Verizon insists that you sign a contract for that new fleet dash cam system. In fact, they like contracts so much, they’ll make you sign a new one for every dash cam that you add going forward. That means that given natural business growth over time, you’ll end up with a plethora of Verizon contracts for your company, each starting and ending at a different time. What if you’re not happy?
Getting divorced from your spouse would be a walk in the park compared to getting away from a Verizon Connect contract. First, you would need to get a divorce just to move out of the house. But, then you’d still have to eat at home every night, do your laundry there, pay the mortgage and buy the groceries, etc. A few months later, you’d be able get a second divorce that lets you eat somewhere else, and so it goes…. A few more divorces and you’ll still be paying alimony, but at least you’d be on your own. According to online reviews, Verizon has an automatic renewal clause in their contract and a 60 day written cancellation policy, so if you miss that window, you’re getting married again, like it or not. It reminds us of these finance companies that give you 12 months interest free payments, like when you buy something at Best Buy or Home Depot. Except that if you don’t pay the entire balance at the end of the contract, by a specific date, they’ll smack you with the whole year’s worth of interest charges anyway. Rather than relying on how happy you are, they seem to be counting on your forgetfulness to lengthen the relationship.
Here is what one of their customers, CEO Robin M had to say about the Verizon Connect Autorenewal Sham (his words)
“We had been with Fleetmatics/Verizon Connect for 12 years. We rec’d little support though a couple of years back, a sales rep called to have us sign a new contract with an annual autorenewal. This November we were researching Fleet tracking options and called F/VC to find out when our contract was up. We were told at the end of January so mid-December, we reached out to them to tell them that we weren’t going to renew (we found another provider with more services and lower prices) and asked what we needed to do. The man who introduced himself as our “Customer Success Partner” told me that our contract requires 60 days notification so we were stuck through Jan 2020. I explained that we hadn’t been informed that when we called. He sent me a copy of the contract and told me “too bad” that my company should understand who it is doing business with. He said in no uncertain terms we were locked in through Jan 2020. I asked to speak to his manager but was told she was out of the office but well aware so if I called her the next day, I wouldn’t have any better success.”
Upon doing a quick Google search for “Verizon Connect Contract”, I landed on this web page, which clearly showed the terms and sure enough, there is the sneaky auto renewal clause: “On or before the day that is sixty (60) days before the last day of the Subscription Term, Customer may decrease the number of subscriptions below the initial quantity of subscriptions purchased on the initial Order Form, (the “Minimum”) by providing Verizon Connect with written notice to Accountmanagement@verizon.com”
Ever wonder why Verizon likes contracts so much? Are they afraid that after you get married, you’ll find out how sloppy they are at the dinner table or that they saw logs in their sleep all night long? Maybe it’s just in their heritage because before Verizon acquired Fleetmatics 6 years ago, they were just as relentlessly focused on taking you to the altar. As noted in this blog 9 years ago, “The Truth About GPS Tracking Contracts” even after one of their customers honored their 3 year contract term and “officially” became the owner of the telematics hardware they had financed on that contract, Fleetmatics refused to let them use that hardware with any other provider. The hardware was useless, even though they paid 3 times what we charged for the identical GPS tracking devices. So, I guess it’s part of their DNA now.
As we pointed out then and as rings equally true today, Verizon’s Telematics division and many other large telematics companies want you in a contract so they can count the entire value of that contract up front. It’s all about the numbers. Of course, it doesn’t hurt them that it also prevents you from going anywhere else.
So, what do you get out of it? Are you getting some sort of killer deal for signing a 2 or 3 year airtight agreement? Not likely and in fact, the bigger the company, the more likely it is that you’re also over-paying for their services. These big companies don’t exactly have a low cost of selling. Try typing “fleet dash cam” into Google and dollars to doughnuts you’ll find Verizon Connect in the top paid search spots on Google. You’ll find them right alongside the usual suspects, Samsara, Fleet Complete, KeepTruckin and the like. These companies pay thousands every month to maintain those top Google positions and guess who’s paying for it?
Ever try to search on-line for the pricing of the dashcam solutions these companies offer? Try going online to Verizon Connect or Samsara or Lytx or Fleet Complete and try to find their pricing. It’s all hidden like it’s some big secret. They almost want a contract before they will even quote you a price for their product! You have to jump through all these hoops just to get a quote and you know that if you fill out their online quote request form, you’re not going to get a quote at all. You’re going to be bugged to death by an inside sales rep to attend a web meeting and you’ll find out that he doesn’t even know the product that well. He’s going to run you through his sales deck, then as soon as you ask a tough question, here comes another web meeting with another salesperson another level up.
After a couple of meetings and a lot of your time, you’ll finally get a quote. You’ll also find out that you can’t go to the bathroom without a contract. It makes you wonder, if you have to do all this homework and put up with their sales teams trying to beat you into buying their system, what’s it going to be like to get out of the contract? The whole thing is kind of strange when you think about it because if you were looking any other business software, such as an accounting system like QuickBooks, a quoting system like Quoter or a CRM system such as SalesForce or almost any other cloud-based business software on the planet, all the pricing is online, right on their respective websites.
Modern software companies don’t need a contract either. Want to leave? Be our guest! The software market puts the emphasis on giving you the features you need, creating product differentiation and so on. They don’t need to trap you into being a long term customer…
So, why the big difference? Why do large telematics companies have to nail you to the cross when software companies simply rely on the ROI they provide on an ongong basis? Good question. In 22 years in business, we’ve never made a customer sign a telematics contract. A telematics solution is primarily cloud-based software, just like that CRM or accounting product. So, why the contract? Maybe it’s because of their history, which always had leverage over any customer. The telephone company always had the power to pull the plug on your business. Ever try running a business without a business phone line? The telephone companies (telcos) of yesterday are the wireless carriers of today. They have the power to enforce and collect on a contract – because they are the phone company! They can also screw up your business credit rating in one mouse click. Who else, besides the phone company and other utilities can get away with charging you 18% per annum on a late payment?
