How to Find Success in the Residential Security Market
Savvy dealers such as Maggie George are combining today’s “wow” technologies with “wow” customer experiences to keep customers and gain new ones.
oston-located Bain & Company surveyed 362 businesses, of which 80 percent firmly believed they offered an outstanding experience to their customers. The firm then surveyed the customers of those 362 businesses and found that only 8 percent of customers believed they were receiving an outstanding experience. Talk about a dramatic wake-up call. Just because you think you offer an outstanding customer experience doesn’t mean you are.
The customer experience is the sum of all interactions a customer has with a company and its products or services, many of which are often overlooked. From the first mailer in the mail box to the simplicity of updating billing information, it all cumulatively affects your customers’ opinion of your business. And it is one of the major keys to success in the current residential market. Customer experience is a decision to “wow” your customers from start to finish. That “wow” factor, combined with understanding and offering the connected home, staying aware of your strengths (aka security), snapping up new technologies, connecting with builders, and staying nimble in a fast-moving market of behemoth competitors will help dealers maintain and grow their share of the residential market.
The security industry has a strong focus on customer service (not to be confused with the customer experience). In fact when SDM conducted an online survey asking “What is the most important key to success in the residential market?” a dominating 54 percent of respondents said “Outstanding service.” Read the full results in “Customer Service Dominates ‘Keys’ Perceived to Residential Success” [on page 58]. The second closest key was lean, mean operational practices. But think about this: a 2 percent increase in customer retention has the same effect as decreasing costs by 10 percent, according to Emmet Murphy and Mark Murphy, authors of “Leading on the Edge of Chaos.”
While customer service is closely related to the customer experience, it is not the same thing, cautions Kristen Simmons, partner and customer experience architect at Lightswitch, an Orange County, Calif.-located company focused on customer experience management and design. “To have a great customer experience you have to have great customer service, but customers that are great at customer service don’t always have a great customer experiences because it is so much broader than that.”
Customer experience is every interaction with the company. “Succeeding in all those scenarios requires having a process in place so that you deliver in whatever scenario it is — offering the best your company possibly can,” explains Jim Boots, chief revenue officer for Central Security Group (CSG), Tulsa, Okla. His company defines the customer experience as “the moment of truth” and is constantly updating its processes and strategies to create the strongest experience in every situation. “Hope is not a strategy,” Boots says. Plan everything out and evaluate it constantly.
Quality, service and dependability (QSD) are just a baseline to having a pulse in business today, says Bob Maunsell, chief executive officer (CEO) of Security Marketing Guru and Electronic Security Group Inc., Boston. “QSD doesn’t lead to over-the-top, “wow,” knock-your-socks-off client experiences that turn your clients into raving, fanatical fans that refer their family members, colleagues and business associates to your security company.
Simmons sees most security companies focus on installations and sales calls. “Those are extremely important, but there are so many other things that go on with the customers dealing with the company. How is their interaction with the product? Do you check up on them 30 days after an installation to make sure they remember all the things they were taught in the tutorial? How do the calls with your monitoring company go?” she asks.
The key to success though is connecting your customer service to an outstanding customer experience and paying attention to those often overlooked details.
“We realize that to be successful, you must deliver a great customer experience. First and foremost we attempt to under promise and over deliver everything we touch. An example would be a client who wants to install some speakers in their existing home. When we meet with them we explain that there will most likely be some sheet rock repair and touch-up painting involved. This prepares them for the worst. Then when our technical staff installs the speakers without any damage the client is thrilled and cannot wait to tell their friends and neighbors,” says Dee Straub, vice president and COO, Structured Cable of VA, Richmond, Va.
Important keys to success in the residential space include quality of work — no call backs; timeliness of scheduling, offering a good, reliable product at a fair price and managing the customer experience throughout the process, emphasizes Maggie George, this month’s cover dealer and owner of iWired, Scottsdale, Ariz. “The customers that we enjoy have been customers for years — many of which continue to add or update products or services year after year. They come back to us because they know we will take care of them,” she shares.
The 'Other' Keys
Customer service and a strong customer experience isn’t the only key to success. Other strong contenders are:
Understanding and Offering the Connected Home: The connected home is a tidal wave at this point. Juniper Research predicts the smart home market will reach $71 billion by 2018 — up from $25 billion in 2012. Announcements of new entrants, new protocols such as Google’s Thread (read about it at www.SDMmag.com/google-launches-thread), and new products are happening non-stop. As customer preferences expand beyond basic security offerings, companies must adopt or die.
“Ninety percent of our residential sales include interactive services. It’s a driving factor in our success both from the perspective of profitability and of market appeal. The consumer is driving the momentum. Today, very few people want ‘just a burglar alarm,’” says Barry Bruce, vice president of residential sales, Guardian Protection Services, Warrendale, Pa., a privately held security company ranked No. 9 on the SDM 100 and the 2013 SDM Dealer of the Year.
