Smart-Home Devices Fuel Rising Residential Tide
Find out why no service providers are better positioned and more qualified to deliver desirable smart-home offerings to homeowners than security companies.
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As we enter the last quarter of 2014, barely knowing where a year’s time went, a bird’s-eye review of the security industry and its adjacent smart-home offerings is in order. The purpose: to be sure that we are not like the soldiers who efficiently chopped down many trees in a forest only to hear a commander’s voice in the distance yelling, “Wrong forest!”
What is the marketplace status generally telling us about what consumers want? What is the status of the smart home as an adjacency? Are current and prospective customers changing? If so, how?
Let’s delve into the 2014 Security Sales & Integration Residential Market Report to discover these answers and many more insights about the rapidly developing home security landscape.
Upping the Value Proposition to Increase Penetration Rates
Reviewing the overall marketplace for professional security services never exactly matches what any one dealer in a specific region encounters. Still, understanding overall shifts helps to plan for and identify prospect and market changes before they overwhelm or take sales personnel by surprise.
In Parks Associates‘ Q2 survey of 10,000 broadband households – representing all U.S. broadband households – 25% report having an active, working security system. Another 7% of respondents report having a nonworking security system. Three-quarters of the nation’s broadband households remain in homes without any working security system. That percentage for households without a security system increases to 80% for all U.S. homes; only about 17% of all U.S households have professional monitoring.
These numbers demonstrate much more market potential exists. The challenge is finding value propositions that resonate with consumers. Of the 25% of broadband households reporting the presence of a working security system, 80% report paying some monitoring fees, with the bulk paying for professional monitoring. Of the 19%-21% of broadband households reporting the presence of professional monitoring, the average monthly fee is just over $41 (see Figure 1).
Overall, the percentage of monitored households reflects solid growth for the professional security industry in 2013 and 2014. Sales of security systems dropped during the recession and so did the number of professional monitoring customers. With recovery have come higher sales and higher adoption of, and slower cancellations for, professional monitoring. At this point, the percentage of U.S. homes with professional security is equal to or a bit above where it stood before recession.
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