Can you imagine if we tried to charge you a late fee or collect on contract cancellation fees. Haha, LOL, good luck with that. Our customers would just laugh. So, I guess maybe that’s why we don’t have contracts. Because we can’t enforce them anyway. We’re not the phone company. I guess that leaves us with having to earn your business every month….
Verizon and other contract-happy telematics companies often internally subsidize part of the fleet dash cam hardware costs to make the initial capital outlay look cheaper. They make up for it by increasing the monthly costs and as those tend to go on forever, they end up making much more money in the process. For example, let’s do a little visionary marketing exercise to show how this works. Let’s say that you want to buy 50 dash cams and we’ll compare how a large telematics company might price those as compared to how we would price those same cameras.
Let’s assume our raw cost on a fleet dash cam is $180.00. A normal markup for this would be about 30%, giving it a retail price of say, $259.00. So, we would sell you those for $259.00 each, then charge a monthly fee for the services, which includes wireless data, live tracking, live video, etc -let’s say that’s $25 per vehicle, per month. So, as a customer, you would pay the hardware cost up front and the only ongoing cost would be the $25 per vehicle, monthly. No contract would be required. You could leave next month without penalty. If you took 5 trucks out of service for the winter, you could suspend the monthly fees on those trucks with just a phone call. Then, put them back on-line anytime with another phone call.
Alternatively, if you wanted to minimize your capital outlay, we could bring in our hardware leasing partner and you could lease 50 of these dash cams for your fleet. The total lease amount would be $259.00 x 50 = $12950.00, which would come out to about $440.00 on a 3 year lease, or $8.80 each per month for 36 months. After 36 payments, you would own that hardware. Your monthly payment would be $1250 for the services ($25 each) plus the hardware lease = $440, for a total payment of $1690. After 3 years, your total payment would drop back to $1250. Even though you decided to lease the hardware, you could still suspend some of the vehicles in the off season if you wanted. Let’s say you were happy with the system and you kept it for 5 years. Using a 4% annual discount rate, the Net Present Value of your total expenditure over the 5 years would be $14,903.14 for hardware + $67,873.84 services = $82,776.98.
Now, let’s see how a large telematics company might position that package. They would probably tell you that the cameras were worth $299.00 each. Seems reasonable -no one is going to argue that. But, if you sign a 3 year contract at $39.99 each, the camera is free. Sounds like a great deal. Zero capital outlay. They are the phone company so they know they can hunt you down to make you honor that agreement. This allows them to internally finance the hardware. Based on this, the NPV over 5 years comes out to $108,570.99, so they pick up an extra $25,000.00 and you don’t even bat an eye over it. Do you see how easy this was for them? They are a big company, so you trust them. You don’t have to pay a cent up front, so the whole thing seems very simple.
Ok, so you invested so much time in this and you just want to get on with it, so you relent and sign the contract. Now what? Well, for one thing, you just lost all the leverage you ever had. You’re dealing with the phone company now. Welcome to phone tree and voicemail hell!
Ever look at the reviews for these big telematics companies: ?
Jason B says “Lots of glitches and the web interface is constantly down. We see lots of lags in reporting as well.”
Kristoffer Z says “ Other services provide more features for half the price and they also have easier contract requirements when adding new trucks to the system.”
Becky L says “Verizon is too big to care.. the errors it had, it could never be corrected, the customer service was non existent, the software is good but the company sucks so bad I cancelled.”
Tammy F says: “Support is very non responsive. We are being charged for more vehicles than we actually have and can get no results. Too expensive for the functionality and the results we get. Contracts are too long – I have come to conclude that companies that make you sign long contracts do so because they know they will give you bad service.”
Caity M says “Overall it has been very frustrating to work with VerizonConnect. They seem to have no urgency when it comes to fixing issues and complaints/concerns from their customers. They tend to not respond to emails and do not value communication with the customer. It has become very obvious that they do not communicate internally between their various departments. It feels as if each of their departments are completely separate companies that don’t get on the same page with one another. Maybe this review will finally get someone to respond to our emails. It has been over a month of us not being able to pay our initial invoice because they have not gotten us the proper documentation we need in order to pay. Out billing department consistently has tried to reach out to them to get this information and to connect with they billing department but nobody has responded to any of the requests. I wouldn’t be surprised if they now charge us a late fee even though we have been actively trying to pay.”
So, you’re wondering where is your dash cam order and when is the install?
You try calling your sales rep. Which one? You had 3. How about Larry? Oh, he’s on lunch. “How about John?” Sorry, he’s on vacation. “Ok, I’ll talk to that first guy, what was his name -oh yeah, Matt” – hmmm sorry, -he’s on matt leave!
“Ok, can you please connect me with support.”
“Hello, this is Verizon Support, please hold for the next available agent”. …Music… “Our call volume is excessively high today, Please remain on the line… estimated time is 43 minutes….”
Ok, so let’s summarize this briefly:
You’re looking for a cookie-cutter dash cam solution that is one size fits all and if possible, you’d like to overpay for it and put it on a long term agreement that is impossible to get out of, unless you pay out the entire balance over the life of the agreement and remember to serve formal notice via courier 60 days in advance.
You’d prefer to deal with a different sales rep each time you call and you don’t mind being on hold for long periods of time.
If you need support, you don’t mind navigating phone trees and 3 layers of tech support.
Sorry, we can’t help you. You’ll need to go to Verizon!