ADT 2015 Annual Report Download - page 80

FORM 10-K
for the services they provide in generating qualified monitored accounts. In those instances when we reject an
account, we generally still provide monitoring services for that account by means of a monitoring services
agreement with the authorized dealer. Like our direct sales contracts, dealer generated customer contracts
typically have an initial term of three years (two years in California) with automatic renewals for successive 30-
day periods unless canceled by either party. If an accepted security services account is canceled during the
charge-back period, generally twelve to fifteen months, the dealer is required to provide an account with
equivalent economic characteristics or to refund our payment for their services for generating the account.
Additions to our customer base typically require an upfront investment, consisting primarily of direct
materials and labor to install the security and home/business automation systems, direct and indirect sales costs,
marketing costs and administrative costs related to installation activities. The economics of our installation
business varies slightly depending on the customer acquisition channel. We operate our business with the goal of
retaining customers for long periods of time in order to recoup our initial investment in new customers, generally
achieving cash flow break-even in approximately three years.
Field Operations
We serve our customer base from approximately 180 sales and service offices located throughout the United
States and Canada. From these locations, our staff of approximately 4,600 installation and service technicians
provides monitored security and home/business automation system installations and field service and repair. We
staff our field offices to efficiently and effectively make sales calls, install systems and provide service support
based on customer needs and our evaluation of growth opportunities in each market and utilize third party
subcontract labor when appropriate. We maintain the relevant and necessary licenses related to the provision of
installation and security and related services in the jurisdictions in which we operate.
Monitoring Facilities and Support Services
We operate ten redundant monitoring facilities located across the United States and Canada. We employ
approximately 4,000 monitoring center customer care professionals who are required to complete extensive
initial training and receive ongoing training and coaching. Most of our monitoring facilities are listed by
Underwriters Laboratories, Inc. (“U.L.”) as protective signaling services stations. To obtain and maintain a U.L.
listing, a security system monitoring center must be located in a building meeting U.L.’s structural requirements,
have back-up computer and power systems and meet U.L. specifications for staffing and standard operating
procedures. Many jurisdictions have laws requiring that security systems for certain buildings be monitored by
U.L. listed facilities. In addition, a U.L. listing is required by insurers of certain customers as a condition of
insurance coverage. In the event of an emergency at one of our monitoring facilities (e.g., fire, tornado, major
interruption in telephone or computer service or any other event affecting the functionality of the facility), all
monitoring operations can be automatically transferred to another monitoring facility. All of our monitoring
facilities operate 24 hours a day on a year-round basis.
Customer Care
We maintain a service culture aimed at “Creating Customers for Life” because developing customer loyalty
and continually increasing customer tenure is an important value driver for our business. To maintain our high
standard of customer service, we provide ongoing high quality training to call center and field employees and to
dealer personnel. We also continually measure and monitor key operating and financial metrics, including
customer satisfaction oriented metrics across each customer touch point.
Customer care specialists answer non-emergency inquiries regarding service, billing, alarm testing and
support. Our monitoring centers provide customers with telephone and Internet coverage 24 hours a day on a
year-round basis. To ensure that technical service requests are handled promptly and professionally, all requests
are routed through our customer contact centers. Customer care specialists help customers resolve minor service
6