Five Key Trends in Residential Security
Cameras are no longer a luxury for today’s security and home control systems. Forward-thinking dealers also are looking at opportunities in voice control and cybersecurity.
First came interactive security systems that customers could view and control using their smartphones. Then came thermostats, lighting controls, door locks and other devices that could be controlled through a smartphone interface. Increasingly, systems also are including cameras and some dealers are exploring voice control options through consumer devices such as Amazon Echo and Google Home.
As technology continues to advance, security dealers are finding new opportunities in residential security. Five dealers told SDM about the tactics they use to make the most of these and other opportunities and offered their take on five key trends we see in this area.
1.Interactivity and Home Control Are Hot — and Cameras Are Gaining Momentum, Too
National companies doing mass advertising have done the security industry a favor by raising awareness of interactive systems and home control, comments Randi Elrad, vice president of sales and owner of Gainesville, Fla.-based Crime Prevention Security Systems LLC.
“We’re very thankful to all the companies that do all these millions of dollars’ worth of advertising,” Elrad comments.
But some of these systems don’t include monitoring, causing some consumers to look for home control capabilities in professionally monitored systems, she notes.
Kevin Bish, vice president of marketing for Warrendale, Pa.-based Guardian Protection Services, agrees. “Interactivity lets the customer feel more strongly the value of monitoring, which is core to what we do,” he observes. “Receiving a smartphone alert that someone may be breaking into your home and then receiving personalized follow-up from Guardian’s monitoring center specialists underscores for the consumer the true value of monitored interactive security.”
Cameras increasingly are part of residential security systems. Trinity Wiring & Security Solutions of Manassas, Va., does a lot of security installations for builders. A whopping 90 percent of those installations include home control, and a substantial portion of the company’s residential installation include cameras, comments Brendan F. Armstrong, Trinity Wiring & Security Solutions president and owner.
Trinity has made a substantial investment to support interactivity and home control. The company has a technician on staff who is devoted to supporting systems with those capabilities. Armstrong encourages customers to add smart devices to their systems after the initial installation and the technician will step them through how to do that over the phone. If necessary, the company will send someone out to help.
“We want to take really good care of our clients and to manage the churn rate and customer experience,” comments Armstrong.
Several dealers, including Crime Prevention Security Systems, also have found great interest on the part of customers in doorbell cameras. Customers like the fact that they can see a person at the door even if the person doesn’t ring the bell but instead simply triggers a motion detector, observes Elrad, who adds that the doorbell camera is so appealing that it compelled some customers who were on landline systems to upgrade their systems to cellular to support it.
Connected door locks also can have strong appeal — particularly when Crime Prevention Security Systems’ salespeople take the time to explain that homeowners can give the central station a code for first responders, enabling them to quickly gain entry to the home in the case of an emergency and eliminating the need for them to break down the door.
Crime Prevention Security Systems differentiates its home control offering by providing an app that controls multiple types of devices, eliminating the need for customers to use multiple apps, Elrad notes.
2.Monthly Pricing Is Highly Standardized
More sales of interactive systems mean a boost in monthly recurring revenue. Generally RMR increases further when customers add home control and increases again when customers add cameras. When SDM asked dealers about their monthly fees, we found a high level of standardization.
Everyone who volunteered an answer said they charge $10 monthly for interactive capability, which covers manufacturers’ charges for cellular connectivity for the system as well as the use of the manufacturer’s cloud. Everyone also offered the same answer about home control; an additional $10 per month covers multiple devices and types of devices other than cameras. Cameras generally cost an additional $10 per month, which typically covers up to four cameras.
Dealers we spoke with generally look to cover their costs on home control and camera installations but don’t expect to make a big profit on the equipment sale, relying instead on making a profit on monitoring contracts.
3.A Brisk Market for Upgrades to Interactivity, Home Control
Dealers are enthusiastic about the potential to upgrade existing customers to interactivity and/or home control.
“One of the best ways to nurture a lifetime customer is to continue to improve their experience,” says Bish. “An upgrade to interactive services is part of this.”
J & J Security Services Corp. of Deltona, Fla., has been particularly successful in converting existing customers who don’t have interactive systems to that capability. In the past year, the company converted 60 percent of those customers, notes J & J President George Voll. The company achieved this through two key tactics.
J & J gives 60 days of free interactive capability to customers with systems that can support that capability but who aren’t signed up to use it. If customers have a system that doesn’t support cellular connectivity, the company will upgrade them to a new system without an upfront charge in exchange for a 36-month agreement that includes an additional $10 a month.
4.Exploring Voice Control
Perhaps the next step in home control will be voice control via digital assistants such as the Amazon Echo and Google Home.
Technicians for J & J have set up these devices for customers. If the customer has a maintenance agreement, this would be covered under that agreement, while those without a maintenance agreement pay the hourly rate for the service. Technicians also take care to discuss the vulnerabilities of these devices and the steps that customers should take to secure them.
Southampton, N.Y.-based Systems Design Co. has been giving an Echo Dot voice-controlled digital assistant to customers who buy audio or lighting control, notes Systems Design Managing Partner Curtis Cole. This promotion not only is helping to make sales, it also is giving the company insight into how customers use this capability.
Some employees also have Echo Dot in their homes, Cole notes. “We’re trying to define where it adds value and where it’s just a neat trick that people won’t want to use.”
Some dealers we spoke with said they eventually may sell voice controlled digital assistants, even though the margins on those products likely will be narrow. If customers use their systems more heavily as a result, that will help enhance customer satisfaction and reduce churn, the dealers note.
5.Cyber security Opportunities
Some dealers also are pursuing opportunities in cyber security. Systems Design, for example, is looking at selling a network security solution that customers would pay for through a monthly fee. It would be cloud-based and would use a combination of software and hardware in the home.
The goal would be to make sure network devices are secured properly — not just routers and personal computers, but increasingly devices such as voice-controlled digital assistants and smart refrigerators.
“As weaknesses are discovered, we would be keeping devices up to date,” Cole explains. “What’s safe now could be unsafe a month from now.”
Meanwhile, Crime Prevention Security Systems has begun offering identity theft protection through an agreement with a company that specializes in that area. The offering provides up to $5 million in restoration services, Elrad observes.
To support the offering, Crime Prevention Security Systems developed a Web portal through which customers can sign up for service; and the company has an offer for other dealers that enables the dealers to use the same portal.
As Voll puts it, security dealers are no longer selling security, they’re selling lifestyle. Are you doing everything you can to maximize your home control and camera sales? Have you explored voice control and cyber security yet? If not, this could be a great time to do so. n
Strong Focus Yields Positive Online Reputation for J & J Security Services
The experiences of J & J Security Services illustrate two important business adages: Reputation is critical to success. And so is focus.
Consumers increasingly rely on online reviews in selecting a security dealer. Accordingly, J & J has made it a top priority to get good online customer reviews. Just as salespeople are sometimes trained to ask for the order, technicians are trained to ask for the review.
Technicians are instructed to “make sure before they leave the house that every client is satisfied,” explains J & J’s George Voll.
“If we don’t get a review, we do a Q&A back to the client,” he says.
By focusing on reviews in this manner, J & J has garnered many good ones and according to Voll, the company has seen “high growth in sales as a result.”