Why Aren’t You Wired Into Home Networking?

“Diversity is one of the few things that you can depend on that keeps you in business,” contends Gary Godchaux, president and CEO of Home Theatre Concepts in Slidell, La. Godchaux isn’t the only security dealer who applauds this sentiment. More dealers these days are cognizant of this technological boom, known as home networking, and how they can benefit from offering services, such as HDTV, satellite TV and high-speed Internet connections via broadband technology.

It’s a simple desire to branch out from providing only traditional security services that has catapulted Home Theatre Concepts into the new realm of full-service companies, which includes structured wiring applications. Recent statistics from NxGen estimate that by 2001, 5 percent of U.S. households will utilize rapid broadband technology, with Digital Subscriber Line (DSL) installations reaching 1.7 million. So, why isn’t every dealer infiltrating this profitable market niche? Some experts cite lack of vision, poor training and unfounded skepticism as the main barriers.

Firms That Look Ahead Have Staying Power

Brian S. Shrake, sales manager for Town Security in Abingdon, Md., is apprised of the long-term advantages of committing to home networking. “As an industry, we have become so obsessed with recurring revenue that many dealers just about sell their soul for the $20-plus per month they can get from a security installation,” he says. “Branching out into other areas of low-voltage wiring and systems not only generates more income, but bonds you to the client.”Increasing Revenue; Acquiring Lifetime Clients

Another advantage to entering the home networking game is the partnership that dealers form with customers. Your full-service shop will provide a myriad of offerings for your clients that would not be restricted to just monitoring and alarm system maintenance.David Merrick, vice president of marketing for Vector Security in Pittsburgh, suggests, “It’s a belief in our industry that the more services you provide to your customers, be it residential or commercial, the more protected your recurring revenues are and the lower that attrition rate will be once you’ve done that.”Consumers’ Tastes Are Evolving Quickly

Understanding consumers’ needs is a vital part of a dealer’s livelihood. For one thing, homeowners are becoming more technologically savvy and demand faster communication data, such as Internet access. Therefore, it’s up to the dealers to fine-tune their market research and keep abreast of technology.Internet Is the Main Selling Point for Homeowners

Shrake also touts the Internet as the main tool of the home automation system. “The president of SecurityLink has stated in several interviews and speaking engagements that he sees the alarm keypad becoming the headend of a home network/automation center,” laments Shrake. “In the real world, the obvious choice is the home computer. Nobody is going to stand at their alarm keypad and execute complete programming commands.”Understanding the Big Picture, Future Potential

Although homeowners will benefit greatly from home networking, Brand insists there is the “bigger picture” to consider.Building Relationships With Homebuilders

Establishing relationships with homebuilders can be a profitable niche, mainly because you are dealing with a unit of homes, not just individual structures. “People are looking for that one-stop shop, especially in new construction, because it’s awfully difficult to manage four or five different suppliers who are [offering] everything from central vacuums to music/sound and security,” explains Merrick.Manufacturers Make Training More Pervasive

Dealers new to the market will discover that training is readily available to them, especially through manufacturers. “At any given time, I can make a phone call and the manufacturer will have technical time set up for my technicians to go to the [manufacturer’s facility], or the company will have a rep come to my people for in-house training,” says Godchaux.Is There Room for the Mass Marketers?

While many agree home networking is a logical fit for the security industry, some independent firms are cautious about all the players in the market. In fact, some are criticizing the national alarm companies’ methods for selling alarm systems, and are cautioning against mass marketing home network packages. To them, it’s the difference between offering a total security/home networking solution and compromising quality service.Partnerships Help Maintain Quality Work

In September 2000, Vector Security finalized its alliance with Verizon Communications to bundle home networking solutions and security products. The partnership will enable builders and homebuyers to integrate Verizon’s home networking innovations, which will be sold as Verizon Ready.Looking Toward the Future of Home Wiring

What’s the one thing that still prevents security companies from making this leap? Many believe fear is the culprit. Where will the market be in the next five years? Shrake suggests, “The home networking market will explode in the next five years.”

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