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ADT’s Custom Home Program Makes Sense

The mass-market security provider sticks to core strengths, partners with local integrators.


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Early last year security giant ADT quietly launched a "Custom Home" business. I put the term in quotation marks because no respectable CE pro would dare associate the custom business with ADT, right?

In the residential realm, at least, ADT is best known as a security factory that cranks out one free installation after another (they're not so free anymore).

With that in mind, I was skeptical when I joined other members of the press in Delray Beach, Fla., to tour an "ADT Custom Home Installation."

I imagined a crew of "real" custom installers scrambling to clean up the mess of a security company that got in way over its head.

In fact there was no mess because, quite frankly, ADT did not stray very far from its core competency.

"We're not coming in to be your home theater company," says Tim McKinney, ADT director of Custom Home services. "We are focused on what we do best: security and safety."

Indeed, safe and secure is what this particular house was, with nine surveillance cameras monitoring almost every inch of the 4,000-square-foot premises -- a small place by nine-camera standards.

The alarm system was nothing terribly special -- ADT's standard Honeywell security panel with perhaps a few more sensors than usual, and a nice little Honeywell TouchCenter touchscreen.

The alarm and CCTV (closed circuit TV) systems didn't really interact with each other. In fact, there was hardly any integration at all between the security systems and the home's other electronics.

So what's the big deal? Is ADT simply adding CCTV to its typical residential alarm installations?

Product-wise, at least today, that's about it. Marketing-wise, though, it's much more. The Custom Home initiative marks ADT's most significant effort to target the well-to-do. Sure, the company has always installed big alarm systems in rich people's homes when called upon, but there was real no strategy to corner this market.

A strategy is certainly needed if ADT is to move beyond its mass-market mentality. To make it happen, ADT had to clearly delineate its custom operation from the traditional security service.

For us regular folks, security installers need to get in and out of the house fast, which they do by installing roughly the same security system in every one's home. Obviously, they're not making money on a $349 installation until a year or two of $32.99 monthly payments.

This is the Custom Part


So really the Custom Home business is little more than taking care of ADT's customers at the high end, spending time with them, understanding their needs, and providing service that can ill be afforded on $349 jobs.

That's smarter than it sounds.

If good customers pay a security professional the same way they pay a custom integrator -- that is, a fair price for attentive service -- then more money can made today, not a few years down the line when the monitoring revenue finally pays for the job.

To implement what ADT calls the "New Gold Standard" in security, the company has had to change its recruitment and training tactics. For starters, working for the Custom Home group is considered a step up in the hum-drum life of ADT home security installers and salespeople. McKinney says the new division allows ADT to "career-path the high-volume rep into custom."

As a secondary benefit, then, ADT will likely be able to entice more decent techs and sales folks to the company, by promising them a clear path to better things.

In addition to promoting from within, McKinney says ADT is "looking in unique spaces" for its new talent. That includes the usual suspects for installers (look out integration companies!) and some fresh faces, like high-end window-covering specialists, on the sales side.

ADT also has changed the way it recruits clients for the Custom Home program. Just as it has done so successfully on the high-volume side, ADT is plotting methodically its custom course.

Custom Home personnel undergo "intensive training to understand the customer's needs," says McKinney.

The week we visited ADT at its Boca Raton, Fla., headquarters, sales reps for the Custom Home division were convening for just such training, which included a guest appearance by Matt Oechsli, author of The Art of Selling to the Affluent: How to Attract, Service, and Retain Wealthy Customers & Clients for Life.

Bolstering the Back End


Having smoother, cleaner-cut, more talented sales and technical people on the front end, though, is just a small piece of the Custom Home story.

ADT has mobilized its well-oiled back-end machine to support the initiative. The company has horded demographic data defining which neighborhoods -- down to the last four digits of the zip code -- house potential Custom Home clients.

When the 90210s ring the massive ADT call center, the operators know just what to do with them -- ask a few qualifying questions, and then transfer them to specially trained handlers if appropriate.

"We have a process to determine if they're custom," says McKinney. "It used to be based on the size of the job. Now we do it more demographically."

That way, ADT can effectively upsell well qualified customers who may call in for a simple security system.

It Works


That's just what happened when the homeowners in Delray Beach called 1-800-SHOP-ADT for a basic security system for their massive remodel.

