The New Age of Working With Builders & Their Buyers
If you tried working with home builders in the past, you may have found it a frustrating experience. But many of today’s builders are a new breed; and those dealers who stuck it out through the downturn are finding a whole different business climate.
“In the past, builders didn’t really appreciate the scope of the smart or connected home,” says Kris Kaymanesh, president, Sight & Sound Systems Inc., Dulles, Va., who is featured on this month’s cover. “Since the downturn, they are realizing they have to go ahead and embrace technology. It is not a question of whether they want it, but when they are going to have to embrace it. It has been quite a change over the last 24 months.”
Kaymanesh has seen a huge shift in expectations in his 22 years in the business. “The most frustrating part of our business in the past was to convince builders they were hurting themselves by not embracing technology,” he says. Now, they get it.
There is a reason for that, says John Galante, president of AE Ventures, Easton, Mass., a media and event producing company that services the home building market. He describes it as a “sea change” when it comes to builders and technology.
“I have been tracking this facet of technology and home builders for decades. In the mid-2000s with the huge home construction boom they were only really interested in structured wiring systems. During the great housing depression beginning in 2008, they went down to building one-quarter of the homes they had been and it stuck there for a while. What happened with technology between 2008 and when they started to peak their heads back out in 2013? The smartphone barely existed in 2008. Things had changed considerably and I think they realized they need to do better against existing homes in terms of market share, and technology can be one of the arrows in their quiver.”
Desiree Webster, marketing communications manager, Legrand, West Hartford, Conn., says buyers are ultimately driving builders to take a second look at technology. “Even though we worked with builders before, the majority were extremely hesitant prior to the recession to engage in anything ‘technology.’ Sales were going gangbusters, so they didn’t really need to expand their mindset. What we saw through the downturn was that consumer spending shifted and the one thing they continued to spend money on was technology. That was when the iPhone really hit big. We have come out of the recession and now every consumer is expecting technology. For builders it is a critical, pivotal point that they will start to have to look at hard and understand what buyers are looking for,” she says.
In fact, in a December 2014 Market Pulse Survey, TecHome Builder/AE Analytics found that 89 percent of builders agreed with the statement, “Our company is substantially more interested in offering innovative technology options and amenities in our homes than three years ago.” And a whopping 92 percent felt that “innovative technologies and amenities can provide our new homes a competitive edge versus existing homes.”
Tom Yesowich, president and CEO, Vitex Home Automation, Naples, Fla., has been in the business for 35 years and used to refer to security as the “Trojan Horse.” He, too, has seen a change, not only among the builders, but also in his own mind and those of the buyers themselves.
“We would wire the house for cable and phone, then sell the security system to the buyer, which was our main focus. When we got into audio it was the same. What is happening today is similar, but different. My focus has always been RMR and most of my career has come from the security industry. We were charging people to monitor their security systems through our central station. It was always security first and when it came to audio and other products it was kind of a necessary evil to get the recurring revenue. Today, the Trojan Horse is home automation. Security happens to be one of the things it does, but by connecting all of these other devices we can justify our monthly fee to customers.”
Today more homes at all price points are being built and sold with at least some level of technology and automation packages. It is no longer the million dollar homes and up that have the $20,000 home automation and entertainment packages. Even 20-something condo owners are expecting it. In a Better Homes and Gardens Real Estate survey of 18 to 35 year olds, 56 percent ranked home technology as more important than curb appeal.
For dealers, it is indeed a good time to be working with builders. Yesowich says working with builders has been difficult in the past. “For 35 years I have been trying to teach them how to make money off technology and for most of that time they didn’t get it. Today, thanks to technology advancements and all the advertising around home automation from the DIY space (see sidebar, page 68), builders are looking at us and saying, ‘We really have to do this and we don’t know how. Now working with them has become a joy because when we show them how to do it, they listen. That has only happened in the last few years. It is a much different ballgame today.”
But for all the good news, there are aspects of working with builders that haven’t changed and working in this market can be a unique and sometimes still frustrating exercise. A solid understanding of the technologies and trends, as well as how to work with the “new” builder and buyer are the keys to making it a more profitable venture today.
