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Industry Pulse HOT SEAT UNLOCKING NEW REVENUES WITH ELECTRONIC LOCKS KEITH BRANDON Director of Residential Access Solutions Kwikset As home automation and interactive services continue on an upward trajectory, electronic locks are becoming a part of the sales conversation alongside lighting controls, remote thermostats and other connected devices. Keith Brandon, director of residential access solutions for Kwikset, joins the conversation to discuss the fedgling market for these "smart" locks in the home. How do electronic locks change the business proposition for security dealers? In the past, the business proposition has been core security. I can use theft, break-ins, burglar rates and scare tactics to drive a security ofering to get interest from consumers. Now I fip my business proposition to be more of a lifestyle beneft, more interactivity with security and other devices — locking, lighting, thermostat, convenience on mobile devices. As dealers embrace the opportunity to create a diferent selling proposition, 20 they're going to grow their conversion rates with the consumer. Tey're going to keep out competitive threats of others that are entering in and trying to take their markets. And the last thing is they're going to be able to sell higher-end ticket items above their base monthly revenue that they may not have been able to get with just core security alone. Do electronic locks add a lifestyle beneft to the homeowner? Overall, number one about an electronic lock is it certainly is an adjacent device to delivering security and peace of mind. Delivering electronic locks within [a home automation] solution makes a lot of sense. Consumers understand they can control and monitor the status of their door locks, whether they're 1,000 miles away or sitting in their home. Tat, in and of itself, adds value to the solution that the security dealers are selling. Ten when you start to build upon that and expand to other devices, it really starts to inherently transition to more of the lifestyle beneft-selling solution of "when I use my lock as I come into my house I can disarm my security system." Tere is a convenience aspect to that. When I enter FIND IT ON THE WEB For much more from our conversation, visit securitysales.com/hotseat where you can also access the full archive of complete Hot Seat interviews. / SECURITYSALES.COM / SEPTEMBER 2013 my house, my thermostat adjusts to a home mode, opposed to an away mode as I locked my door. I can control lighting from the interaction of the door lock as well. Are the devices geared mainly at upper-scale residences? Tey are not just upper-scale, but to be honest it really comes down to how the security dealers are delivering the proposition. Some dealers are on the high side of "pay for all the equipment and your monthly is a little lower," while others are on the low side of "we'll subsidize the total package of equipment and monthlies are higher." On the latter, where you have more subsidized approaches of the devices, you get down into some of the bottom end of that midprice point, more so than if someone has to pay for the entire equipment cost of everything. It's not a whole lot diferent than the maturity cycle of the broader residential security space as it's evolved over time. For entry-level security there's lower-cost devices and lower monthly RMR generation because you're selling the low end of that solution. I would say it's def nitely above that. We're not seeing these connected solutions coming in at that price point, but I wouldn't say it's a high price point ofering either. Tere is still opportunity where dealers can f nd the right mix in their markets that get them to span low-, high- and midprice oferings.