The numbers are there to back it up, Paul Accardo, manager of marketing communications, LiftMaster, Elmhurst, Ill., tells SDM. “Forty-two percent of consumers find the connected home ‘very appealing,’ up from 20 percent in 2008, according to CABA and Harris Interactive Research 2014. We anticipate 16 million smart home systems added to the marketplace between now and 2017,” he adds, citing the Berg Insights Study 2013.
Stay Aware of Your Strengths: Security systems continue to be natural drivers for smart home systems, and a differentiator for dealers.
“Without a doubt, the end-to-end solution we’ve seen garner the most interest is the Honeywell Total Connect Remote Services offering. Interest has steadily grown as it has developed into a true platform that serves as the core of the connected home, and more recently, the connected business,” says Alan Stoddard, senior marketing director, Honeywell, Melville, N.Y. “Also, Total Connect is rooted in security — so while home and business owners greatly appreciate the ability to control home and building automation systems remotely, they also place a greater importance on safety and security,” Stoddard says.
Security, in fact, is a key reason homeowners decide to go down the path to a smart home. The 2014 State of the Smart Home Report released by iControl Networks, Redwood City, Calif., found that 90 percent of respondents ranked personal and family security as one of the most important reasons for using a smart home system — with 67 percent ranking it as the No. 1 reason overall. A more telling finding? One hundred percent of survey respondents said that failure to have at least some type of security capability in a home automation system was considered unacceptable.
Snapping up New Technologies: If you think the rate of technological change is fast now, well, just hold on. With millions of dollars of R&D poised to flood the industry from companies with very deep pockets, this could get interesting very quickly. Successful companies will surf the waves. Turn to page 72 and read “Residential Sizzle.” Lighting is one of 10 “hot” residential technologies for dealers to consider. Stay up to date, ramp up your research and evaluation schedules for new
products to add.
“I think there are some exciting things in store for the security industry, and the activity of Google, Apple, Comcast, and others will define the future of our dealers in many ways (good and bad),” says David Mayne, Resolution Products, Hudson, Wisc. Read more in “What’s the Competition in the Residential Market Up To?” available at www.SDMmag.com/competition-update.
Pick technologies that keep people engaged with their systems as stickier customers, but also choose technologies that can morph and stand the test of time. There’s still more to come, and to capitalize on those unknown technologies you have to start by choosing a platform that lets you adapt to “the new, cool solutions that haven’t even been thought of yet,” advises iControl Networks’ Paul Dawes, vice president and general manager, connect business unit. “The big difference between the connected home versus to the security industry is that it is not a closed ecosystem. It is an ecosystem that is going to grow by orders of magnitude and you have to be prepared for that,” he cautions. Watch a video at www.SDMmag.com/Dawes-Connected-Home.
The new technologies help freshen up the security offering and infuse a sense of “wow” back into the process.
“Security is not very sexy. You set the alarm and you leave. But the new technologies available today bring excitement back. Today dealers can customize solutions. At Lava Security, once we actually get into showing clients what they can do — they start looking at security completely different,” says Shelia Bayes, owner of Lava Security Solutions, Lexington, Ky.
Connect with Builders: Installations of almost every home technology increased or held constant from 2012 to 2013, according to the 12th Annual State of the Builder Technology Market Study released by the Consumer Electronics Association (CEA), Arlington, Va. Structured wiring was the most common technology installed in 2013 (78 percent, an eight percent increase from 2012), followed by monitored security (47 percent, up three percent) and home theaters (32 percent, up five percent). Multi-room audio (21 percent), energy management (13 percent) and home automation (12 percent) all saw increases. A new addition to this year’s study are stand-alone video surveillance systems (including pre-wire), which were installed in 8 percent of new homes in 2013.
Three in five builders (63 percent) say home technologies are more important to their overall marketing efforts than they were two years ago, further indicating growing consumer demand. This hasn’t always been the case, as George knows from personal experience. She started iWired in November 2000 and at that time had to convince builders, which were key customers, that structured wiring was essential to selling homes in the 21st century.
“We were basically creating a new category for residential new construction. Our initial advertising program included print and radio ads that introduced the benefits of structured wiring and warned buyers not to buy homes that were built without it,” she recalls. George and her team believed in the need for connectivity within the home. “Obviously the market has evolved substantially in the last 14 years, as we have. What began as a structured wiring play quickly evolved to include security, audio, video, central vacuum and home automation,” she says.