The New Technologies
Like smartphones and other fast-paced technologies, home automation technologies seem to change every few months. It can get confusing with so many choices in the industry today. Guiding the builder and buyer through the wide array of choices and options is the dealer’s primary job. And increasingly, security (once the bread and butter of most dealers) is only one part of a much larger ecosystem that involves technologies as varied as automated blinds, lighting control, and sound systems.
Of the technologies ranked in the TecHome Builder study, LED lighting, structured wiring and smart/connected thermostats topped the list of technologies predicted to be included in homes by 2016 (see chart on page 59). But alarm systems, lighting control and home automation were also highly ranked, with more than half of builders planning to include them in their 2016 homes.
This is a trend Todd Girdis, executive director for business development, GE Home Technologies and managing partner of AiN Group, Chesterfield Township, Mich., has noted. AiN Group is a national dealer network that brings dealers together with national builders (see Q&A online at www.sdmmag.com/builders&buyers-Q&A).
“There has been a pretty significant shift. A year ago builders were still talking more broadly about categories of home technologies like structured wiring, whole house audio, surround sound and whole house vacuums. Fast forward to this year and they only want to know about home automation, lights, locks, thermostats and our ability to integrate those into smart devices like tablets and mobile phones. That has been a huge ask this year.”
Kaymanesh describes his company as a licensed security company that provides security as just one of multiple legs of integration and automation. “We are not a security company that happens to also offer a couple of other options. Security is one of multiple different legs.”
Security is important, but what is driving the market today are all the smart devices, Yesowich says. “Buyers want smart thermostats, lights, locks, all of the home automation technologies. When we talk about security we don’t even talk about alarms anymore. We have removed that word from our vocabulary. Instead we talk about how the user is connected to the home by the doors and windows sending you a notification. It isn’t about a burglar being in your home. It is more about being connected to your home.”
The lead-in is now reversed, but that doesn’t mean security is taking a backseat. It is now part of a suite of security-related offerings, many of which come under the home automation umbrella, Girdis adds. “It used to be security was the lead and then you could add lights and garage control. Now builders and buyers are saying they want those to lead. ‘But can you still do security?’ There are still a large percentage of people that want that peace of mind.”
In fact, a recent State of the Smart Home report from Icontrol Networks found that security is still the number one factor driving mass-market adoption of smart home technology. “This year’s report found that 90 percent of consumers still believe security is one of the top reasons to purchase and use a smart home system,” says Alan Patterson, director of marketing for Icontrol One. “Today’s interactive security and home automation systems pick up where traditional security left off — enabling ‘security-based’ use cases ranging from simply arming/disarming the system remotely to viewing the live video of a visitor at the front door and then deciding whether or not to allow them access to the home.”
Now that home automation has gone mainstream and builders and buyers are clamoring for it, the next step technology-wise is to go beyond the interactive home to the fully automated home.
AiN dealer Jack Rainey, general manager, Chesapeake Systems Service, Annapolis Junction, Md., calls it Boolean logic. “The if and then language where one event can trigger a number of others — that is automation. That is the piece we feel is ultimately more durable and interesting to consumers. Control wears thin very fast. It is cool and space-age and fun, but ultimately of little value for many customers. How many times do you have to remotely arm and disarm your security system? Sometimes you don’t even know you have driven away from the house and it is not armed. It is much more compelling to get a text notification saying the system is not armed. That is the fun stuff and what we feel will really make these alarm systems much more sticky in the long run.”
Kaymanesh explains that the newer smartphones use Bluetooth LE technology that allow a homeowner, when they get close enough to the house to have a virtual handshake that knows they are there and what to do next. “The garage door automatically opens, the security disarms and the lights come on and they haven’t pushed a single button. Things like that really appeal to the new buyers,” he says.
“We are now starting to take away the idea that you can do things from a cell phone,” Yesowich says. “That is yesterday’s news. We think the next big thing will be full automation where the house will know where you are, know what time of day it is and everything will start happening automatically without you doing anything.”
