Scott Harkins, president of Honeywell Security Products for the Americas, explained during his introduction at the 2012 First Alert Professional dealer convention in Hollywood, Fla., how the event — which attracts several hundred dealer partners and staff from across the nation — was nearly derailed due to Hurricane Sandy.
As the storm began to ravage the Northeast just prior to convention’s opening on Nov. 1, Harkins had to seriously consider canceling the event. Not known were how many Northeast dealers were contending with personal hardship and unable to travel, as well as others who may be affected by transportation disruptions. Many of Honeywell’s own employees could not make it to Florida to work the event. A final determination had to be made whether or not to proceed. And so Harkins gathered his team on a Wednesday morning and they began phoning registered attendees one by one.
“When we called companies on Long Island they said, ‘We are going to find a way to get there.’ The common comment we got back was, ‘Hell yes, we are coming,’” Harkins said.
Roughly 30% of registrants from 165 companies could not make the trip, although attendees continued to trickle in throughout the four-day convention held at the beachfront Westin Diplomat Resort. Following a moment of silence to acknowledge the pain and destruction caused by the super storm, Harkins officially kicked off the proceedings to the opening general session.
Harkins introduced Marek Robinson, who was recently promoted to president of authorized dealer groups, including the Honeywell Commercial Security Systems (CSS) dealer program. Robinson congratulated the audience of dealers for having a “phenomenal year” and recognized them as “one of our premiere growth engines within the organization.” Collectively, he said First Alert dealers have grown almost 13% year over year while several companies are experiencing considerably higher growth rates.
Much of the convention’s focus, including the educational sessions, was centered on providing new technologies and services that meet consumers’ growing appetite to be connected to their homes, as well as fending off new entrants such as Comcast, AT&T and others.
Four dealers made brief presentations during the general session to discuss, in part, their company’s transition to implement new interactive services and technologies such as Honeywell’s Total Connect offering. What was made clear is dealers are contending with altering their business models and operations to not only protect their flank but win a new generation of customers. For instance, Jim Callahan, president of Atlanta-based Ackerman Security, explained his firm elected to provide Total Connect for free to all of its sales consultants for use in their own homes, along with smartphones and other Web-enabled mobile devices.
“The theory is real simple. If they have it at home and they are using it themselves, clearly they will be more inclined to talk about it. Not just on sales calls, but think about other social settings they are in such as at a ball game, cocktail parties, a friend’s house or what have you,” Callahan explained. “It just becomes a natural part of the conversation and to show people the cool things they have on their smartphones. The next thing you know you have interested parties and leads being developed. We find a lot of leads are generated in social settings. We encourage sales consultants to show [the Total Connect demo] to everybody. Whether they purchase it or not, they are now alerted to the fact we have it.”
Harkins eventually returned to the stage to discuss consumer trends and Honeywell’s belief that the residential security space is poised to finally break from its traditional 20% penetration and rise to upward of 40% penetration.
“All we have to do is look around at what is going on in the world. There are new competitors to compete against every day. Nontraditional players are coming after this space,” he said. “We have to ask ourselves why. It leads back to technology trends with the advent of large-scale deployment of broadband and smartphones. They see an opportunity to drive additional RMR in a much broader space than we have traditionally played in. Some of these new competitors are spending a lot of money on advertising in our marketplaces. That is a great opportunity for us.”
The challenge for dealers is to keep up with the pace of change thrust upon the market by new entrants, as well national marketing campaigns by ADT and others. “If they are going to advertise interactive services, and you walk in as an alternative provider without interactive services, you are probably going to have challenges,” Harkins warned.
Harkins also emphasized a new threat to the traditional security provider that is emerging: the do-it-yourself system. He singled out Lowe’s recent launch of the Iris home automation and security product line, among others.
“We hear rumors that Home Depot is doing something. And we have seen statistics that suggest there are about seven million DIY systems installed today and it will double in size over the next five years to more than 14 million systems.”
Harkins pledged to the assemblage that Honeywell is redoubling its efforts and investing heavily in R&D to offer its dealer base products and services to compete in the crowded marketplace and meet consumer expectations. Part of that effort includes a new initiative: Honeywell leadership and engineering personnel will accompany installation organizations at customers’ homes to observe firsthand the challenges dealers are experiencing and to gather end-user feedback about Honeywell products.
“The panel interface from 10 or even five years ago is just not enough to keep your consumer happy anymore. We need to create products, new ways of thinking and new services,” Harkins said. “We would love the invitation to talk to your happy customers and your unhappy customers, to really learn how we can make your business and their lives even better.”
Rodney Bosch | Managing Editor