Vivint Sheds Light on Its Marketing Methods
The June issue of SSI features Provo, Utah-based Vivint (formerly APX Alarm) profiled for winning this year’s SAMMY (Sales & Marketing) Award for Best Community Outreach Program. As part of the process, I spoke at length with Kristi Knight, Vivint vice president of corporate communications, not only about the rapidly rising company’s marketing but also about its success, recent name change and controversial tactics.
But first here’s some background on Vivint that Kristi provided: In 1999, Todd Pedersen saw an opportunity in the security solutions market to sell a high-quality product using a personal approach. Now, with more than 13 years of experience, the company has grown to service more than 500,000 installed systems across the United States and Canada, and retains 5,000+ employees. APX Alarm grew steadily through the mid-2000s; however, 2006 marked a breakthrough year for the still-growing company. In July it signed a $75 million credit facility agreement with Goldman Sachs. The agreement enabled APX to research and pursue new market opportunities that would fuel the growth of the company for the foreseeable future. Also in 2006, APX expanded to Canada by sending its traditional base of geographically focused teams of sales representatives and installers to residents of Toronto. Further cementing its place as an industry leader, in two consecutive years (2008–2009), APX Alarm was recognized for call center operation customer excellence when it received the J.D. Power and Associates “Outstanding Customer Service Experience” certification. With the financing in place for real growth and the customer service record to support that growth, the company’s customer base grew by 825 percent between 2005 and 2010. In 2009, Goldman Sachs and APX completed another credit facility agreement worth $440 million. On Nov. 1, 2009, APX acquired a monitoring station in St. Paul, Minn., from Criticom Monitoring Services, a subsidiary of Protection One, along with 83 employees. In December 2009, APX opened its new 125,000-square-foot corporate headquarters in Provo.
APX Alarm further expanded its product set and capabilities in October 2009 with the release of the Go!Control touch-screen panel. The all-in-one security and home management system allows customers to control their security systems and thermostats remotely. With the threat of higher energy prices influencing customers to take steps to reduce the amount of energy they consume at home, APX Alarm expanded from a security-only company to providing home automation solutions. In late fall 2010, the company launched a company-wide rebranding effort to better represent its potential and future direction. On Feb. 1, 2011, APX Alarm changed its name to Vivint. The name is based on the words “vive,” which means “to live,” and “intelligent.” In conjunction with the rebrand, Vivint also introduced a new line of products to further expand its home automation capabilities. This line includes lighting and small appliance controls, automatic door locks and video surveillance.
Why did you change the company name from APX and what are the marketing challenges in undertaking a name change and rebranding? How has the market responded?
Knight: Based on our new products (video cameras, automatic door locks, energy management, etc.) and the expanded market we are now addressing, we no longer felt the name “APX Alarm” portrayed who we are. We chose the name “Vivint” because it combines the word “vive,” which means “to live,” with the English word “intelligent.” In all aspects, it represents our mission to help customers live intelligently. The market has responded well. There is a need in the market for simple, affordable home automation solutions and that is what we provide.
Why do you believe there has been so much controversy surrounding the summer sales programs?
Knight: Door-to-door sales are controversial by nature. However, it’s important to note the complaints we receive are rarely related to our product or service. In addition, the number of complaints is small for a business that has thousands of salespeople knocking on millions of doors a year. As our CEO Todd Pedersenhas said, we don’t condone any aggressive-style sales, but that there is no such thing as a sales process that doesn’t have some aggressiveness to it. Otherwise you’re not going to sell anything.
What is the company’s general philosophy or approach to marketing initiatives and expenditures?
Knight: Our marketing decisions are based on data. We develop an initial hypothesis about how to best reach our intended audience, which can be the security and home automation markets or consumers. We then create collateral and test its reaction in the market. Using specific measurements, we test what affect they have on sales and if they’re meeting their objectives. For example, 2010 differed from traditional years because of the rebrand. Because we needed to increase brand awareness, we spent more money on collateral that would achieve that goal.
What is your marketing budget? Is it growing or shrinking, why? How has it been affected by the economy?
Knight: At Vivint, we are dedicated to using the necessary resources to educate employees, customers and the market about who we are and what we do. Our budget reflects this dedication. Additionally, the company continues to grow rapidly, and our budget grows alongside the company.
Specifically, please detail how materials for Vivint’s marketing materials are created and implemented? How successful have they proved and why?
Knight: Each piece of collateral we create goes through a specific process. We receive the request from a client or decide that a project is necessary. Then, we hold brainstorming sessions, assign the project to our department heads, and collaborate and execute. Finally, once the piece has gone through production, we implement them. The success of a piece depends on a variety of factors. However, during the planning phase, we attempt to calculate the roadblocks to implementation so that our clients and projects have the greatest chance at success.
What are some other specific marketing ideas that have proved beneficial for Vivint and why?
Knight: The rebrand from APX Alarm to Vivint represents one of the most influential and beneficial ideas the marketing department has executed. It allowed us to create a strong, consistent brand that will grow with the company.
What have been some of the greatest challenges in creating and distributing your marketing materials?
Knight: Because of the explosive growth and reach of Vivint, it is often difficult to ensure our hundreds of thousands of customers and hundreds of sales offices receive the materials they need exactly when they need them. In addition, because the marketing department services our inside sales teams and internal clients as well as creates materials for our customers, we must learn and be familiar with a vast array of topics.
Who produces your materials, is it an internal function, outsourced? Why?
Knight: We have an internal marketing team that produces our materials. The team is comprised of web designers and developers, graphic designers, copywriters, and video specialists, as well as other positions to support the company. We choose to complete a majority of o
ur projects in-house because we have a talented team that is dedicated and involved in our brand.
What is your ROI model regarding marketing? What sort of metrics or other techniques do you use to measure this?
Knight: Our ROI model is based on the overall growth of the company. We often use dedicated phone numbers to track the number of sales that result from offers and campaigns. On a broader scale, we believe that the overall growth of the company reflects our efforts to educate customers about what we offer.
How do you judge whether a marketing initiative or materials are successful or not?
Knight: We implement a number of techniques to ascertain the effectiveness of our marketing initiatives and materials. We use dedicated phone numbers to track the number of sales that result from offers and campaigns. We also create and administer customer and employee surveys, and carefully monitor community response via social media, customer testimonials, and customer support phone calls. The most easily tracked metric is our effect on sales. If our projects increase sales, our initiatives are successful.
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