Feeling Good About Home Again
With the recession waning, albeit stubbornly slow, opportunities in the home automation and entertainment market are reemerging. Installing security pros, with the right know-how, are uniquely positioned to fulfill customer desires for new or upgraded systems.
It’s been a long, tough slog. While the residential security business has weathered the storm comparatively well, the consumer electronics industry in general has taken a ferocious beating: New housing starts are estimated to come in at 697,000 for the year. That’s up 21 percent from 2009, but a far cry from the more than 2 million cornerstones laid in 2005.
To make matters worse, last year’s progress was not matched with gains in the electronics industry. U.S. sales of consumer electronics goods are expected to remain nearly unchanged from last year’s figure of $165 billion, according to figures from the Consumer Electronics Association (CEA).
Nevertheless, there is some good news. Spending on home technology in general, after a nauseating 14.4-percent year-over-year decline in 2009, is finally expected to begin recovering toward the end of this year. That’s a welcome relief for contractors, but it comes too late for many. Thousands of the more marginal home integration businesses were forced to shut their doors, leaving their customers unserviced and hungry for information. Sad news for some, but a golden opportunity for security installation professionals who had the savings, stamina and savvy to last through the tough times.
But how can security professionals take advantage of the opportunity? Consider expanding your business beyond security and into home automation systems. Think smart homes, home theater, multiroom audio and AV, energy management systems, life and health systems monitoring, and lighting control. Let’s look closer at why you should consider it, along with some tips on breaking into the market.
Preach to the Choir
The best prospects for home electronics are people who already own it, experts say. Why? Because home electronics is as much about selling a lifestyle as it is about selling a product. Just as security professionals sell peace of mind, home integrators and home theater specialists sell a dream — and people who already own a home electronics system are already believers.
The behavioral difference between current owners and nonowners of home technology products is significant. Interest in future installations was much higher among current home technology owners than among the general respondents. For example: According to studies by CEA, 67 percent of those who already own at least one home technology product say they are likely to purchase a home theater system in the future, while only 50 percent of those who do not own any home technology products say the same.
The same pattern holds true for other home technology systems as well, including energy management systems (67 percent of current home technology owners are likely to buy another home technology product), lighting control (58 percent) home automation (57 percent ), multiroom audio (54 percent), intercoms (43 percent), and health monitoring and support (37 percent).
In every case, the percentage of people reporting themselves likely to purchase additional home tech products was substantially higher for current technology owners than for those who did not own modern home systems integration technology of any kind.
What does this mean for you, the residential security installation professional? It means your greatest asset is quite possibly the untapped cross-selling potential of your current book of business.
Know the Demographic Landscape
Nationwide, the bulk of owners of home tech products tend to own homes valued at between $200,000 and $400,000 — the “sweet spot” of home systems technology. And while CEA data shows that technology ownership rates are naturally higher among high-income households, there is still plenty of room for growth even among owners of more modest dwellings.
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