The smart home, Connected technologies, Lifestyle services: No matter how you slice it, if you can enhance and automate the lives of residential customers, you’ll be in a good place for more business.
With the advent and continuing growth of residential interactive services, electrical contractors may get the feeling that security is not the way to begin the process. However, it’s quite the contrary. While traditional intrusion detection security (alarms and sensors) continue to hover around the 20–22 percent penetration rate, interactive services can increase the use of security systems by residential customers. Why? Because interactive services, the commonly used phrase for features and functions to automate the home, most often start with a security control. From there, manufacturers have made it possible to add features and functionality indicative of interactive services, such as video surveillance, energy management, electronic locks, lighting and other technologies to fit the customer’s lifestyle.
According to John Pirrie, director of marketing for SecureNet Technologies, Lake Mary, Fla., customers have come to expect interactive services, fueled in part by telecommunications and utility companies actively marketing services and piquing customer interest.
Pirrie said some of the most popular interactive services include the ability to remotely arm and disarm security systems using smartphone applications; video surveillance; and locks, lighting and thermostat controls. SecureNet launched its U.S. operations in 2012 with a software platform that manages interactive services and integrates with central station monitoring through a virtual receiver and agnostic gateway connection to the customer’s control. SecureNet’s hardware partner is Resolution Products, Hudson, Wis.
“Security contractors who don’t offer interactive services will be behind the curve,” he said. “They can upsell from their basic security package, increasing recurring monthly revenue [RMR]. From the customer side, homeowners like the idea of having additional, exciting features. They like the fact that they can have security and, yes, can do all these other cool things with their systems, including video to check in on the home or its occupants.”
Dave Mayne, vice president of marketing for Resolution Products, said professionally monitored security system providers are experiencing strong growth in interactive services. Mayne said Resolution Products partners with SecureNet to provide the hardware. Through its Helix wireless solution, Resolution offers new applications and retrofit technology through an interactive gateway module that interfaces with most existing security controls. Helix is a standalone radio frequency identification (RFID) system that provides interactive services through tablets and smartphones that operate as the system control. Mayne calls the technology a gateway to interactive services.
“If you look at the major providers in the security industry, the top 10 companies all lead with interactive services because it drives RMR,” Mayne said. “Adding interactive services also keeps account-creation costs lower. In addition, the more homeowners interact with and use their system, the greater chances of longevity with that customer.”
Changing the paradigm
According to Mayne, the best way to approach selling interactive services is to start with security because it makes the most sense to the customer.
“I don’t think you have to say ‘interactive services,’” Mayne said. “When you put the security in, you show the customer how to use the security and then the ways they can manage their life and their home with the device. The device they’ll use most often is the smartphone to check in and operate controls. Especially with 20- and 30-year-olds, the security system they look for today is something that feels like it’s in the phone. The phone or the tablet or that device in their pocket is the tool that will make everything happen.”
Peter Giacalone, president of Giacalone Associates LLC, New York, said contractors have to look at offering connected gateways or interactive services not as an option but as a culture.
“The technical part is easy,” he said. “The toughest part is marketing and sales because that’s where the paradigm shift occurs. Interactive services means different things to different people, but security is always part of it, a big part or a little part.”
Giacalone said the market for lifestyle services is set to heat up over the next several years. Tremendous growth is expected.
“It’s become nearly hardware-agnostic, and connectivity through smartphones is the golden rule,” he said. “Those contractors who aren’t having success with it most likely are doing something wrong. There’s no reason for it. It’s a different ecosystem, and it’s all married together and plays together. When Comcast first entered the business, they called their service Xfinity Home Security. Then they changed the name to Xfinity Home. It’s all about a gateway to support everything, and you pay for what you want. It’s a residential gateway that ties in video, security, audio, energy management and more all in one place.”
The best way for contractors to position the service is to listen closely to the customer.
“You need to listen,” Giacalone said. “You turn wants into needs. Prospects aren’t going to ask for lighting controls. You need to show them what light modules can do, so they can look at the technology and others and see all the cool stuff they can do with it.”
Greg Blackett, senior product manager for Tyco Security Products, Toronto, agreed that interactive services are becoming mainstream and the more products appeal to a broader lifestyle, the more people will feel compelled to buy them.
“The smart home has grown from a niche segment,” he said. “First it was only purchased by high-end homeowners, but now it’s become mainstream. Interactive services can be an entire solution or a single product, so there’s scale to the technology.”
Blackett said the rise of interactive services has broadened the definition of security and increased use across a diverse customer base. He advised contractors to start with security in their sales efforts.
“Electrical contractors offering security are in a great position,” he said. “If they are familiar with a certain core security platform, there is most likely an extension of that for interactive services, such as a simple app or access to a couple key features. Customers might want to see motion-detection alerts on their phone, for example. It’s not like they have to bring in a totally new solution, but they might want to manage a couple different platforms or apps. They can scale it up from there.”
According to Alan Patterson, director of product marketing for IControl Networks in Austin, Texas, consumers still find security most attractive. As such, it drives mass-market adoption for the smart home.
“Our research indicates 54 percent of U.S. homeowners plan to buy at least one smart-home product in the next year,” Patterson said. “We also found that consumers don’t want fancy products but rather simple devices that significantly improve their quality of life. We believe high-value devices are here to stay, where those without substantial user benefit may not be around long.”
Patterson said customer experience is a key driver of connected home services adoption. Although smart technology is constantly improving, using products can be intimidating at first.
“Contractors should take the time to educate homeowners on the proper usage of smart technology,” he said. “For example, interactive security systems offer the capability to automate multiple functions through a ‘rules’ engine. By taking a few extra minutes during system setup to show the homeowner how to configure rules, the contractor can help the homeowner avoid frustration as well as speed up the learning curve.”
He also advised contractors to steer homeowners toward devices that deliver the most benefit, enhancing the homeowner’s sense of security or delivering cost savings (video cameras, thermostats and lighting control).
Electrical contractors with security and low-voltage divisions are in a great position to sell residential interactive services. Listen to what the prospect says about how they live and what they want to do so you can deliver the right services—but always start with security.