A New Way to Work With Builders
In the past some builders may have been reluctant to let security dealers meet directly with the customer. Today that mentality is shifting, but dealers have to know how to work with the builder to provide a mutually beneficial relationship.
“Integrators who want that interface with the home buyer need to think about what they are doing to earn that trust,” Galante says. “It comes down to the concept of being a business partner. Are you providing the best experience in discovering the customer’s needs and preparing something the builder will be comfortable with? Builders are reasonable business people like anybody else. If they see this as additive to how they present the package to the home buyer, they are willing to do that.”
Some dealers work through the builder’s showroom; others, such as Sight & Sound, have their own facility set up to showcase and explain exactly what the technology options are.
“We provide the basic standards through the builder, but we have full accessibility to their clients to provide them with more options,” Kaymanesh says. Every client their builders sell a house to comes through his showroom.
Design centers are important, says Avi Rosenthal, vice president of security integration, Nortek Security and Control, Providence, R.I. “The best dealers set up technology meetings with homeowners during the build and design. My advice is to get in with the design center professionals. Those are the gatekeepers to the home buyers.” Nortek often helps dealers set up a design center, he says.
Meeting directly with buyers helps keep the builder out of the “aggravation loop,” Kaymanesh adds. “We keep them involved, but focused towards profit and margin. We achieve this by providing an intuitive web portal for our builders where they can review all the details to each lot, including the average profit per community or total profit. They really like having the easy access to collect information when they need it.
“[When meeting with buyers], we price the packages where we think the homeowner can afford it. We meet with the clients, and provide X proposal for X dollars. Since we do interact with the homeowner, down the road if they have service issues they know to contact us. We educate the builders that they won’t have to get involved in it. Builders want to build houses as cost effectively as possible. Since technology is the most confusing part of the home-buying process, they tended to shy away from it in the past but realize these days that it is not an option.”
Yesowich finds that builders are much more open to letting him meet with buyers than in the past. “Builders have evolved to the point where they understand that it is not just a security system anymore. They understand homeowners need a relationship with a company like ours. They are letting us establish that, not only during the building process, but also after the fact, because they realize without that relationship, the customer will come back to the builder upset.”
The builder’s biggest fear is that a buyer will call them after the sale, for example at 9:30 on a Friday night in a panic because they can’t figure out how to work their smart TV. “Builders want to be reassured that we will provide the after-sales support,” Yesowich says. “When a customer moves into a home, they need a lot of hand holding. The builder doesn’t want any bad will coming back on them. Dealers who are used to putting in a security system, showing them how to use it and collecting the RMR, that isn’t going to work. With home automation you are involved with that customer forever.”
Some dealers do a portion of the job through the builder — the basic package — then sell the customer directly on higher options later. “A lot of builders are very fearful,” says Greg Haupert, sales and marketing director, Sierra Integrated Systems, Reno, Nev. “They have been building walls and roofs forever and they know exactly how it works. They don’t understand the GUI interface and tech trends, nor do they want to. That is why we do the contract up front for the pre-wire, then direct contract on that new home — not through the builder — which is what you would think they would want. I do it that way because the builder believes it avoids that late-night phone call.”
Other dealers feel that working through the builder as much as possible is a way to maintain good will and build trust.
“We try to focus the majority of the work through the builder, not after the fact,” says Ross Theriault, vice president of sales, HomePro, Dallas, a Honeywell dealer. “If they can get it and roll it into the mortgage, all the better.”
Most builders contract for a relatively modest package of structured wiring and a few basic options, Rainey says. “Most will contract us to do a standard alarm system. After that [homeowners] can buy upgrades within the builder warranty period. It ends up being exactly the same price they would have bought it in contract. There is no discount for an after settlement purchase. We try to keep the builder in on all possible profits to keep good will. We understand our margins are not as strong as those on carpets, tile, etc. Electronics don’t have as strong a margin that I can share with the builder, but we do pledge that we won’t play games with it and sell the customer as much as possible after the fact.”
One of the focuses of TecHome Builder is educating the builder about the difference between a security dealer and their other vendors, Galante says. “We have to educate the builder that technology is not like the other products in their home. They can’t create a relationship similar to the purchasing of patterns and lumber. They can’t bring that mentality to technology. It is strategic and it has to have some margins.”
