ADT Execs Outline Ambitious Plans for 2017
Top executives reveal what will be unleashed in 2017, and how the 143-year-old firm is pacing the industry’s most advanced new products and services.
Let’s turn to the connected home and security mix. How many customers are looking for sexy home automation types of services or offerings compared to customary security-style offerings?
HAENGGI: More and more when consumers think of home automation, they still see it as remote arm/disarm and video.
Those seem to be the highest appeal items for customers. I think you’re also seeing more bring-your-own-device customers, where they may have a security system from ADT and maybe a Nest thermostat, maybe a Netgear Arlo camera.
They’re saying, “I’ve already bought these devices, how can I bring it into my security system?” We continue to see security as the core with these elements around video and remote arming and disarming being the two most popular features.
In sales interactions I have listened to, almost 80% of what customers ask for upfront is a camera. Almost before the rep could get to anything, the customer is asking for the camera. I would say 80% or 90% of those requests are for an outdoor camera.
They’re looking for front or back door coverage. We do an offering where it’s a wireless camera that’s an indoor camera in addition to an outdoor camera.
Everyone loves the idea of getting one inside when you pitch it as you can turn it off when you’re home if you don’t feel comfortable and turn it on when you’re not home.
Another thing I heard on several of those calls is customers’ interest in being able to remotely monitor a parent or mother-in-law to get signals if there hasn’t been activity after 10 a.m., or if the alarm isn’t set at 9 p.m. you can actually arm the system yourself.
You heard this wave of relief of being able to help protect my mom without her feeling I’m encroaching on her. I can do it remotely. I can check in. I kind of know what’s going on without hovering, so to speak. That was an interesting aspect of seeing how people are realizing the value of home automation.
DARFLER: If you look at the top 20%-25% of the market that’s going to go traditional, two or three times that size of customers are households that have a desire for security but may not be ready for a traditional system.
We think over time and as life stages change, the customers that sit in those blocks will eventually find their way into the traditional system. It might also be a person who only has a Netgear Arlo camera and then wants to add professional monitoring to that.
Or life stages change, there’s kids in the house, maybe they moved to a bigger home, moved out of an apartment and into their first home; it’s in those scenarios where that customer becomes a traditional security customer.
Can you give me an example or two of a typical sale today in terms of different service offerings, what might they be and at what price range?
HAENGGI: It ranges anywhere from what I would call interactive services, which is going to be in the mid-$40 range, into interactive with home automation/video, which is going to be in your $55 to $60 range from a monitoring perspective.
What is ADT’s view of the DIY market, and how big do you see it becoming? How will it coexist with professionally installed systems?
DARFLER: It’s tough to size the DIY market because the definitions of what that encompasses vary wildly. We like to look at it is as maybe a 20%-80% split.
The traditional security market addresses the top 20%-25% and everyone else is an opportunity to enter the security space in a DIY scenario or capacity. It’s why we did the Canopy platform.
It’s why we’re trying to deliver best-in-class professional monitoring into as many third-party devices as possible, so we can corner and acquire the professional monitoring piece of that DIY market.
Demographically, we think it opens up things like renters, millennials who tend to index a bit less against a traditional security system. Students, first-time home buyers, all those demographics that traditionally have not gone with that traditional security system out of the gate.
HAENGGI: Don’t forget Protection 1 ventured several years ago into the DIY space and found it to be successful, notwithstanding any advertising against it, just taking the opportunity that comes in.
We’ve parlayed that into ADT as well, where we’re taking a population of customers that fit more of a DIY profile, but ADT didn’t have a DIY offering and are now offering what I would call a traditional system via DIY.
We’ve seen research and seen it to be true in some cases; it’s not a DIY market, it’s a do-it-for-me market. I may go buy the thing but then life gets busy and I don’t feel like dealing with it. So I still want someone to come out and do it for me.
DARFLER: Or they get stuck trying to set it up, and they need help configuring and maximizing their usage and getting the most out of the product. It’s to folks like ADT that we expect those consumers to turn, back to that people protecting people philosophy
HAENGGI: It’s that idea that as we continue to advance with our technician force, to really own the IoT [Internet of Things] in the home; that it may not just be about your security system but how all the interconnected devices work and helping make them work seamlessly.
Are there any other offerings customers seem to want?
HAENGGI: We’ve had several focus groups and one of the things that keeps coming to the forefront is cybersecurity. As more and more IoT devices enter the home, you’re creating what I call new doors and windows for a different type of intruder to come into the home.
Consumers are becoming more aware of that vulnerability. ADT is the brand that resonates as being able to really own that space in the consumer’s mind as delivering peace of mind and that’s one of the areas Jay is exploring to see how we ultimately bring that to market.
We [Protection 1] started several years ago protecting the networks of big, large, national banks for their security infrastructure. Why? Because Target was hacked through an HVAC system. So having a secure network became a critical component of the security system.
We offer that. We have a NOC [network operations center] that we maintain that does just this. So it’s about taking that offering and bringing it to the core commercial, small business, and ultimately the residential customer.
Realizing what a huge name and influencer ADT is in the industry, what’s important to the company in terms of presenting a positive face on security as a whole?
HAENGGI: I think one, it’s how we take care of the customer. That portrays creating a reputation in the industry of superior customer service.
You see a multitude of other industries, large industries, telco, cableco, that are just riddled with low expectations on customer experience. So it’s about ensuring that as a brand we show professionalism, great customer service and integrity.
Integrity means things like vetting products before we sell them. We don’t look at this space as an add-on to something else we’re doing; we see this as the life-safety business. First and foremost we think about that when we go to market.
DARFLER: At the end of the day we set the standard for what it means to protect lives and protect families.
It’s so easy to get caught up in the cool new product or cool new app, but when ADT decides that’s going to become a part of what we do and what we sell, it now becomes about protecting lives and protecting families. We look at our role in the industry as to set the standards for what that means.
Security Is Our Business, Too
For professionals who recommend, buy and install all types of electronic security equipment, a free subscription to Security Sales & Integration is like having a consultant on call. You’ll find an ideal balance of technology and business coverage, with installation tips and techniques for products and updates on how to add sales to your bottom line.
A free subscription to the #1 resource for the residential and commercial security industry will prove to be invaluable. Subscribe today!