Resolving Smart Home Device Problems: Growing Opportunity for Support Services
There is a growing opportunity open for security integrators to address the support needs of connected consumers and their smart home devices.
Editor’s Note: SSI has partnered with Parks Associates for the creation of DIY FYI, a column designed to help dealers keep track of important smart home market developments, what the competition is and whether they want to jump into something they see as a new opportunity.
As the connected home ecosystem continues to grow and the technical complexity of broadband households increases, the technical support needs of consumers change. Currently consumers own an average of 10.5 connected devices, including an average of 1.4 smart home devices.
Smart thermostat and smart security cameras lead the smart home market in reported adoption, with 11% of US broadband households owning a smart thermostat and 10% owning a smart camera.
With these connected devices come technical issues, and consumers take a range of actions after experiencing problems. These actions include seeking to resolve the problem, either on their own or with professional help, as well as returning or replacing the device.
Self-Help versus Professional Support
Among self-help support options, consumers are slightly less likely to use self-help applications on their devices than other support resources. This is likely driven by lower availability of the self-help applications compared to other self-help resources.
Among professional support resources, consumers are least likely to email a device manufacturer or contact an independent support provider. Compared to other resources, email is a less popular means of support, especially for computing device owners.
Ultimately, the decision to use self-help versus professional support resources will depend on competence and convenience.
- Competence – Consumer familiarity with devices in the market helps to drive perceived competence.
- Convenience – Seeking professional support, via phone, in-store services, or even a truck roll, can be inconvenient regardless of the channel. Consumers can be frustrated by long wait times to connect to remote support services through the phone or chatbots. Also inconvenient are trekking to a store for in-store support and scheduling a time for a tech to provide support at home.
The most extreme option, from an industry perspective, is to return or replace the device, but this is generally the least likely option, although consumers are slightly more likely to return smart home devices than computing or entertainment products.
Consumers are more familiar with the latter, more mature category of products and more likely to consider them essential. One in five consumers who found the smart home device setup process “very” difficult returned their device, so product returns are a threat to industry growth for the smart home.
As the smart home industry increases market penetration rates, minimizing product returns will be critical, and doing so will require increasing consumer perceptions of product familiarity and convenience when setting up, using, and troubleshooting these devices.
Just over one-half of smart home device problems resolved by a professional technician are resolved for free. This represents a slight increase over the past year and corresponds with a significant decrease in the percentage of consumers covering the cost of services using one-time fees.
The falloff in one-time fee payments also corresponds with a slight increase in the percentage paying for services with an existing support and warranty service.
Traditionally, companies offering premium support services for smart home devices, such as HelloTech and Amazon Home Services, did so for one-time fees. However, existing subscription support service providers — including Best Buy (Geek Squad) and Verizon — have expanded their device coverage to include smart home devices.
While adoption of premium technical support services experienced slight growth in 2016, adoption has remained fairly constant over the past few years. Approximately 20% of broadband households report having a technical support subscription. The primary factors influencing adoption in the US market are as follows:
Top 4 Barriers
- Increasing device reliability – Just over 40% of consumers who do not have a technical support subscription report that they have not subscribed to a service because their devices usually perform well. If consumers perceive that they will not need support, it is highly unlikely that they will pay monthly or yearly for a support subscription.
- Consumer ability and desire to resolve technical problems – More than half of the technical problems consumers encountered with their devices over the past year were resolved without professional help. Among consumers who do not have technical support subscriptions, approximately one quarter report that they do not have a service because they do not need help resolving technical problems.
- Lower-cost technology – Given that the cost of consumer technology is declining, some consumers may choose to replace a problematic device, rather than acquire a subscription service to resolve its problems.
- Consumer preference to pay when they have a problem – When given the option to pay for technical support services per incident or use a monthly or annual fee, the majority of consumers (70%) prefer to pay for each incident. More than 40% of consumers who do not have a technical subscription report that they do not have one because they prefer to pay for technical support services only when they encounter a problem.
Top 5 Drivers
- Increasing technical complexity in the home – As consumers attempt to enable complex use cases within the smart home, interoperability issues can emerge, prompting the desire/need for support subscriptions.
- Connectivity issues – Maintaining reliable WiFi connectivity throughout the home is complex, and monitoring is required to prevent service interruptions.
- Device innovation and emerging devices – Consumers’ lack of familiarity with new products drives enablement support needs, including assistance with product setup and use.
- More devices in the home – Consumers with more devices in the home experience more technical problems on average, making them more likely to acquire a support subscription.
- Increased security concerns – Nearly two-thirds of broadband households report concerns about security and privacy when using their connected devices. Protecting consumers from ongoing threats requires ongoing monitoring – a model best served by a subscription service.
The market for support subscriptions remains fairly fragmented. A number of consumer technology brands, including security software companies and independent companies like HelloTech, all capturing a small share.
With the increasingly competitive market for consumer technology products and services, providing robust technical support services is a competitive differentiator. There is a growing opportunity open to all players to address the support needs of connected consumers, and the smart home industry in particular is making investments in technical support resources.
- Ayla Networks, a proven smart home platform offering Cloud services to smart home device manufacturers, recently partnered with PlumChoice to offer enhanced technical support services to its device manufacturer partners.
- Puls Technologies, a San Francisco-based company providing smart home support, recently received $50 million in funding, an indication of an anticipated need for support services in the industry.
The consumer decision process regarding support solutions in the face of device problems depends on their perceptions of the devices and the convenience of the available options. As the number of services increase, consumers will have multiple options to choose from, so convenience being a key factor in determining their success. Support services with intuitive self-help solutions, which can be scaled up to more robust and engaging services when necessary, will find a receptive customer base among today’s smart home households.
Patrice Samuels is a senior analyst at Parks Associates.
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