Technology also touches several of a builder’s other vendors, so working with trades such as electricians and HVAC also becomes important for the dealer.
“We have a project manager assigned to identify who the other subs on the project are,” Haupert says. “Sometimes we have the HVAC guy just run control wire to where the thermostat location is. Ultimately we want to make sure there is no finger pointing that the thermostat doesn’t work. Often having them install a cheap $3 thermostat to prove the zone works and go back and install the smart one later is the best way. The same goes for electricians and lighting.”
Kaymanesh provides lists of brands and models of smart hardware the builder and their subs can substitute that will work. “Instead of the door people installing something we have to take out, we say to the builder, ‘Here is the exact model and take it to your door people.’ We are working with the various tradespeople to let them know we aren’t trying to take business away from them. We are actually providing them an opportunity to make a little bit more money.”
This method also benefits the dealer, he adds. “The one who touches it last, owns it. If we are the last one to touch the thermostat, the homeowner thinks we can fix their air conditioner when it is 95 degrees in the summer and it won’t come on.”
Theriault also subscribes to the method of having the HVAC or other contractor install the right equipment in the first place. “The angle we are taking now is we don’t want to take business away from the electrician or the HVAC guys because that could void warranties. We have them install one of the recommended thermostats.”
All of this is a reflection of the most important thing in working with builders — relationship, relationship, relationship.
“The key is to be a partner for the entire business process associated with this,” Galante says. “Just because you can execute this technically doesn’t mean you do a good job of partnering with the builder and selling those technology features. The technical piece needs to be there, but so does performing on the builder’s job site. Be there at the right time based on construction flow. Communicate with the builder about what is being done for that customer. Be a complete partner from the process perspective.”
But relationships are a two-way street, Haupert adds. “The builders we work with are the ones where we trust each other and we have the best relationship. They know they can call me and say, “The Johnsons are ready to go. Go get them. Then they turn it over to us and let us do our thing. We work best with the builders we have good communication and trust with.”
Kaymanesh agrees. “It is really very important to cultivate those [good] relationships. Yes, all builders are after the best price but that is not the only factor. I have had repeated experiences where builders found someone else who was a couple of dollars cheaper, but after six months or a year, they had horrible experiences. They, too have learned that price is not the only thing.
“My personal belief is that you don’t have to drop your price to win a builder. You win by your integrity and the image you portray. The days of the used car dealer mentality are over,” he says.
Kaymanesh also stresses that dealers who want to succeed in this market have to be strong in customer service and relationship-building skills, a lesson he learned several years ago when his company was called to install a satellite dish the customer had purchased elsewhere.
“The customer had bought it and had gotten our name from the show that sold it, so they called us. We went out to that job site and did the install, even though it was a basic $199 job. Throughout the installation everything that could have gone wrong did, with missing parts and other obstacles. We still finished the job in the time we had promised. Once we explained that to the customer, he gave me his card and said to come talk to him tomorrow. It wasn’t until I went to his office the next day that I discovered he was the owner of a large, local home building company. That $199 job ended up being worth $7 million in projects over the next several years.”
The New Buyer
Builder attitudes have changed, yes. But so has the market. One of the most significant shifts post downturn has been the convergence of buyer demand for technology with the price of connected technology consistently coming down to a more affordable level. The days of home automation being just for the top-end homes are over.
“I have been surprised,” says Mike Hackett, senior vice president of sales and marketing, Qolsys, San Jose, Calif. “The security industry has been a bit pessimistic about the mass marketability of the smart home. But now there is a lot of interest in the $200,000 to $350,000 range homes. These builders want smart homes, too. We are seeing 1,400 square foot, three-bedroom homes that builders want connected, which has been very validating for us and a nice surprise to the broader industry. The higher end custom home market left many dealers out of the market. As it comes downstream, more dealers are being exposed to the opportunity, and that excites them.”
