Residential Ready to Rally Around New Services

IP-based services and mobile apps that allow consumers to control and stay connected to their homes are expected to anchor a key market adrift in economic uncertainty. SSI‘s 2011 Residential Market Report provides research from Parks Associates to help security contractors take hold of these opportunities.

<p>The yearly percentages above provide a historical comparison and forecast for monitored security from 2003 through 2012. Market penetration rose consistently before topping out at 19.1 percent in 2008 and 2009. Recovery from an incremental dip in 2010 is expected to continue through this year and 2012. Parks Associates</p>These are not idle additions to their portfolios. They are occurring after extensive study that classifies the attitudes and desire for new services among current and would-be monitored security households, as well as among general broadband households. These providers understand that current monitored security households are much higher users of technology products than average households.

Householders with security systems are more likely to own smartphones, more likely to be frequent users of computers, likely to be interested in tablets, and in addition heavy users of home services in general. Moreover, a much higher percent (at least 2x) of heads of households who purchase monitored security report a willingness to pay for IP services, compared to average broadband households. These tech-savvy householders also show concern that they are to some degree losing their ability to manage the daily happenin
gs in their busy lives. Make no mistake; they want that sense of control back. 

The “Benefits of Professional Monitoring Security Features” chart above illustrates the value placed on basic IP service features by those householders with monitored security but without the IP-based feature, and compares those values with monitored security households that have the IP-based feature.

The value placed on these features is nearly as high as the value placed on that most important monitored security feature, the notification of first responders in case of intrusion or fire (for those with fire alert services). Of particular note is the high value reported by householders with IP features: Nearly three out of four users (72 percent) with monitored security value the ability to view a CCTV camera from a PC or smartphone; more than 80 percent of users value the ability to check on their home’s status via a PC or smartphone.

Although householders with monitored security are high-rate owners of multiple PCs, smartphones and other tech products, that doesn’t mean they want to set up their IP features themselves. Indeed, most don’t want to complete that task on a do-it-yourself basis, even if they are perfectly capable of handling the task themselves. 

Here lies one opportunity to earn extra installation dollars and perhaps increase either the customer’s monitoring fee or set another fee for the customer’s personal Web site. Security contractors will need to proactively educate customers on these new service possibilities or risk another competitor filling the void. Actively contacting customers will become even more important and potentially fruitful now since the aforementioned national providers continue to roll out IP-based security and home control services.

The marketing clout of these providers along with copious media coverage will help educate the security consumer, a benefit even independent dealers can exploit. Consider: A whopping 82 percent of monitored security households find status checks via a connected device or computer highly valuable. That simple ability turns the security system into a daily anxiety reliever.

Consumer Value-Add Power Play

In the second quarter of this year, Parks Associates tested multiple valued-added IP service concepts among U.S. broadband households. Three of the concepts relate to security and three to energy. No single concept mirrors any exact company’s current service; instead, they are realistic composites developed from studying multiple service options.

The “Appeal of Home Security and Energy Services” chart on page 36 provides the high-appeal ratings accorded to each service. Note that two security concepts garner the most high-appeal ratings, “Home security and monitoring service” and “Remote access control service.” Most interesting are the high ratings for what are, in reality, new and not well understood services, such as the “Video home monitoring service” category (32 percent). This indicates high latent demand of a level not typical for new services. Qualified security contractors can either seize this market opening or haplessly witness dealers from other industries win the opportunity instead. Channels as diverse as HVAC contractors, consumer electronics retailers and even mass merchants are exploring or acting on the opportunity to provide these services.

The market for premise security is facing a challenge unrelated to the sputtering economic environment. This is a mature market niche in need of revitalization; IP services may be the optimal solution to affect that renewal. Not only do IP-based services add daily benefits for traditional security, they are enabled on a platform expandable to energy and automation services.

This potential combination of services excites all types and sizes of service providers. Not only will layering services increase potential monthly revenue, they expand the universe of interested householders immediately by about 10 percent. The early and obvious features are just a start; more services will emerge, ranging from diagnostics for major appliances and systems to more discrete energy control and reaction options.

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