Shifting the Selling Paradigm

Turning security dealers into home automation dealers

• By Larry Goldman
• Aug 01, 2015

With the increased focus on home automation and associated “smart home” devices, it is incumbent on security dealers, installers and integrators to do more than simply sell security products. In fact, security professionals who realize that security is one of the primary “gateways” in which consumers enter the smart home market have a significant market opportunity to gain new customers, upsell to current customers, and increase recurring monthly revenue (RMR). In addition, it is important to note that:

• Integrated smart homes lower attrition rates.
• Integrated smart homes greatly increase the usage of an installed system.
• Expanding to lifestyle devices increases customer value and retention.

It does, however, require a shift in the selling process. Understanding how to position smart home technology as not merely a convenience, but the foundation of increasing a family’s overall safety and peace of mind is critical.

Home Automation: Big Business

To say that home automation is a rapidly growing business is a vast understatement. Telecom research firm Berg Insight forecasts that worldwide revenues from shipments of home automation systems will grow at a compound annual growth rate (CAGR) of 33 percent from $2.3 billion in 2010 to nearly $9.5 billion in 2015. Further, interest in learning more about home automation is increasing significantly.

According to a report titled “Adoption and Usage of Home Automation Technologies,” 61 percent of online consumers want to learn more, a marked increase from the 37 percent reported in 2013. At the same time, just 17 percent show no interest in learning more about this area, less than half of the 35 percent reported previously. Plus, consumers who are aware of home automation are even more likely to be “very interested” or “interested” in learning more.

Consequently, if you are a security dealer or integrator, there is one question that needs to be asked: how do you get your fair share of the smart home market?

But perhaps, as a security dealer, you are not involved in smart home installations. You focus on what you do best: security systems, locks and monitoring.

You leave the smart home stuff to the large retail stores, the cable companies, service providers, and electronics experts. If so, then you might be making a significant professional mistake.

The fact is the smart home market presents a sizable opportunity for security dealers and integrators. It does require a shift in thinking and approach, but if done correctly—and with ongoing education about the market and its offerings—you should be able to position yourself squarely into the smart home market and its lucrative revenue opportunities.

Security dealers have traditionally sold just that: electronic security. However, by focusing exclusively on the electronic security aspect, security dealers are leaving huge dollars—and a steady stream of new customers—on the table. With increased consumer interest in the home automation market, driven in large part by physical security (automated door locks), dealers have a chance to “reinvent” themselves as sellers of not only security products but entire home automation packages. In doing so, you will accomplish several goals.

• You will increase your recurring monthly revenue (RMR).
• You will increase customer loyalty through satisfaction with multiple high-quality products and added services.
• You will have a chance to offer the kind of personalized service that the service providers and cable companies often do not.

A New Approach to Selling

Now that we have established the fact that there is a great opportunity to sell home automation systems to consumers, the next question is: how do you sell them?

The typical alarm sales consultation seamlessly lends itself to a discussion of the benefits of home automation. At a fundamental level, you provide the customer with control—after all, they are your customers (or soon to be your customers) precisely because they are looking for increased control over their home environment—and home automation is, at its core, a greater and more advanced level of control.

Undoubtedly, the first step is to inform potential customers that you actually offer these kinds of products and services. Within the industry, it is no secret that security dealers have increasingly been expanding to include home automation and control products.

Nevertheless, a large percentage of consumers may still be laboring under the assumption that a security dealer is, well, a security dealer. Consequently, the first step is to inform customers and prospects that you are not just in the security business; you are a company that can fulfill all of their home automation needs. This fact should be highlighted in all of your marketing tools and materials: print and digital advertising, website or newsletter. Positioning yourself as a full-service home automation solution provider begins with you, not the consumer.

If you are conducting an initial consultation with a customer at their home—the opportunity to discuss home automation has already begun. But it is not about selling product, it is about selling solutions to fit their unique, individual lifestyle.

Unlocking the Conversation

Since security is an effective gateway into the home automation arena—and because you are already talking to a customer about home security—electronic door locks can be an effective catalyst for beginning the home automation discussion. Here are a few general tips for selling these smart devices.

• Smart locks represent a new selling proposition. They are no longer just a security sell; they are a “lifestyle” sell.
• Explain keyless entry as a major safety and convenience factor—no worries about lost keys.
• Explain how customized interior scenarios can be set up before the homeowner even enters the home— lights can be turned on and heat/AC can be activated well before the consumer is even in the house, increasing comfort.
• Talk about the potential energy savings—if the homeowner forgets to turn off lights or heat after they leave, it can be done remotely.
• Ask if the homeowner has ever forgotten to lock the door. This becomes a moot point with a smart lock.
• Explain how audit trails “announce” who entered the house and when; this is a significant safety factor.
• Ask about elder residents: smart locks can be the central point for “aging in place” applications.
• Ask about housekeepers and service providers: temporary codes offer access only when necessary, another big convenience and safety factor.

There is a critical factor to remember in the overall selling proposition: as a security professional, you are not just providing physical security. Certainly, in selling smart locks, you are offering the consumer some of the safest and most effective deterrents to intrusion available on the market. Just as important is the peace of mind that the consumer gains from buying and using these products—the “virtual” security, so to speak.

The smart lock makes it significantly more difficult for a criminal to break into a residence; the peace of mind that the homeowner experiences knowing that that their family and valuables are protected cannot be overstated.

Different Products for Different Lifestyles

Let us assume this discussion of smart locks piques your customer’s interest, and they are interested in learning more about the entire range of home automation services and products. The next step is to learn more about the lifestyle of the customer and his/her family. Key questions to ask include:

• General: Overall interests, concerns, and life “patterns.”
• Size of the house: As many dimensions as customer can provide.
• Children: Their ages, comings and goings, specific security concerns you have for them? This can lead to the potential for cameras and/or sensors. (Once the customer is pondering the benefits of front-door surveillance, moving to a discussion of back-door and full-perimeter monitoring is an easy transition. Further facilitating the discussion is the fact that some home control service providers will not charge for monitoring additional cameras once the first camera is in place.)
• Service providers/package deliveries: How many expected visitors (service providers) and unexpected visitors (package deliveries) might come to the house in a week?
• Pets: Number, type, do they have free reign of the house or are they restricted? A pet camera outside the home is also a useful way to overcome the customer’s natural reluctance to camera placement inside the home.
• Doors and openings: which ones are primary means of entry/exit? Secondary?
• Audio/Video Requirements: TV, stereo, all other entertainment equipment.

Increasing RMR

There are various ways in which you can increase RMR through the sale of home automation products. No one solution is right for every business; decide on an RMR solution that best fits your business model that includes additional lifestyle devices but makes it easy to choose for the customer. Some of the methods that work best include:

• Asking customers to pay for all the equipment and have lower monthly fees.
• Subsidizing equipment costs with higher monthly fees.
• Offering preventive maintenance and service contract packages.

Help Is On the Way

No matter how much you, as a security professional, learn about home automation— and no matter how well you modify your selling approach—there is no way to know everything. The smart home market is changing at an astounding pace, and keeping up with it is a prodigious task.

The key is to partner with smart home manufacturers and distributors who can become true partners—that is, educational resources that you can contact on a regular basis with questions or concerns about the industry. Plus, you will want to associate with companies that can provide ongoing training in a wide variety of smart home topics, even if those topics are not specifically related to the company’s core product.

Companies such as Kwikset provide a wealth of information on their web site to help security professionals navigate the sometimes confusing smart home waters. In addition, Kwikset provides ongoing professional training and education at trade shows as well as other locations.

This article originally appeared in the August 2015 issue of Security Today.