August 1, 2017
Many dealers are starting to look at the DIY space with increasing interest — and vice versa. What will the impact of the DIY model (and related spins such as MIY, do-ittogether, hybrid monitoring, etc.) have on the professional security industry?
“DIY has come to security to get real market attachment in the industry,” says Michael Buckingham, director of August Pro, August Home Inc., San Francisco. “The DIY industry is understanding that we need to create exclusive SKUs with margins to address a market like security.”
Roger Barlow, senior director, product management for security products, building technologies and solutions, Johnson Controls, Toronto, says the professional security industry needs to do a better job differentiating. “If people are looking for the perception of security, DIY is great; but for true security it is not the right solution. Our market has not done a great job differentiating for the consumer what true security is.”
The professional security channel has a complicated relationship with DIY, it seems. Many are currently playing in both worlds simultaneously.
“I think DIY is a threat to our dealers,” says Peter Tonti, vice president of product marketing, MONI, Farmers Branch, Texas. “We knowingly own a DIY company (LiveWatch). It is getting easier and easier to install this equipment, and as that happens you get to the point where these systems are pretty intuitive and not difficult to install. It’s maybe not so much a threat to MONI, but it could be to the traditional industry. To the extent people can put it in themselves, they will.”
Others are finding that is not always the case. “I have a lot of belief that DIY and monitoring-on-demand will continue to grow but I still feel there is a huge market for people that want professionally installed connected home devices,” says Todd Johnson, CEO Capital Connect, Tuscon, Ariz. He points to a recent example: “I had someone call and ask us to help her set up her Amazon Echo because she wanted to do some sort of home automation. She wasn’t a customer, but she had heard we did a lot of automation and asked if she could buy it from us. There is still a huge percentage of the population looking for professionally installed, professionally monitored and are happy to let the experts be experts.”
This is something that many across the industry are noting. “Big box and Internet resellers have advertised to customers that automation systems are DIY,” says Eric Elsenbrook, director of global technology services, Anixter Inc., Glenview, Ill. “Once the customer starts down this road, many become challenged and DIY turns into ‘hire someone to help.’ A licensed contractor who has experience designing and installing these types of systems will give the customers the best results and enjoyment of these systems.”
The hybrid approach is also a popular one for the channel to investigate, says Warren Hill of Interlogix, UTC Climate, Controls & Security, a unit of United Technologies Corp. “We are starting to hear of some of our dealers toying with that model. They have to charge up front for the hardware, which is more expensive than the RMR model. Then there is another one where the customer can buy the system, go home, start installing it and call a professional dealer if they run into problems — DIY with pro-assist. From industry analysts I have talked to they seem to be suggesting that the basic DIY model doesn’t seem to be that successful and there will be a balance somewhere in between.”
A newcomer to the market, Danbury, Conn.-based JAQX is trying to coin a new term — “do it together” or DIT, says founder Fred Stevens. JAQX offers an affiliate program for the dealer market that they don’t have to actively market. “This is designed to get the customer that would have otherwise walked away,” Stevens explains. “A lot of alarm dealers lose sales when a customer calls in because they don’t offer month-tomonth contracts. We do. We don’t pull credit. We don’t require home ownership. If you are the dealer we want you to capture business you are walking away from right now.”
JAQX uses the Resolution Product’s Helix system, which is designed to be installed in 15 minutes or less. Still, for those who need help, the dealer can provide it. “Most are doing it for free right now,” Stevens says. “Dealers are worried about DIY today. I see this as an opportunity for them to have a DIY solution that they can offer. If they don’t have that they will watch their market shrink. It is easy to say that as products get more complicated it will require a full install; but remember the customer is seeing ads for DIY and thinking they can do it themselves.” That is where the DIT comes in, when the customer is a little over-confident of their abilities.
“Overall I think the alarm industry is still in a good spot,” says Mark Hillenburg of DMP. “DIY is still a ‘we’ll see’ thing. We are very involved in the DIY market and we can see how the uptake is and it is not as simple as a lot of people think. There is a place for it, but it will take a little while for that market to mature.” DMP has created an online e-commerce website that dealers can attach to their site and they will get notified when they make a sale through it.
“The dealer can offer professional or ondemand monitoring, or not monitor it at all. It is completely their decision. They can say we will only offer professional installation within a 50-mile radius.” Hillenburg says they have about a dozen companies testing it out so far, but what they are finding is that often the dealers are turning it back into a traditional sale. “They use the opportunity to either start a chat or talk to the customer and it generates a warm lead that transitions back to a traditional sale.”