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Home » Cable and Telco Providers Present Challenges, Opportunities For Security Dealers
Trends & Industry Issues

Cable and Telco Providers Present Challenges, Opportunities For Security Dealers

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September 10, 2012
Jay Kenny
KEYWORDS financial trends / security dealers
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Over the past 18 months, dealers and integrators have witnessed the residential security market undergo a dramatic transformation with the entry of such well-known names as AT&T, Comcast, Verizon and Time Warner. Even retailers Lowe’s and Best Buy have announced residential security and automation offerings. The timing of their arrival is no accident: Research firm Parks Associates estimates revenue from connected home and security monitoring services will grow from $9.4 billion in 2011 to $13.8 billion by 2016.

As cable, telecom and other big brands with deep pockets flex their significant marketing and advertising muscle in local market rollouts across the country, dealers and integrators are no doubt questioning with how to best protect their existing customer base, position themselves to remain attractive to new customers, and even capitalize on opportunities created by these developments.

This article lays out key strategies for security dealers and integrators to proactively address these developments, ranging from how to adapt customer service, to utilizing new and innovative mobile technologies to close sales. These are strategies dealers can employ not only to adapt to this new reality, but also to emerge stronger despite the growing competitive landscape.

 

Remain Laser Focused On Current Customers

Focusing on current customers sounds basic enough, but the reshaped market should serve as a wake-up call that the status quo for customer communications no longer cuts it. Cable and telecom providers enter the market with gigantic install bases numbering in the millions, customers they can access and market to through a number of touch points, including billing inserts, direct email and TV programming messages. They are already using these channels to promote a broad offering that includes home security, automation and energy management services.

Security dealers have been able to offer these same services for years, and those dealers that have integrated these solutions into their offering have had a first mover advantage in the market.  But, if the dealer is not communicating the complete solution, including interactive services, energy management, automation and video monitoring, existing customers will form an incomplete and inaccurate picture of what is available. These customer touch points can include email newsletters, Facebook pages, as well as print billing inserts.  This could leave the dealer exposed when cable and telecom companies are communicating a whole home monitoring solution that the dealer’s customers may not know they already have access to.

Increasing engagement with customers can create goodwill and opportunities to upsell new services. This is crucial, because many consumers evaluating new home security offerings from cable and telecom companies are concerned by lingering customer service nightmares and perceived low quality of service.  This is an advantage for security dealers because customers may be hesitant to shift an additional service to cable or telecom companies if they are pleased with the security dealer’s customer experience.  But customers must be aware that the dealer can offer the same, or even better, services than the new competitors.

 

Stay Connected To Market Trends

There have been some clear trends related to consumer interest in home security and automation services, and it’s important to tether to these growth areas.  The dramatic growth of mobile device adoption means that consumers increasingly rely on their iPhones, iPads, Android phones and other smart mobile devices for a broad range of day-to-day activities. This presents an opportunity for security dealers and integrators to deliver mobile apps that enable home control and monitoring to meet rising consumer expectations. Owning a security system no longer means a panel on a wall homeowners arm and disarm when going on vacation. It means the ability to leverage mobile apps to remotely control their security system, check event history, receive motion-triggered video clips, or adjust lights, locks and thermostats anytime a customer wants. 

Beyond mobile apps, consumers are seeking to become more active in managing energy usage. Research firm Parks Associates forecasts that more than 60 percent of U.S. households will have energy management technologies by 2022. Some consumers will adopt these tools because they are concerned about the environment, others will be driven purely by the cost savings that better energy management can deliver, while some will be drawn to home energy apps simply because they are cool.  Energy management represents a growth opportunity with the traditional home security customer, but is also a way to attract new customers to a home security and energy management solution.  Being able to deliver on this new area of interest will help attract and close new business.  

 

Recognize Challenge, But Embrace Opportunity

New entrants do create more competition in the market, but they will also provide some benefits by raising the overall awareness and demand in the market for these services.  The fact is that the large majority of U.S. households do not have a home security system, and as much as dealers try to reach all of these prospects, advertising and marketing budgets only go so far. Yes, competitor advertising raises awareness of that company’s brand, but it also generates broader awareness of the category.

Now, rather than having to spend considerable time and resources educating the market on basic services, security dealers can focus on key differentiators such as a dedicated wireless connection for enhanced alarm signal reliability, the integration of energy and automation services with the security platform, as well as the ability for consumers to monitor external factors such as severe weather and extreme temperatures.  Security dealers do not have to try and outspend these deep-pocketed new entrants, but can take advantage of the new opportunity that exists as consumers become more aware of interactive security, home automation and energy management services.  The key is for the dealer to make sure prospective customers know it offers a complete interactive solution and differentiate against these new entrants with a better solution and exceptional customer service.

 

Be Present Online

Referrals are a key part of growing a dealer’s business.  They are inexpensive and highly valuable ways to raise awareness and attract new customers.  Technology has created more and more ways for people to share and promote the dealer’s business to their friends. 

Word-of-mouth recommendations on home security systems from trusted friends and neighbors is still important, but this conversation has shifted from the front yard to powerful referral engines such as Facebook, Yelp, and Twitter. Organic searches around home security-related terms are up considerably over the past year; tangible indication consumers are using the Internet to research and purchase security systems.

Security dealers and integrators must establish a web presence to reach both existing customers and new prospects online.   Customers are online talking, sharing and looking for information whether a dealer is there or not.  Having a presence and tracking the conversation online is important for the dealer to remain a part of the conversation.  This strategy that encourages existing customers to share positive experiences with their connections can help attract new customers intrigued by the online content being shared.  With an increasingly Internet savvy customer base, it’s important to be a participant online.

The market has changed considerably over the past 12-18 months, evident by strong growth and a new competitive landscape. Security dealers and integrators that have, over the course of several years, built considerable brand power as trusted providers will have an advantage as the overall awareness for interactive services increases. By leveraging this asset and implementing the strategies outlined in this article, dealers can continue to grow their business and thrive in the current market.

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