As a demographic group, Millennials are just starting to be a factor in home buying, but when they do look for a home they want it connected, he adds. “Home buyers today, if they are 25 to 35, have been on Facebook half their life and on other social media. They live on their smartphones. The inherent expectation is that their home will be connected to their phone. The days of ‘let’s get two devices in there and see what the take rate is’ are over. The more connected, the greater the take rate.”
In fact, the Icontrol study found that 79 percent of buyers 25 to 34 say they are excited about the possibility of incorporating smart home features into their home (compared with 50 percent of the overall population). And a Realtor Magazine study found that 30 percent of Millennials will buy a home in the next five years.
On the technology side, things continue to come down in price as well, Haupert says. “A 60-inch TV five years ago was 10 grand. Now it is $800. It is that way with everything and home technology continues to move from the high end into semi-custom neighborhoods and subdivisions.”
This is good, because in addition to expecting technology, younger buyers want value, Kaymanesh adds.
“Typically your 50-plus homebuyers are not on their first or even second home and financially they want something that is somewhat elaborate. But the newer, younger generation are more Web savvy and thirstier for the connected, smart home. They are interested, but looking for value propositions. That is why this industry is gravitating towards products that are not in the thousands, but hundreds.”
For dealers like Kaymanesh that have been in the business for a long time, this has also required that they go out and forge new partnerships with manufacturers that offer products specifically for this price point. “We are an authorized dealer for several brands, including Control4, Crestron and Total Control. Those are the typical [high-end] brands. Resolution Products recently introduced a product called Helix that we found for its size to be extremely capable and intelligent.
“About four years ago these technologies would cost well over $50,000 to even think about incorporating enough intelligence. Now you can buy all of these under $1,500,” he describes.
These products are becoming affordable and a standard offering, Theriault adds. “As pricing starts to come down we are able to offer better products and packages without a cost increase to buyers. The more value we can show them, the more likely they are to buy.”
What’s more, even though there is a lot of talk about Millennials, Theriault sees all age groups come through his showroom. “You really can’t pre-judge them when they walk through the door. The oldest generation are a hard ‘no’ most of the time, but they do like the convenience features. It’s like smartphones. Those aren’t just bought by Millennials. The ability to use a smartphone means the ability to use a connected home.”
New Profit Opportunities
With all of the changes in the home automation market, more products, lower pricing and much more interest, how profitable is the builder market today for the security dealer? And is this a good time to get into the market if you aren’t already?
“The builder market today — and it has always been this way — is not profitable from an operational standpoint,” Yesowich concedes. “The builders dictate what they will pay for their standards. It is the option sales we are able to tack on that are profitable and make up for the money we lose on standard options. The builder channel is break-even at best, but what you get is the recurring revenue. That is really what it is all about.”
Profit margins are not high in this industry, Kaymanesh adds. “If there is any market that suffers from lack of margin it is electronics. Products can be easily shopped and it is not as profitable as it was a few years ago. That is why we have to work smart and more efficiently to retain enough margins and profit to sustain a healthy business.”
Rainey says this market definitely isn’t for everyone. “There are a lot of traditional security companies who look at us and say, ‘I tried it and would never do it again.’ If you think you will become immediately successful you are mistaken. It is hard to do what we do. You have to live through some agony and there is a learning curve. Because of that, though, companies like us are pretty highly valued because we are experienced in working in new construction. We get a lot more interest from the builder than someone who has not done that kind of work.”
Still, for those interested in exploring it, there are a host of new opportunities out there, Galante says. “Our vision of home technology [involves] product families within the home that are much smarter and more connected than they ever were before. There are emergency generators on the roof, LED lighting, smart load centers. HVAC is more than just a communicating thermostat; it also can include air freshness and humidity monitoring. Washers and dryers are providing alerts. There is a need and an opportunity for dealers to step up and be the quarterback of multiple trades. In order to bring more products and systems onto the network, it is going to be an opportunity for more players over time.”
Legrand’s Webster agrees. “Yes, it is a good time to get in. Homes are being built and builders know the home buyers. There are a lot of builders who don’t have a technology partner they are actively working with and home buyers are looking for that technology.”
For any dealer in the builder market, it is not about the margin percent, but rather about volume driving profit margin, Icontrol’s Patterson adds.
