When Residential Security Opportunity Rocks
The residential security landscape is being rocked by a seismic wave of IP connected features and services. Gain perspective of how each segment of the channel is being jolted by this major shakeup and eventual shakeout. Also take heed of the telling statistics and tips to capture new revenues to keep your business on solid ground.
The seven attributes of relevancy, with the exception of cultural sets that are less important when viewing only the U.S. marketplace, are shown in Figure 4. Familiarity is the first and foremost factor necessary before a product or service is acquired. No other rele
vancy factors are addressed by consumers until familiarity achieves a high enough score.
Owners of a new-to-market product or service report themselves less familiar with that owned product than do nonintenders/nonowners of broadly diffused products. Thus, for example, a U.S. consumer who does not own a microwave oven reports his or her familiarity at a higher level than does an owner of a tablet. The message is clear: familiarity is increased by either of two factors — ownership of a product or service or mid-to-higher levels of diffusion for a product/service.
Using microwave ovens (now in more than 90% of U.S. homes) as an example, the low percentage of people without a microwave made a ‘no need’ decision related to a later-stage relevancy factor, typically “the importance of the benefit to me personally.” They are familiar with the product and understand it. Many nonowner/nonintenders of tablets, on the other hand, have not yet addressed the value of benefits. They are not familiar enough to make that assessment. Even owners of tablets do not perceive themselves as highly familiar with this relatively new product.
7 Ways to Familiarize Consumers
With the relevancy concept in mind, and very low levels of familiarity for connected home devices and benefits today, security dealers must use different tactics to acquire customers than they will need once these services diffuse. The first imperative is developing familiarity. Here are some tips to accomplish that mission:
- When major providers in your territory are advertising or messaging, use that opportunity to contact existing clients or available prospects. The big players are aware of the need to explain connected home features and benefits; they will spend marketing dollars to do that. It is to small dealers’ benefit to keep a keen watch on that activity and then use it to their advantage.
- Consider mailings, calls, promotions, and local press that begin with an explanatory focus, and then follow with benefits. Media such as newspapers are paying more attention to some connected home features than in the past. If you have a client willing to showcase his home to demonstrate these devices and services, your local press may well provide ink on it. Explain, explain, explain.
- Use demonstrations or video to enhance explanations. Seeing is believing … or at least the beginning of understanding.
- Do not start with benefit detail; start with helping to explain the concept of what you are offering. Only after your prospect considers themselves familiar enough with the concept, can they focus on assessing the personal benefit of the features to their lifestyle.
- Do not lead with energy management as a primary driver at this time. Obtaining savings in energy can offset the costs of equipment or monthly fees. Based on that alone, consumers have another rationale for adopting monitored security if they have been on the fence.
- Pay attention to which features major players are offering and consider the special circumstances of your territory. For example, flood detection may resonate in some areas and not at all in others. Managing automatic landscape irrigation sprinklers with the help of zip code level weather information will resonate in the West, but perhaps not in areas such as New York.
- Reach out to current customers. Don’t forget about low-hanging fruit, and also a way to create stickiness with existing clientele to build long-term business relationships.
Be Prepared as Demand Grows
Once individual consumers are familiar with a new product or concept, they can assess its personal value. At that point, security dealers can move from explaining IP services to promoting benefits in detail. This is true for selling to an individual consumer or to spreading a broader message across a set of target consumers. Explaining benefits in detail before familiarity with the product category idea is present puts the cart before the horse.
Developing familiarity by piggybacking on the marketing efforts (and dollars spent) of giants is not security dealers’ only challenge. Security dealers must determine how they will position IP services within their portfolios. Will new services be only ancillary upsells or will they be thrown into the monitored security sale nearly “free” for competitive parity? Can IP services provide profit if sold by themselves? Different security dealers will adopt varying business strategies as they adopt IP services. But all must develop their targets’ familiarity levels. If that does not occur, even good business models will not grow the market.
While timing is never certain, it is certain that IP services will diffuse in multiple ways into U.S. households. The IP services’ market will produce billions of dollars over time and help sustain growth in monitored security. Dealers who seize the opportunities early and gain expertise have much to gain.
Tricia Parks is CEO of Dallas-based research firm Parks Associates. She can be reached at (972) 490-1113.
*Forecasts do not include single independent IP devices such as connected door locks or connected garage door openers. Nor does the forecast include high-end control system components except when installed as bundles with some security system.
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