Study: Video Doorbells Have a 71% Service Attach Rate
Parks Associates recently announced a new white paper, Consumer IoT Product Development: Managing Costs, Optimizing Revenues, which provides companies with a business-planning blueprint to evaluate how a consumer IoT solution will perform across its lifetime. Subscription services, such as video storage and professional monitoring, can be critical for covering ongoing cloud and support costs. Seventy-one percent of video doorbell owners pay a recurring fee for service, which may include alerts/remote monitoring, video storage, and/or professional monitoring. The service attach rate for smart cameras is slightly lower at 66%.
Developed in partnership with Cardinal Peak, the white paper highlights pain points in the product development process, shares strategies for minimizing costs, and identifies primary monetization models in the smart home that can produce value for customers and other ecosystem players.
“Smart home providers employ various strategies to generate value and reach profitability,” said Jennifer Kent, Vice President, Research, Parks Associates. “This involves looking beyond the initial sale to produce long-term revenue streams through subscriptions, cross-selling and upselling, and multi-sided value propositions that leverage the value of the data and benefit multiple stakeholders.”
Beyond revenue generation, the data generated by connected product lines can offer strategic value to the organization. Smart products create an ongoing connection between the brand and the user and so provide a wealth of insight into how customers use the products, who uses the products, and what features are most popular. Learning how users integrate the product with others in the ecosystem can set up strategic partnerships for marketing, bundles, or distribution deals.
“As companies seek long-term value and revenue from smart home devices, they must weigh the advantages and risks associated with their development strategies, and benefits offered by different types of partners,” Kent said. “Each strategic approach offers unique benefits and challenges, and understanding these is critical to building a sustainable business model.”