Getting Cozy With Home AutomationDennis Holzer is executive director of PowerHouse Alliance, a national consortium of regional wholesale distributors for the residential and commercial A/V, home entertainment, security, IT and consumer electronics accessories markets. He joins the conversation to delve into trends, challenges and opportunities security dealers are witnessing in the home automation space.
What new business opportunities/revenue streams are now available to security dealers who offer connected devices for the home? The biggest business opportunity and revenue stream that security dealers now have is the ability to add additional devices to a previous customer’s network or to a new customer’s installation. In order to do so with ease, the dealer must future-proof their customer’s system as much as possible and this starts with educating the customer upfront. When a dealer has the first consultation with a customer to find out what they’re interested in having installed, it’s the dealer’s job at that time to also show them the available options that they may want to add in the future.
For example, a customer may ask for a system with only a security keypad, window and door sensors, and they may not want cameras right away. By creating a system that can add-on cameras or other smart devices later on and making sure the customer knows that their system can grow, it allows for new opportunities for dealers down the road. This interaction also establishes a better relationship between the customer and dealer, positioning them as a technology expert.
Asking the customer if they want to pay a little bit more money up front to ensure that their network or system is future-ready is not only beneficial for the dealer, but also the customer. Having the flexibility to add to an existing system means fewer headaches for the dealer down the road, and is also likely to be less expensive for the customer. This also gives the dealer the opportunity to continually follow-up with their customer as new and relevant products are introduced. Keeping the communication open can lead to continued sales. And, the more devices in a system that require monitoring, the more the dealer can make from the added service charges.
Many traditional security dealers are wary of branching into home automation in part over concern for a potential onslaught of service calls and even truck rolls. Legitimate? My response to these dealers is understand the times and technology. Home automation presents a new opportunity, and many new technologies are even making it easier to service customers after the installation without rolling a truck. Cutting the cords is the new trend and actually, it’s much easier to troubleshoot a customer’s system when it is wireless, because dealers can do so without traveling to the customer’s home. I’m also a strong believer in the importance of training the customer when their system has been installed and the job is done. Simple things, like leaving behind a FAQ sheet or troubleshooting guide also helps reduce service calls, concerns and truck rolls.
What are some of the top concerns you hear from traditional security dealers who are reluctant to enter the home automation space? The top concerns that I and the PowerHouse distributor members hear, is the fear of increased service calls as well as a closed-minded attitude towards new and or wireless technologies. Many traditional security dealers are not a fan of wireless security and all of the other categories that go along with it. They want to stick with what they are used to installing because it’s been working for them so far, and are hesitant to invest time into training on new systems and vendors. However, new technologies can be easier to install and beneficial to both the dealer and the customer. PowerHouse Alliance members offer an abundance of training to dealers when they’re ready to venture into new technologies.
Given the rising dangers of connected devices being hacked, what cybersecurity-related advice can you provide security dealers to protect their organizations from data breaches, as well as their end customer’s sensitive information?
I have to be honest in saying that there are no guarantees. You can have the best of intentions and strongest security measures in place and there is still a risk of being hacked. The dangers are there, and the industry is continually working on them. But there is no 100% guarantee that you can avoid being hacked. Dealers can improve security by continuously educating themselves to stay on top of the latest security measures, as well as keeping their customers systems updated with the latest firmware and software.
In your view, can a traditional security dealer continue to thrive by sticking with the same business model that has served them so well through the years? Traditional security dealers need to continually adapt their business models to thrive in the coming years. Because of the easy access to information about the industry, today’s consumer in many cases has already had time to learn about what they want before they talk to their dealer. They have read the reviews and will ask hard questions; they know what they want and most of the time it’s the latest wireless technology and devices, as well as the expansion capabilities.
Labor is significantly increased with wired options vs. wireless, and today’s smarter consumer is much more likely to get multiple estimates until they get what they are looking in terms of solutions, price and product. Quite simply, if the dealer isn’t able to fulfill what the consumer wants, they will go elsewhere.
Is there a particular home controls-related product or service category on the near horizon that you are excited about? There are new categories coming out every day. The home automation category is growing fast and security dealers can leverage this. And, as consumers continue to add devices to their home network, there will be an increased need for stronger home networks. This is becoming more and more apparent, and is a huge market opportunity.
Any other insights or advice for security dealers related to the connected home topic you’d like to share? If security dealers want to continue to increase their business and satisfy current and future customers, they need to offer both wired, wireless and a large mix of supporting products. Understanding the options to offer customers based on their various needs will keep your business relevant and on the increase.