Build Your Business with Home Builders

Cooking shows make preparing delicious meals look easy. “Simply add a dash of this and sprinkle a little of that. Then use this unique tool that was perfectly designed for this task and give it a little flip of the wrist and voila! Your creation looks like it belongs on the cover of Southern living magazine.” Reality, we all know, can be much different. For residential security integrators, working with builders can sometimes feel the same way – it looks easy to get sales volume without much effort, yet in practice, it is a challenge to even get the builder representative to call you back, let alone create a program that works.

The opportunity is obvious – while the security industry has its traditional 20-25 percent penetration rate, security integrators who have found a successful partnership with builders talk of take rates as high as 40 percent. Following the right recipe will yield results as high as 70 percent, with an opportunity to increase that percentage over time, but like any complex kitchen dish, the wrong ingredient at the wrong time could taint the entire dish.

Leveraging the following best practices can help demystify the creation of a successful builder program, and uncover the secret recipe to working with builders. 

Pick the Right Product

Homebuyers are well aware of their smartphone’s capabilities and interface; in fact, every new device is instantly, subconsciously compared to the smartphone. Anything that falls short is generally either dismissed or disregarded, and technology installed in today’s smart home will be measured no differently. For this reason, the hardware and software solutions you market to smart home customers must be on the top of their game. It is important to separate the concept of a connected device with its own app (such as a DIY Ring doorbell) from a total smart home ecosystem that combines all related smart home devices on a single app and platform.

On the other side of the equation, home builders recognize that smart technology is sought after by their prospective customers. Some may have dabbled in connected home tech previously with connected thermostats or wireless networks; however, very few truly understand the capability of today’s technology. That said, according to the 2018 TecHome Builder Market Pulse Survey, builders plan to allocate 11.3 percent of a home’s sale price to smart home technology in 2020. As builders budget for smart technology, they need an expert like a residential security integrator to tell them how to spend it.

Evolving Business Models

With these new smart home technologies come new business models, pricing structures and non-traditional enrollment practices, and security integrators must be prepared to evolve with the technology. The more an integrator can align a builder program with the way consumers buy today, the more effective the program will be. Even changing terminology can help, using words like “subscribers” and “membership” instead of “monthly monitoring” and “contract.”

For years, security dealers have looked at creation costs and wondered how they could shoulder all that burden. They have tried to get customers to pay for the upgrades up-front, but that is often at odds with “Only $99 installed” campaigns that have been successful in years past.

Some dealers “hold back” on marketing additional smart technologies because they know customers will want everything: a security sensor on every door and window, smoke detectors in every room, every light, lock, thermostat and garage opener converted to a smart device and cameras installed inside and out. The price tag on the equipment alone is staggering; add in the labor and it turns into a monumental job that any technician will brag about for years to come. Is the customer willing to pay for all of that? In rare cases yes, but working with builders gives integrators the perfect opportunity to share that burden.

Builders can help shoulder not just the cost, but the work as well. For example, every new home gets an HVAC unit, and one or more smart thermostats would become part of that installation. Educate the builder on the virtues of a Z-Wave compatible thermostat, and make recommendations on supported models you prefer. The installation will not be much different than what the builder is accustomed to, but instead of having a throwaway thermostat when it is completed, there will be a smart thermostat that integrates with the security system.

Repeat this conversation with the door contractor – instead of installing the customary “dumb” deadbolt, use a Z-Wave model instead. Have electricians install Z-Wave outlets and even run the wire for the security panel and pre-wire for cameras in homes as they are being built. Imagine walking into a home to do an install and all the technician has to do is mount a panel, connect the power and pair the devices.

Instead of walking into a meeting with hat in hand, begging for leads, the builder will recognize that the security integrator can be just as valuable – and in many cases even more valuable – than other contractors, because you are selling technology that will make the home smarter, safer and more energy efficient.

Bring a Business Case for the Builder

Any builder will tell you that a big factor in their decision-making process is whether or not the contractor provides rebates. Examples include faucets, appliances, door hardware, the garage openers, etc., which are almost always selected not just on price but rebate amount.

Part of your pitch to the builder needs to include the same. Dealers with 70-percent take rates will often offer a rebate in the $100 range for homebuyers who upgrade to a “service plan.” If you do the math, it is well worth it. Also, do not forget hard costs, such as equipment, trucks, gasoline, technicians, etc. Like any other contractor providing a service, a security integrator’s proposal to the builder should include these costs.

Builders are also concerned about hard costs. Many security integrators mistakenly assume they need to offer technology at the lowest possible price to accommodate this, but costs come in many forms, and integrators can assist the builder to reduce cost while adding value and security. Implementing technology solutions can ultimately affect a builder’s bottom line.

