Welcome to Scribd. Sign in or start your free trial to enjoy unlimited e-books, audiobooks & documents.Find out more
Download
Standard view
Full view
of .
Look up keyword
Like this
6Activity
0 of .
Results for:
No results containing your search query
P. 1
Attrition Calculation

Attrition Calculation

Ratings: (0)|Views: 380|Likes:
Published by aarif

More info:

Published by: aarif on Nov 03, 2009
Copyright:Attribution Non-commercial

Availability:

Read on Scribd mobile: iPhone, iPad and Android.
download as PDF, TXT or read online from Scribd
See more
See less

06/14/2010

pdf

text

original

 
ATTRITIONSEEKING A CONSENSUS
BY:TRG ASSOCIATES, INC.4 POST OFFICE SQUARECLINTON, CT 06413JOHN M. BRADYJAMES LEESE
 
 
INTRODUCTIONMEASURING ATTRITIONWHAT IS ATTRITION?ALTERNATIVES TO MEASURING ATTRITIONTHE ATTRITION CALCULATION OF CHOICETHE COST OF ATTRITIONWHAT ATTRITION MEASUREMENTS CAN TELL YOUABOUT A BUSINESSTRACKING ATTRITION CAUSESATTRITION CASE STUDYCONSENSUS AND ATTRITION MANAGEMENT
 
 1
INTRODUCTION
The electronic security industry continues to prosper because of the increasing value that people place on the protection of their loved ones and their personal/business assets. Theindustry also continues to attract significant investment capital, management expertiseand debt liquidity due to the healthy economic returns that can be created within a liquidmarket for a predictable cash flow margin enterprise – whose root dynamic is preservation of the customer, the customer’s property and the customer’s peace of mindthrough timely provision of services.The other important characteristic of the electronic security industry is that its growth isoften fueled by making an investment in every new customer added. While the “zero or low down, high volume” methods of marketing to increase market penetration hadtransformed the industry in the early to mid 1990’s, the return to sounder “customer valuemarketing” and the reduction of the “excessive” investment once considered “the onlyway to grow”, has helped to reduce the necessary investment needed to remaincompetitive in the marketplace. Despite that recent reversal, we still utilize financialincentives (leasing, customer transfer/takeover, up-sell/high volume) to attract customers.That investment or “Cost to Create a Customer” can range on average (2000-2001activity) between a 15 to 31 multiple of recurring monthly revenue (RMR). Whilemarket values of RMR have decreased since the “altitude ranges” of 48 to 60 times RMR in the late 1990’s, they have settled (despite the downward pressure by the most efficient,well financed buyers) into the 30’s to mid 40’s – a range similar to the late 1980’s whenthe industry also had a similar 12,000 to 13,000 dealer participants as it has today.The “ease of entry” that the electronic security industry is still characterized by, despiteever increasing licensing and continuing education requirements, continues to work against the normal industry maturity trend of settling in excess of 50% of the marketplacewithin a single digit number of companies. Customer retention continues to be the singlelargest management challenge inside a fluid, competitive environment for customers and between alternative providers.Management’s priority is to minimize the investment in customer growth. Some havecommented that it is “easy to give security systems away for nothing” but all gooddealers agree that it takes an enormous amount of “blocking and tackling” to keep eachcustomer after any sale. So much management effort and organizational focus goes intogrowing each dealer’s customer base while often so little effort or organizational focusgoes into keeping those “precious assets”.Since the late 1980’s, when the electronic security industry began to attract significantnew equity/debt capital, the industry has continued to improve at gathering andcataloguing industry specific performance parameters – with the SDM 100 and other  public/private information sources beginning to keep track of market size, growthdynamics, etc. Despite this new security information age, one continuing enigma of 

Activity (6)

You've already reviewed this. Edit your review.
1 thousand reads
1 hundred reads
Cezar Dumitriu liked this
anielp liked this
realguy123 liked this
monasorour liked this

You're Reading a Free Preview

Download
scribd
/*********** DO NOT ALTER ANYTHING BELOW THIS LINE ! ************/ var s_code=s.t();if(s_code)document.write(s_code)//-->