Why you need the Exculpatory Clause

There is a reason the exculpatory clause is in every alarm contract. The right to contract away liability for your own negligence is recognized and enforced in all jurisdictions and has a firm public policy basis. Educating yourself and your subscribers (their lawyers and insurance brokers too) is essential for conducting the most important aspect of your business — selling RMR contracts.

The exculpatory clause is not the only protective provision in a properly drafted alarm contract, but one of several that convey the relationship of alarm company and subscriber, at least from the alarm company's perspective. The inherent conflict between the two is the alarm company intends the system to be a deterrent and the subscriber sees it as a preventative measure. Thus, when there is a loss the alarm company shrugs and the subscriber (more often it's the insurance company) points a finger and seeks compensation.

The exculpatory clause is not some obscure item buried in the alarm contract. If it is, it's not likely to be enforced. So keep it simple and clear. More importantly for your own edification, don't be shy about the exculpatory clause or ambiguous in its meaning when clarification is sought or challenged by the subscriber, counsel or anyone else.

Especially in conjunction with other protective provisions, the clause makes it crystal clear that the alarm company is not the subscriber's insurer, the alarm system is not intended to prevent loss, the alarm company will not be responsible for loss, and the subscriber, not the alarm company, should insure against loss. It also defends the alarm company if anyone else should make a claim due to a loss the alarm system was installed to detect.

So rather than shy away from or be embarrassed by the terms of your alarm contract, embrace those provisions and explain to your subscriber why they are in the contract. Further, point out that since the subscriber has read and recognized the contract provisions; the pact has obviously succeeded in its purpose of clearly explaining the alarm company-subscriber relationship and the allocation of risk for loss.

This story appeared in the October 2011 issue of Security Sales Magazine, page 100.

Be afraid of the appliance guys…

A lot of Custom electronics dealers already have kitchen appliances in their show room, but the appliances are taking up space. Why not sell them? If you don’t see the connection yet, you will soon because one day major appliances will be smart and currently customer electronics dealers are the only ones who can connect them to a home automation system or smart grid. Unless you’re Best Buy, which now has Magnolia, Geek Squad and the high end appliance shop Pacific sales all under one roof.

Put that together with the smart grid and smart appliances and they are going to be leaders. Smart appliances and the smart grid have been slow in coming despite years of “just-around-the-corner” speak. But wouldn’t hurt for custom electronics dealers to get a jump start on the category before the appliance vendors figure it out and eat our lunch.

This story appeared in the October 2011 issue of CE Pro Magazine, page 10.

Four Keys to Building RMR

Building RMR takes organizational commitment and execution of a long-term plan. There are no get-rich-quick programs in recurring revenue growth because a service business required significant initial investments that gradually show results over a period of years.

1. A realistic self-assessment. Look in the mirror and see what your company is really about. Wo is your customer? What do they want? Do you have the right people in place to sell service rather than technology? Are you willing to make the initial investment and then stick to a plan?

2. A five-year RMR business plan. Having a five-year plan will help you maintain focus on your goal. In year one you will be making investments and climbing the learning curve for selling and delivering services. In years two and three you will perfect your training, market focus and service levels. In years four and five you begin driving real revenue and prepare to evaluate growth strategies to pursue in the next five years.

3. Strong partners. Once you know what you want to sell its time to look for partners. As with evaluating any vendor, look for a successful track record and companies that derive most of their revenue from RMR. These suppliers need to be just as invested in your RMR as you are because you can’t base long-term customer relationships on short-term supplier relationships.

4. Discipline of focus. Wanting to be in the RMR business will not lead to overnight success. T will take continual effort, focus and discipline. There is a reason RMR companies are valued at high multiples: selling services and attaining on-going respect from your customers is hard work. There are no shortcuts to building value-based relationships with your customers but RMR is the outcome of this obtainable proposition.

This story appeared in the October 2011 issue of Security Products, page 10.

It's not all fun and games...

Stepping between a bucked bull rider and an 1,800-pound beast requires courage and super-speedy reflexes. Dusty Tuckness has both, which helped him become the Pro Rodeo Cowboy Association's 2010 bullfighter of the year.

1. NEVER TRUST A BULL. "Our job is to save the cowboys. The stakes are high; a bull can wipe us out at any moment. So I approach every animal like he's the baddest bull I'll ever face. At the same time, I'm also confident in my own abilities and know that I can outmaneuver them all."

2. IT'S LIKE FOOTBALL BUT WITH A BIGGER, MEANER OPPONENT. "I played high school football and was good enough to play in college. I ended up choosing the rodeo instead, but a lot of the same conditioning and footwork from football still applies, such as the cuts I made as a running back. I still have an opponent to beat, after all -- even if he does weigh about 1,500 pounds more than a linebacker."

3. MAINTAIN YOUR COMPOSURE. "Nothing is more important than being calm. A lot of guys worry about what could happen and start to get hesitant, and then all of a sudden something awful happens. By the time stuff starts going through my mind, I'm usually beneath the bull and it's too late to think."

4. INJURIES COME WITH THE JOB. "If I keep a cowboy from getting hooked, I'll dang sure get hooked instead. And I've been hooked in some weird places. I've broken my ankles, ribs, hands, fingers and even my big toe. The worst was when I got knocked out after a blow to the jaw. In general, though, I'm always going for the bull's head. Having him be able to see me and feel me is how I protect myself."

5. THIS IS NO CLOWN SUIT. "I wear knee braces and bullfighting shorts to prevent injuries. The shorts have pads on the thighs, hips and tailbone, sort of like a football girdle. I'll still feel it when a bull hits me, but it absorbs some of the shock. My head is the one part of my body I keep away from the bull. Everything else I'll let get beat up."

6. ENJOY THE ADVENTURE OF IT ALL. "I love jumping over a charging bull. That's just me; the meaner the bull, the more fun I have. People don't usually understand that attraction, but I love doing what I do every day. This is my career. Thankfully, it's fun."

This story appeared in the Oct. 17 issue of ESPN The Magazine, page 38.