For example, security is critical to builders, and when you ask about theft from unfinished homes, you may be shocked at the number of appliances that need to be replaced or vandalism that needs to be repaired. Additionally, power usage during and after construction can be significant, especially when a potential homebuyer or realtor turns on the AC and forgets to adjust it before they leave.

A solution would be installing the security and smart home solution during trim out, which can protect the home during the vacant period of time before closing, while automatically adjusting the thermostat each evening and turning off lights. A smart door lock can automatically lock the door on a vacant home, a smart garage opener can close itself, and a security app such as Alarm.com would enable the builder to manage multiple locations from a single login.

In the past, security integrators have waited until the home was closed and purchased to install all the equipment, but this would negate any construction power savings and eliminate the ability to protect the model home.

While it might feel like more work, making two trips to the home is well worth the time. During trim out, install the alarm panel, pair it with the Z-Wave devices already installed by other contractors, and, if possible, load some custom photo frame images. If a video doorbell, voice control device and/or cameras are included, do not install them during trim out, as you not only run the risk of having them stolen, but they can also be used as incentives for homebuyers. Wait until post-close, when you can install and configure everything to the new homebuyer’s specifications.

The Model Home: Your Proving Ground

Many security integrators spend hundreds, sometimes thousands of dollars on equipment and installation labor, but miss the opportunity to label these devices, create easy demos, and train the model home salespeople to properly show off the way the system works. Here are four tips:

1. Showcase the equipment: Any services you can deploy for a customer should be fully showcased in the model home, including security, lights, locks, thermostats, garage door openers, cameras, voice control, etc. Install the equipment, but also remember to set up text-based notifications, smart rules, voice control, and add attractive labels to each location. There is little purpose installing a flood sensor under the sink unless there is also a label on it, with a message such as: This small device will monitor your home around the clock and alert you the moment a leak is detected.

2. Set up the model home like a self-guided tour. Some examples: Put videos on the TV in the living room; place signs next to the Amazon echo with suggestions of what to say – try saying Alexa, turn off the living room light. Additionally, security panels such as the Qolsys IQ can display images when not in use, so use this photo frame as an in-model billboard, showing off your branding, special offers, features, and enticing calls to action – call today to claim your free video doorbell, for example.

3. Train the sales staff. The sales team working in the model home need to have expertise on every aspect of the home. Set up easy demos so they can share the details of the smart home system without becoming confused. Additionally, create an employee purchase program so the salespeople can have personal experience with the system. Salespeople who can easily perform demos and relate them to their personal experience are a powerful combination.

4. Set up audible cues. As a homebuyer walks through the model, they should hear the panel speak as doors and cabinets are opened. This subconsciously makes them aware that these doors and windows are not ordinary, they are smarter than other homes they visit. If the builder has allowed you to place signage around the model, the potential homebuyers should become aware of your company thanks to flyers or the photo frame billboard images as discussed.

All these things add up to pique the curiosity of a homebuyer. Hopefully, they will want at least some – if not all – of the technology they saw, and may have specific situational questions and a desire to understand pricing and terms. The importance of planting those seeds in advance cannot be understated.

Meeting with the End-Customer

In the past, residential security integrators have run into problems getting builders to provide homebuyer information, but if you are providing rebates to the builder, you may find those roadblocks removed. Ask for projected closing reports followed by weekly actual closing reports. Reach out appropriately to potential homebuyers as you receive this information. Here are a few ideas:

• A congratulatory introduction email – We see you have made a decision to purchase a smart home from …Congratulations! We are excited to help you configure your technology options. We will be here to help as questions come up.
• A friendly text message – This is Judy with Security ABC. I want to set up an appointment with you to configure your smart home options and set a time to install your free video doorbell. Would Wednesday work for you?
• Include a one-page flyer – Makes sure this is part of the materials provided by the builder during closing.

Once you have an appointment set with the homebuyer, send friendly email/text reminders beforehand – one week, three days before and the day before – in order to avoid cancellations. Encourage the user to download the app to make installation easier. Email reminders may also include additional content that builds value, such as: Did you know your home has voice control? Ask your representative to help you customize this during your appointment.

As you meet with the homebuyer the first thing the technician should do is get all the “free equipment” set up. Once installed, show them how to use it, juxtaposing what they get with their “free service” and what would only be included with a subscription or membership. For example: Your free mobile app includes the ability to answer your video doorbell from your mobile app or the touchscreen on the wall. It can also detect motion and send alerts to your phone. If you would like cloud storage of the video clips, I suggest upgrading to the paid version of the app.

Jeremy McLerran is Senior Marketing Director for Qolsys, and Madison Bowles is Channel Manager, Builder Program for Alarm.com. Request more info about Qolsys at www.securityinfowatch.com/11675696 and Alarm.com at www.securityinfowatch.com/10216128.