Security Providers That Only Offer Basic Services Suffer Reduced Customer Loyalty
The latest research from Parks Associates shows the importance that interactive services play in customers recommending a company’s products or services to others.
DALLAS — Professional monitoring service providers offering only basic security systems suffer from a poor net promoter score (NPS), while those offering interactive security and smart home systems score more than 50 points higher, Parks Associates reported at Electronic Security Expo (ESX) 2018.
An NPS gauges customer loyalty and their willingness to recommend a company’s products or services to others.
According to the research firm’s report 360 View: Residential Security, monitoring service providers that do not offer interactive services lost more than 10 points and fell into negative territory in their NPS over just one year.
“Interactive services and home controls are important differentiators for security providers, and they are crucial to a firm’s consumer retention and engagement,” says Dina Abdelrazik, research analyst, Parks Associates. “Changing NPS scores show subscribers will guide friends and family away from their current provider if it does not offer interactive services.”
Parks Associates research shows professionally monitored services with a basic security system received an NPS of 7 in Q4 2015. That score dipped to 5 the following year before hitting -6 in Q4 2017.
During that same time, the NPS for professionally monitored services with interactive security and home control systems increased from 33 to 48.
“Consumers now expect smart home products and interactive services as part of their security offerings,” Abdelrazik says. “Overall, Parks Associates estimates that 51% of professionally monitored security systems had interactive services in 2017. Given that interactive services have become mainstream, eliminating the basic security system offer and shifting interactive services to the value-tier offer will dramatically improve RMR (recurring monthly revenue) and help dealers compete.”
Abdelrazik spoke on the session “Smart Home Market Becoming a Brilliant Opportunity?” on June 22 at ESX. The session examined opportunities in the smart home, including market size trends and customer segmentation.
Panelists from ADT, Comcast and Nortek discussed the importance of smart home products and services to compete effectively and provide additional value for security systems.
360 View: Residential Security addresses the current state of the residential security market; the leading channels for professionally monitored security; the market dynamics, such as price, interactivity, and installation method, affecting the security industry; the impact of the smart home market on residential security; and key trends in the residential security market.
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