Managing the 2008 Housing Boom
The current credit squeeze for new mortgages means less moving and more investing in the current home. The question for businesses that offer residential integration is how to benefit from this opportunity.
Success begins in the perception of your own business. Those in the market who view themselves as business people and understand that the goal for a business is to create and keep a customer will realize the greatest success. Those that consider themselves installers or service providers for specific products, such as garage doors, security systems, home theaters, doorbells, etc., will not prosper as much.
The volume of new construction business has given our market a nice ride. Installers in specific markets could depend on a consistent stream of business. Business installing garage doors, security systems, whole home audio, lighting and home theaters, although competitive, came easily.
Now, success depends on moving from a narrowly focused, high-volume, low-margin new construction model to a broader, low-volume, high-margin retrofit model.
That is where the problem for the smart home market lies. Except for the small percentage of companies that viewed themselves as businesses rather than installers, most companies stayed in their specific niche and rode the new construction boom.
Why not install two or three garage doors at each house and move on as soon as possible? Who needs to deal with more complex installations that include in-vehicle and Web-based controls that tie into security, HVAC, lighting and audio plus e-mail alerts? Smart business people do.
The residential boom allowed businesses to behave irrationally by actively directing their customers to competitors. Although staying so focused may have made short-term economic sense due to great demand in the core business, it does not make sense now. Our market needs to retain and increase revenue from its existing customers. We need to create and keep customers.
The difference in attitude is critical. Businesses that view a customer’s residence as “their turf” and proactively service their accounts, maintain and improve their clients’ digital lifestyle and make sales calls (proposals for new and improved installations) will succeed.
A good businessperson will not allow the competition to get in the door of his customer. Those who do not see the homeowner as a long-term customer and source for increased sales but instead focus their roles narrowly on their specific product risk business failure.
Consider a customer who calls his or her security company with a plumbing problem. The smart business will have a relationship in place and send the plumber. But they will invoice the customer on their letterhead, follow up to evaluate the customer’s satisfaction and ask, “Is there anything else we can help you with?”
Our market’s best advantage is the level of trust our customers have in us and the level of service you are able to provide to them. You are their trusted advisor in the home.
A smart home owner requires a Rolodex today to improve his or her digital lifestyle, and it should not be that way. Providing a whole home strategy and service is the current business opportunity for smart businesses to pursue.
Commercial businesses now routinely outsource their information technology (IT) management. Homeowners also increasingly are looking to oursource their smart home technology support.
The time to rethink your business model and reach out to your existing client base is now. We hope you find valuable ideas and information in this issue to help you. And we invite you to visit us at The SmartHome Pavilion at ISC West April 2-4 in Las Vegas.
Please let us know what your company is doing in the existing residential market at email@example.com.