“I would get into it if I thought I could achieve the business process alignment,” Galante adds. “If I had the sophisticated selling, marketing and customer care required. It is different with high volume than luxury. I definitely think there is opportunity there. It is about creating a long-term customer. And if you tried this as a dealer 10 years ago, your experience now will be different in terms of builder acceptance of technology and their willingness to work with you.”
Kaymanesh, who stayed in through the hard times, agrees. His company is just getting started with the lower-end/higher-volume products, but ultimately he sees it as a winning move. “It takes time because we have to educate and meet with each individual home buyer. This price structure is quite new in the market. We actually are doing a lot more quantity of these lower price point connected homes; however, our dollars are still more focused towards the conventional systems. It takes about 10 to 15 of these to make the price point of our Control4 line.
“It is a question of feast or famine. We realize that, yes, there is less profit per ticket but if it is at the point where multiple builders and buyers are opting to say yes to us, in the long run we have not put all our eggs in one basket. Come another downturn, we will have ample clients to sustain our business.”
SIDEBAR: The Lean Years: How Dealers Weathered the Downturn
Anybody looking from the outside at a dealer with 75 percent or more of his business tied up in new residential construction has to marvel at how that company stayed in business over the past few years. Many didn’t make it; but those who did all say it was a growing and learning experience that made them not only stronger but smarter in the end.
“When the housing industry stopped because of all the loans and foreclosures, we saw an immediate 70 percent decline in business,” says Tom Yesowich of Vitex Home Automation. “We had to downsize, let a lot of people go and sell off the fleet. If we hadn’t had the recurring revenue from the homes we had done previously, we would probably have gone out of business. Instead we rode it out and actually expanded. We went into new markets and started talking to builders outside of our immediate area. We used it as an opportunity, and our business, when it came back after about three years, was five times the size it was previously. We really grew.”
Ross Theriault of HomePro says his business also grew during that time. “We went out and found new things. The downturn forced us to wake up and put a lot more attention to growing and finding other revenue streams.”
Greg Haupert of Sierra Integrated Systems considered himself very lucky to have some custom home business at the time, although he did feel the pinch. “What we noticed was that the low end construction completely seized up, but some of the super high end and custom work did not. We continued to go forward, albeit at a much slower pace. We had to be more aggressive with builders. Our revenue was almost half of what it had been. We also did a lot of commercial work and diversified.”
Kris Kaymanesh of Sight & Sound discovered that no job was too small. “There wasn’t a single line item that made us. We became extremely proactive and took jobs no matter how small they were. Even if they were only 2 or 3 percent profit.
“When times were good we thought we were really good. Then reality hit. We hurt very badly because we had a lot of our business in the builder revenue side. We almost didn’t make it. It took a lot of sacrifice from myself down to every employee. We did not lay off a single person and those who stayed worked with us. I can tell you the downturn really hurt us but it made us a much smarter operation and making it through brought us a lot of credibility with our existing builders and all the new ones we are developing relationships with.”
SIDEBAR: BYOD & the Builder
In the commercial world, the bring-your-own-device (BYOD)-to-work discussion is just starting to ramp up. But on the residential front it is assumed that most if not all homeowners have some sort of smart device and they want to use that to interact with their homes. That, combined with lowering technology costs across the board has driven the home control trend.
“Builders want solutions that add professional value but don’t cost a lot of money to source or install,” says Greg Rhoades, director of marketing, security and automation, Leviton Manufacturing Inc., New Orleans. “For instance the ability to provide a distributed audio system that’s built into the home, yet allow the new homeowner to simply use their own devices like laptops and phones to stream music throughout the property adds a high-tech selling feature, but doesn’t require the addition of component equipment.”
Steve Means, district manager, Honeywell Security Products Americas, Melville, N.Y., adds, “Builders are in the business of selling homes, but they must figure out ways to sell more homes than their competitors without incurring significant costs. Many home automation technologies have become more affordable in recent years, making it possible to offer smart home solutions at reasonable price points to the masses. Because the majority of homeowners in most markets today have smart devices they could control their smart homes from, it is a very seamless interface.”
eMarketer, a digital strategies market research firm, notes that in 2016 there will be 198.5 million smartphones in use in the U.S., with that number rising to 211.5 million, or nearly 65 percent of the country’s total population by 2017. In addition, by 2016 there will be 162.7 tablet users.
