Security Sales & Integration

November 2012

SSI serves security installing contractors providing systems and services; surveillance, access control, biometrics, fire alarm and home control/automation. Coverage in commercial and residential product applications, designs, techniques, operations.

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RESIDENTIAL MARKET RESEARCH 5)Do not lead with energy management as a primary driver at this time. Obtaining savings in energy can off set the costs of equipment or monthly fees. Based on that alone, consumers have another rationale for adopting monitored security if they have been on the fence. 6) Pay attention to which features major players are off ering and consider the special circumstances of your territory. For example, fl ood detection may resonate in some areas and not at all in others. Managing automatic landscape irrigation sprinklers with the help of zip code level weather information will resonate in the West, but perhaps not in areas such as New York. 7)Reach out to current customers. Don't forget about low-hanging fruit, and also a way to create stickiness with existing clientele to build long-term business relationships. BE PREPARED AS DEMAND GROWS Once individual consumers are familiar with a new product or concept, they can assess its personal value. At that point, security dealers can move from explaining IP services to promoting benefi ts in detail. T is is true for selling to an individual consumer or to spreading a broader message across a set of target consumers. Explaining benefi ts in detail before familiarity with the product category idea is present puts the cart before the horse. Developing familiarity by piggybacking on the marketing eff orts (and dollars spent) of giants is not security dealers' only challenge. Security dealers must determine how they will position IP services within their portfolios. Will new services be only ancillary upsells or will they be thrown into the monitored security sale nearly "free" for competitive parity? Can IP services provide profi t if sold by themselves? Diff erent security dealers will adopt varying business strategies as they adopt IP services. But all must develop their targets' familiarity levels. If that does not occur, even good business Figure 3: Intention to Switch to a Different Home Security Service Provider to Receive IP Home Security & Monitoring Services "Q404. If a home service was available from a telecom/cable provider DIFFERENT than the provider you now have, what is the likelihood that you would switch (once your current contract is over) to subscribe to one or more of these services?" (Among All BB HHs, n=2,500, ±1.96%) Certainly Will - 7, 6% No Chance at All - 1, 16% 6, 10% 2, 11% 5, 20% 3, 12% 4, 25% Figure 4: Reaching Relevancy Relevancy = Acquisition Before familiarity achieves a certain level, consumers do not purchase. Before purchase/ acquisition process begins… Ease of Use/Install Affordability Assessment of Personal Benefit. Yes No Familiarity Begins. Stages of Decisions Consumers do not acquire products or services with which they are unfamiliar. In testing for familiarity of a product or service, some diffused and others new, Parks Associates discovered that understanding a product's or service's familiarity levels is most easily understood by segmenting consumers into three categories: owners, intenders and nonintenders. Across multiple products and services, the degree of difference within familiarity scores stays nearly constant. Owners always report the highest familiarity, intenders the next highest level, and nonintenders the lowest level. Further, the difference in scores between the three levels remains about the same. However, the scores vary by a product's diffusion level. Products already present in a high percentage of homes have higher familiarity scores whether or not an individual consumer has the product or service. In reverse, familiarity scores are lower for new products — even among owners of that product. Yes No Yes No Knowledge to "Where to Acquire" Purchase Yes No models will not grow the market. While timing is never certain, it is certain that IP services will diff use in multiple ways into U.S. households. T e IP services' market will produce billions of dollars over time and help sustain growth 36 / SECURITYSALES.COM / NOVEMBER 2012 in monitored security. Dealers who seize the opportunities early and gain expertise have much to gain. Tricia Parks is CEO of Dallas-based research fi rm Parks Associates. She can be reached at tricia@ parksassociates.com or (972) 490-1113. *Forecasts do not include single independent IP devices such as connected door locks or connected garage door openers. Nor does the forecast include high-end control system components except when installed as bundles with some security system.

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