The Chicken is in many ways "the best" business model type.
In the Chicken model, each customer is an annuity. He is a source of revenue now and in the future.
While this revenue stream is stable and predictable, there are a couple of downsides to note:
Growth is constrained. Satisfying current customers (proven annuities) takes priority over adding new ones.
Process innovations and change are often resisted. Maintaining process consistency, and hence fulfillment of promises made to existing customers, takes precedence over potentially risky internal modifications.
Automatic Data Processing (NYSE: ADP) provides payroll and tax filing services to over 585,000 customers.
Brinks Home Security (NYSE: CFL) installs and monitors home security systems. The firm has over one million commercial and residential customers.
American Medical Alert (NASDAQ: AMAC) provides remote patient monitoring systems to both individuals and organizations.
Brinks Home Security has been spun off from its former parent and is now a publicly traded entity. (It's now called Broadview.) Its 10K filings will be interesting to watch. As management turns to rebranding the new firm, a task usually done by Locusts, will the company lose its focus on the all-important Chicken customers?
To improve your mastery of the types of business models: Chickens and Pigs - The Book