Industry dealer programs such as Authorized Integrators Network (AiN), which manages GE Home & Security Technologies, offers builder programs a simplified process, which it says reduces builders’ fear of home technologies. George is a board member for AiN and values the program’s support for building industry relationships. “Consumers are asking about home technology, and we’re giving national and large regional builders the opportunity to deal with one network [to provide those technologies] through our National Builder Program,” says AiN Group executive vice president Larry Wright.
Whether working with builders or one-on-one with a homeowner, be the expert, advises Bob Hana, managing director for Home Technology Specialists of America (HTSA), Barrington, Ill. Do your research, know the technology, and be available. It all enhances the customer experience, he says.
“The real key to success in the residential market is the customer experience; that is what provides long term sustainability,” Hana says. “Members of HTSA are the company that fixes it on a Sunday afternoon and are available. The majority of people simply want a reliable resource to go to when they have a question or an issue, and don’t underestimate the value of a real person answering the phone who can come help you right way.”
As the professionally monitored security market experiences double digit growth, new entrants — specifically the cable industry — are competing on price, so dealers can be successful in the market by highlighting personalized, responsive service that contrasts with the poor customer service experience of competitors, suggests Tom Kerber, director of research, Parks Associates, Dallas.
To succeed, combine “wow”-level service with a plan to actively let your customers know that you offer a complete range of home controls and interactive services, he adds. “Aggressively sell interactive services and home controls to improve the long-term value of your customers (RMR and retention),” Kerber advises. He notes that Parks Associates research shows that more than 59 percent of U.S. broadband households have some level of interest in safety, security, and convenience benefits enabled by security and smart home products.
Why? Because it makes life easier.
Making homeowners’ lives simple so they can come home and enjoy their little oasis is a powerful draw, Bayes says. “We’ve taken the romance and mystique out of everything — and people crave that. If we looked at everything as an experience as opposed to a transaction then any business would see their bottom line change,” Bayes says. A powerful customer experience changes everything. ?
Customer Service Dominates Perceived ‘Keys’ to Residential Success
SDM asked, “What is the most important key to success in the residential market?”
- Lean, mean operational practices (11%)
- The right marketing messaging (9%)
- The hottest technologies such as video, apps, and remote access (9%)
- Saving the right partnerships with complementary companies, including other installers, distributors and manufacturers (2%)
- A strong dealer program to participate in (6%)
- The right sales techniques (9%)
- Outstanding service (54%)
3 Tips to Evaluate the Customer Experience Your Company Provides
For every customer complaint, there are 26 other customers who have remained silent, according to Lee Resource Inc. You need to actually know what your customer is thinking. There are some immediate, easy steps you can take to examine your customer experience, according to Lightswitch’s Kristen Simmons.
1) Conduct a Net Promoter Survey.At exactly two questions, you can’t get much easier, yet you’ll quickly find out what are the most important things you can change in your company to improve the customer experience,” Simmons says.
Immediately start asking your customers the following:
- On a scale of 1-10 how likely are you to recommend our company and its products and services to someone else?
- What is the reason for your score?
Promoters are those who respond with a score of 9 or 10 and are considered loyal enthusiasts. Detractors are those who respond with a score of 0 to 6 and are unhappy customers. Scores of 7 and 8 are ignored.
You never know what the survey will turn up, she emphasizes. One security company doing the survey found out the wait time for getting a service appointment scheduled was bothering its customers. “It wasn’t necessarily that its service team wasn’t giving great service once they got there, it was the experience of how quickly they were available,” Simmons describes. “It wasn’t on the company’s radar to quickly address until they received all the feedback from their customers,” she adds.
2) Go to employees who are customer facing and poll them. Ask technicians, call center staff, customer service staff, and sales staff — the people dealing with customers face-to-face or person-to-person — the following question: “If you could change something or add something, what would it be?” They will have ideas from their interactions with the customers, and as a double bonus your employees will feel valued
3) Get senior management team closer to the customer. As you rise through the ranks you get further away from the customers. Get out there and listen in — listen to calls, go on sales calls, shadow an installation. Not only will you understand what your customer experience is like, but you are also demonstrating to your own employee base that you are engaged and informed.
Residential is Personal: 6 Keys to Building Relationships
It’s all about the customer “experience,” not just customer service. Learn about your customers, care about their happiness and satisfaction, and offer them appropriate solutions. Use these six keys to build a strong, long-lasting relationship to keep customers returning for future services and build your customer base.
1. It’s Not Just Customer Service Anymore; Build a Strong Relationship— You must look at the total customer experience and “wow” them with all you do for them. Get that smile on their face and the feeling that “there’s no one else I would rather do business with.”
2. “My Home, My Castle, My Domain” — Tailor the systems you provide for their family members and lifestyles. Identify their anticipations for value pricing, service and exceed their expectations.