SIDEBAR: DIY Meets Apple & Google
Some of the biggest home automation trends materializing today aren’t coming from dealers, but may ultimately benefit them anyway. Giants Google and Apple are publicizing DIY products and new systems, increasing awareness for all, including builders.
“The media has a lot to do with what consumers get buzzed about,” says Todd Girdis of AiN Group. “In the past year we have had companies like Google and Apple coming out with home kits and that seemed to light a fire in these builders to feel like they needed to get up to date more than they were.”
Ross Theriault of HomePro sees this as a positive thing. “Unlike some of my competitors I am really excited about Apple Home Connect because it is going to create more market awareness and we just need to be the best service company to install it. The big boys are out there spreading the message and getting us past the early adopter stage. We always had to explain from the ground up what automation is. Now they know what it is.”
Tom Yesowich of Vitex Home Automation thinks DIY is a great thing for the industry. “We embrace it. We are glad that companies like Apple are talking about it all the time. Customers are confused. This tells them, ‘Here is what you do.’”
DIY can be an opportunity for the dealer, says Neil Evans, senior product manager for hybrid intrusion, Tyco Security Products, Westford, Mass. “The homeowner may do basic stuff themselves, but professional monitoring is where the dealers will come into it. It can be a huge opportunity for the dealer to be an add-on to the DIY solution for monitoring.”
If working with builders is a relationship-building exercise, how can dealers build those relationships with national builders that operate in vastly different markets, but are looking for consistency? One answer is a national dealer network like AiN Group. SDM spoke with Todd Girdis, executive director for business development, GE Home Technologies and managing partner, AiN Group, along with one of the AiN dealer/integrators, Jack Rainey, general manager, Chesapeake Systems Service, to find out more about the program and its benefits for dealers.
SDM: What is AiN and how does it work for the builder and the dealer?
Girdis: The AiN builder program brings together manufacturers and a national installation dealer network. We have leading [home automation] companies like Bose, Legrand, Interlogix, Nortek, HP and Dirt Devil as the core manufacturing partners in the builder program. These are then backed by the GE brand, which gives a lot of recognition and trust to home buyers. For builders that is important because it will result in higher selection rates by homeowners.
For our dealer members it is a free, exclusive benefit of being a member. We market this program to builders to get them interested in these brands and the packages we recommend. If a builder is interested, we then introduce our dealer member to that builder. We hand off the opportunity and are there to support them in winning that business with the builder.
SDM: As a dealer, what does the AiN program bring to you?
Rainey: We are looking for a model that gives us consistency in product and offering across the nation. We feel it differentiates us from most integrators across the country who are developing their own solutions, which confuses national builders. We want to develop standard in product and methodology so national builders can say this is my national program.
Most of the products and offerings we have developed on our own mirror the offerings that AiN is developing for the national scale. Depending on the builder and what they desire of us, we will have those local builders comply to some degree with that national model. Local guys by the fact of being local like to differentiate themselves in some way, shape and form.
SDM: Are there other groups like this?
Girdis: There are other groups like HES or some buying groups, but we are the only one that, for our dealer members, is exclusively trying to target to national builders. It makes it easier to get to the builders especially on a national level. Difficult for a builder to find a dealer group.
SDM: Do your dealer members have to work through AiN?
Girdis: As an AiN dealer member, they can market to any builder.
Rainey: AiN is just developing their national builder presence. We certainly participate and are very active within AiN, but all our relationships are still local relationships. We are actively working on the national model.
SDM: What advice would you offer dealers trying to work in the builder market?
Girdis: Our advice is to consider being a member of AiN Group. It doesn’t cost anything to join. This is a free benefit. We are working on their behalf to capture builder opportunities for you. This gives them the ability to use the GE brand to open doors with more builders than what an individual dealer can do on his own.