as of January 1, 2009. No payments due, relationship terminated.

If this is how you treat customers...ugh.