How to Boost Sales and RMR With Smart Home Services
Three experts reveal how embracing the latest trends and technology from the front porch to garage can drive more sales and RMR.
Smart locks like this Nest × Yale model replace deadbolts and allow users to interact with the device through voice assistants or mobile apps.
What other features on the installation, sales or monitoring side do you recommend dealers keep in mind when evaluating these products?
DICOI: We want to give customers choices. We work to build out the portfolio with products we have tested beyond what the vendor has already tested to make sure it meets our standards. Especially with a lot of the smaller manufacturers, we give them feedback and help them iterate on their product before we’ll launch it. We test their IT security, too. A number of our employees put stuff in their houses to test it out as well.
KINNEY: There are compatibility challenges and things you need to educate your salespeople and installers on. One good example is not focusing so much on a specific doorbell offering in the package, but just a camera in general. So you’re going to sell video for the front of the house. Is it going to be on a doorbell camera? Maybe. We’re still bumping into doing some innovative and sometimes challenging and technical things. Dealers can add that expertise for the customer.
WHITAKER: When we’re talking with the customer, we’re not really talking about the brand when it comes to devices like video doorbells, locks, light switches or thermostats. That’s not really the value proposition. It’s about the feature benefits and how they’re going to use it once it’s installed. Don’t create all your marketing materials or train everybody to promote a brand. Ring had the brand recognition for video doorbell, but we have had virtually no trouble using a different video doorbell. We just talk about what different product types can do. Customers just want to know it is going to work.
Video doorbells such as this one from Ring can provide HD 1080 images and allow users to see, hear and speak to visitors from anywhere. With instant mobile alerts and two-way talk, home-owners can answer the door from their smartphone, tablet and PC.
Which product categories we’ve been talking about have the best margins? Can you give a couple examples of pricing models?
WHITAKER: If you go back about three to four years we had a tiered pricing structure, with a bit more for interactive, a bit more for video, a bit more for automation. We were then having to have two buying decisions … the equipment, because with our company you buy it upfront, and professional installation, and then there’s the monthly cost consideration.
About nine months ago, we shifted to one flat rate to encompass all of it. That’s driven our price point up to $45 a month for our ideal customer. I found they’re very happy to pay for it because of the value. The biggest justification for such an increase was the video. That’s the easiest one to justify why they’re paying more per month on top of the traditional monitoring.
Automation was definitely a piece, but people didn’t quite understand why that would cost more. We even have a bring-your-own-device methodology. If you want to buy your own door lock, go ahead. We just want to be the platform for you to utilize all these products together.
We will sell a standard Yale electronic lock for $249 including installation as an add-on. We tell them, “You can go buy this exact lock online or in a store for somewhere between $175 and $200. If you’re comfortable installing it on your own, we’ll give you all the resources to learn it into the system. We want you to have it. We think it’s a pretty fair price for us to take responsibility for the lock and install it for you for $249.” We find a lot of our customers agree with that.
DICOI: We package security and smart home devices with other offerings, cable TV and so on. But the biggest thing we did a couple of years ago, which really drove a lot of volume, was minimize the number of decisions the customer has to make. We have one SKU. Everything is included. If you want video recording you can bump up to that, but otherwise, everything is there.
So if you want home security, the conversation is over. If you want video, great. And then you can move onto the hardware. It really helps drive the volume and it’s much easier for folks to sell. Simplifying the whole process is important so that you can get to the real conversation of what do you actually need in your home; what do you want to do? And you can have that richer, more consultative discussion with the customer.
On the hardware, I think margins are tight. It’s a matter of what you can get with your providers. And it might swing your choice from using device A to B, etc. And hardware margins are generally lower than service, so that approach changes the economics of your business. That’s the decision you need to make.
What about partnering opportunities, is that something dealers should look for? What should they be careful with in those kinds of relationships?
KINNEY: If you’re looking to partner, don’t think about the brand. Think about the capabilities. Then look for partners who are dealer focused with an offering. Alarm.com is aligned in your efforts to try to deliver products, keep the customer experience high, and create additional recurring revenue over time.
DICOI: I agree, it’s about solving the problem the customer has. Is it a front-door problem or camera? Do they want to see some video in the house? You can solve the problem in a number of ways. We just see that customers like to have some choice of if it’s a door lock or something like that, I want it to fit the rest of my house. I want it to be this version versus that version. There’s an approach to partner with different folks in different ways that fit your business model and objectives.
WHITAKER: When you’re customer focused, you’re walking a fine line. We have to form partnerships, and I depend on the manufacturers and the choices they’re making. I need to have consistency for my salespeople to understand what we’re selling, consistency for my installers to install it successfully. At the same time, I have to be open-minded.
If that’s not what the customer wants, if it starts to shift, if they’re not satisfying the market demand, then I’ve got to be open to expanding, to making a shift away. That is challenging. But partnerships are important because if you do have an issue you need to know you’ve got a manufacturer you can go to and get answers, and you can get training on how to install it.
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About the Author
Scott Goldfine
Scott Goldfine is the marketing director for Elite Interactive Solutions. He is the former editor-in-chief and associate publisher of Security Sales & Integration. He can be reached at [email protected].
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