Figure 4 provides services offered by dealers in 2013 and 2014. There is a significant increase in most features enabling connectivity. As many small dealers responded to this survey, Parks Associates notes that the increase is even more dramatic than it may first appear. The large providers, new or traditional, all offer full connectivity or “smart home” feature sets. Smaller dealers are usually somewhat later adopters. Now the challenge for small and large dealers alike is to learn how to sell the benefits of these features efficiently and effectively.

Even better news for the security industry overall is why more dealers are adopting remote monitoring and control capabilities (Figure 5). The No. 1 reason is because customers are asking for these capabilities. That means the giant providers’ marketing messages are resonating and creating awareness – good news for all.

The second reason, more revenue potential, is also critical. As security dealers learn through interaction with their would-be and current customers why they want these capabilities, they will have even greater selling confidence and more revenues will arrive.

Gaining Forward Momentum and Potential

Figure 6 offers proof of the pudding. While respondent numbers are small because, even with 10,000 broadband households surveyed by Parks Associates, the respondent number that acquired a security system in the 12 months prior to the survey is a low percentage of all households. Nonetheless, the message is clear: Selling remote monitoring and smart home services with a security system brings higher upfront revenues. It also provides an average of $14 more RMR.

As 2014 unrolls, more smart devices and systems are hitting the market from manufacturers and channels that are not security dealers or professional monitoring providers. Revolv, now at Amazon and soon to be elsewhere, is new. Staples has Staples CONNECT. Sears has announced a set of “connected home” stores. Lowe’s sells IRIS. Single smart devices are also gaining attention with devices ranging from Philips’ Hue to Chamberlain’s smart garage remotes to Sonos’ streaming music system.

Momentum is growing; consumers are learning. Recent front covers of both Consumer Reports and Angie’s List publications depict the smart home. The security industry, with its blend of new features and understood benefits, has a formidable first mover position. That is good news for its manufacturers, distributors and dealers. Between 8%-9% of U.S. broadband households report ownership of any smart home device or controller. Figure 7 shows the percentage of device types owned by U.S. broadband households that are part of a security system. Now, every security player, regardless of company type, must compete to maintain the position earned. Competition will be fierce, as always, in an emerging marketplace. However, it is an exciting time and it is a long-term market, which bodes well for industry participants and consumers.

Tricia Parks is Founder of Dallas-based Parks Associates. She can be reached at [email protected].

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