The Importance of Developing Relationships With Builders and How to Do It
Three experts share how to connect with prospective partners, what products and packages to offer, and how to make builders look cutting edge in the process.
It was the shot heard around the new residential construction world when last year the nation’s No. 2 homebuilder, Lennar, announced WiFi and Amazon’s Alexa would be built into all its new homes.
It further solidified the future ubiquity of smart homes and served notice to both builders and subcontractors, such as security dealers, of the mutual benefit to partner on opportunities presented by the rapidly expanding Internet of things (IoT).
“The Lennar deal was a wonderful thing for us, for our industry,” says HomePro President J.C. Gonzalez. “It’s going to take time for some of these builders to understand the importance of that deal so that you can go there and be present when they need some help. They’re starting to see what other builders are doing and they’re falling behind because they’re not offering some of the smart home things. That is the golden opportunity for us to come in as an expert partner.”
Gonzalez and two others well versed in the ins and outs of working with homebuilders — Guardian Protection Services Chief Sales Officer Bob Gallup and Alarm.com Vice President of Strategic Sales Shawn Barry — explain how to be seen as a quality dealer partner by gaining a deep understanding of builder needs and expectations in all construction phases and processes.
What typically are builders asking of dealers in reference to smart homes, and what does the term mean to them?
J.C. GONZALEZ: We have your traditional, national high-volume production builders, then we’ve got semi-custom builders and then custom homes. We like to focus on the production and semi-custom. Each has different demands, different wants, different needs. Production guys want two things; they want it as low cost as possible and they want to build a house as quickly as possible. It’s up to you to find that solution for them, to put something in as inexpensive as possible and not delay their production of the houses at any time.
The semi-custom folks really understand the true value of putting these systems in and how they can help them sell their houses. Production folks see the benefit as well, but it’s really the semi-custom guys where we’re seeing the biggest penetration in putting more robust systems in there. A smart home to them means different things. That’s where it’s important for us to be their voice, to be their advocate as to what they need to put in their homes.
BOB GALLUP: They want us to almost be invisible but yet to be the expert. When we go in, we really have to have that confidence that we know the smart home systems and solutions. It’s more than what’s the demographic attributes of who you’re trying to sell to. With the Millennials, is it the move-down buyer or move-up buyer? What’s appropriate for that? Understanding what those market trends look like, and then coming in with a bit of segmentation analysis, it really is a consultative sell at the beginning. The first thing they’re always thinking is, “What’s this going to cost me, how is it going to impact my sales cycle?”
If you can get through those two things very quickly, then the fences start to go down and you can start to establish that consultant-type relationship. Look, you’re going to end up signing contractor or subcontractor agreements where they’re going to treat you just like a roofer or carpenter or asphalt paver. There are some challenges there, but we have to be flexible and nimble in order to pivot our business to support theirs.
SHAWN BARRY: Some builders simply define smart homes as all the shiny objects within the house. Our definition is you have to start with a platform decision first because not all those platforms work with all those shiny objects. A key component and the foundation of your conversations with builders is really understanding the platform decision. Then educate them on all the shiny objects that are out there. The last thing a homeowner wants, and certainly not a Millennial, is multiple apps to control all the things within their home. A smarter solution is one that can control multiple things together with an easy upsell path.
How do you start building these relationships with the builders? Who is the main point person?
GALLUP: You’re not going to start at a nationwide builder. Better to start more local to you and your domain expertise. We’ve always approached both the head of purchasing and head of sales. Purchasing cares about the cost of the home and the margin the home is going to deliver. Sales cares about getting the customers to sign a contract. You’re trying to sell the dream, the vision. It could be to the leader of the builder, depending on the size. In our case, we’re equally focused on the purchasing piece because he or she cares very much how to integrate them into their supply chain.
GONZALEZ: The purchasing manager ultimately hires and fires us; they’re the people looking at the dollars and cents. It’s up to us to make sure we’re showing value, maybe at a lower cost so that we have the ability to meet with their buyers to offer some upgrades. That’s where we win and they win, when we can be a profit center to them. It’s also important to find an advocate within the company. It might be in sales if you can show them the true value of what you’re trying to do and how a smart home and this technology can help them sell the houses.
I use this analogy; when we look at cars today, any car coming out nowadays has some of these great technologies that weren’t available before. Somebody buying a $15,000 car expects this technology in that car. That’s the way I see the homebuilder industry going in a few years. It’s going to be expected, and it’s up to us to make sure the builders understand where the trends are going, what’s important to them and what the customers are asking of us to offer some of those solutions at a good rate.
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