3. It’s an Ongoing Dialogue — Make a long-term commitment to the relationship and keep the conversation active. Ask how things are going, share new information, gather feedback, listen and respond. Repeat often.
4. Professionalism— Make sure your team delivers the image and experience you want to have happen. There’s only one chance to make a good impression. Be prepared by following these guidelines to enhance your delivery, acceptance and customer experience.
a. Appearance— Provide company-branded vehicles, uniforms, and establish a dress code.
b. Respect — Preach, practice and instill respectful attitudes in everything done in the company and for customers.
c. Appreciation — Everyone, customers and team members included, like acknowledgement and gratitude.
d. Prompt Completion— Complete a job before moving to a new project. Gain your customer’s happiness in a timely manner and don’t leave 2 percent hanging out there to be finished “sometime.”
5. Attention to Detail
a. Write it Down— Keep detailed records and date all documents.
b. Aesthetics — Make appearance a priority on all projects. Instill pride in technicians for their work.
c. Follow up— Identify action items and follow-through. Empower your team to value and keep promises.
6. Be the Trusted Advisor
a. Know Today’s Industry— Be “in the know” on current shifts, innovations, trends and new options in the industry.
b.Share Often — As part of your long-term relationship with your clients, care about their lives, communicate at least four times a year and share the innovations you’ve seen and learned.
Contributed by Helen Heneveld, Bedrock Learning
One of the first and foremost keys to an outstanding customer experience is your staff, says Stuart Forchheimer, HS Technology Group, Baltimore. “For so many years we were hiring ‘qualified technicians’ but then we realized we needed to start focusing on the person themselves. Obviously they need the aptitude to learn our technologies, but they have to be made of the ‘right stuff,’ and we can’t teach them that. Hiring this way requires a lot more time and money to offer training and staff development, but each team member that communicates with our clientele leaves an impression and everyone knows it only takes one bad experience to break the chain, thus the need for continued training,” Forchheimer says. Read the full interview with Forchheimer, including his take on the hottest technologies in the residential market at www.SDMmag.com/Forchheimer.
Dive Deeper Into the Low Voltage Market
Looking to expand your possibilities or overhaul your organizational processes? A recognized industry expert who speaks and consults worldwide in the converging home systems industry, Bedrock Learning’s Helen Heneveld, MBA, CEDIA Installer 1 Certified and CEA CompTIA DHTI+ Certified and past member on the CEDIA board of directors, is partnering with SDM and smartHOME for a four-part Webinar series giving you all the trade secrets to success.
August 2014: Trends Transforming Low Voltage Business
September 2014:Internet of Things (IoT) and Wireless Opportunities
November 2014:Putting Your Customers in Control at Home and Away
December 2014: New Low Voltage Offerings that will KEEP your customers…and increase your RMR
Must Do’s to Stay Competitive
The residential security market is getting more competitive by the day. With new entrants and new technology to contend with, it’s a challenge to just keep your existing customers, let alone consistently grow your business. Fortunately, there are a few “Must Do’s” to help you remain competitive and to continue succeeding in the residential market.
- You must replace your 2G (GSM) cellular products now. In 2011, Telguard, in collaboration with SDM, sounded the alarm to the security industry about the 2G (GSM) Sunset that was going to take place in the near future. Read more from SDM about creating an action plan at www.SDMmag.com/2G-Action-Plan. Well, that Sunset has started and it will affect your GSM install base — if it hasn’t already. Shortly after sounding the Sunset alarm, Telguard and others launched upgrade incentive programs that reward dealers with a monetary incentive to help alleviate some of the costs associated with upgrading GSM customers. Since the launch of Telguard’s Upgrade Incentive Program in 2012 (www.SDMmag.com/Telguard-2G-Incentive) , thousands of 2G (GSM) cellular communicators have been replaced with new ones for 3G/4G or CDMA networks. But there are still millions to replace, which indicates a high level of procrastination in the industry, even now, a little over two years away from the official Sunset date of December 2016.
- You must embrace technology. To remain competitive you must have a complete portfolio of products to meet the needs of all customers, regardless of their location. At this point most security dealers should be installing products that leverage 3G/4G and CDMA networks, to ensure longevity
- You must offer home automation with every residential system. Today consumers are bombarded with commercials and ads for home automation services. As a provider of life safety solutions, lifestyle services seem like a logical inclusion to your standard sale. Now the home automation add-on is easier to offer given that costs have dropped for bundled security and home automation features.
- You must stick to your roots. You are an expert in security; use that to your advantage. Selling home automation from the security perspective, i.e. placing a camera in your entryway so you can remotely see who is at your door, can be a very compelling complementary sale.
Contributed by Shawn Welsh, vice president of marketing and business development, Telular.