"They called ADT. The representative asked certain questions, and then sent the customer to us," says Marvin Miller, a Custom Home sales rep.

After the Custom Home team met with the homeowners, "they didn't look at other security dealers," Miller says. "They knew ADT. They were comfortable with us."

In this case, says Miller, "ADT got there first." That's bound to happen over and over again, with security being one of the first systems that homeowners consider when building or remodeling a home.

And if you can't beat 'em, join 'em.

That's what Miami-based Showtime Audio & Video did. The custom integration company has partnered with ADT on several jobs in the area, including this particular installation. "It's great working with a company like ADT that's been around for so long says Showtime's Seth Jacoby. "They know their customers."

ADT apparently found Showtime after researching integrators in the area. Showtime acts independently of ADT -- the A/V company is not a subcontractor -- and does not pay any kind of referral fee.

In return, Showtime stays loyal to its security partner and maintains "a relationship with ADT just like a client," says Jacoby.

When Showtime happens to "get there first," the A/V company will call ADT if the customer requires security.

Showtime hadn't installed alarm systems in the past, but the company did do a brisk business in CCTV and digital video recording. They handed that business to ADT, but it was a small price to pay for the partnership, Jacoby explains. (In any case, Jacoby says, surveillance cameras "take a lot of maintenance, especially outdoors.")

Not only does Showtime benefit directly when ADT pulls the integrator into a job, the strength of the ADT brand helps Showtime land more jobs on its own. "For us to be able to mention that name has been good for us," says Jacoby. "When we say that we have a partnership with ADT, they [clients] like that."

I'd say that sounds pretty good for the integrator, but don't rush out and call your nearest ADT branch for the opportunity. Yes, ADT Custom Home is looking to team with home systems integrators nationwide -- the business now reaches every major metropolitan area -- but "we're trying to control that at our own pace," says McKinney.

In other words, don't ask me for his cellphone number.

Security + Integration


As mentioned earlier, currently there's not a whole lot of integration going on in the Custom Home division. The alarm and CCTV systems barely talk to each other, let alone to the systems installed by the integrator.

For example, ADT is using the VIP-GatewayX gateway from Napco for the surveillance portion of the installation. The product, which ADT calls Safewatch Videoview, takes up to four analog cameras and puts them onto an IP network. It has a built-in Web server that allows users to access their cameras from a remote PC or Web-enabled cell phone via myADTVvideo.com. (By the way, the solution is the same one that ADT implemented in the BankAtlantic Center hockey arena, which we also toured.)

But the Honeywell alarm system in the same home has a completely different Web interface using Honeywell's own Internet Control Module. To access their security panel from afar, homeowners must log onto an entirely separate site.

Furthermore, the Custom Home group -- which has done installations that number "in the thousands," according to McKinney -- has yet to integrate security products with third-party control systems such as AMX and Crestron. McKinney says the company is beta-testing that application now.

Other more integrated solutions are on the way. For starters, ADT is looking to better integrate the alarm and CCTV experience, according to McKinney.

He mentioned, oh so briefly, that ADT liked the idea of a single TV-based interface for all of the home-control applications.

McKinney probably thought that that casual remark would be lost on us reporters, but I used it as an opportunity to ask the question I had wanted to ask all along: Will ADT sell the Media Center-based Lifeware automation system from Exceptional Innovation?

While Honeywell is the security panel of choice for most ADT residential installations, ADT also uses products from Digital Security Controls. DSC has been a Lifeware partner since day one, and continues to be Lifeware's only security partner, at least the only one that has implemented Web Services for Devices, the underlying technology of the Lifeware platform.

Recently, DSC announced it would sell a bundle that includes a security panel and a Media Center PC with a version of Lifeware software preinstalled.

Will ADT bite? "It's one of the things we're looking at," McKinney says. Sounds like a "yes" to me.

ADT also is "looking at" incorporating access controls into its residential alarm, CCTV and fire-protection offerings, possibly some biometrics. Hmmm…maybe eKey?

With that, it was time to end the tour, but not before indulging in sweets prepared by the homeowner who, incidentally, just had a baby three weeks earlier. (If I were even half the mother and host...)

"They treat us like part of the family," says McKinney, speaking generically about the Custom Home team.

When was the last time someone said that about a security dealer?

ADT Custom Home vs. Plain Ol' Security Service


ADT might find itself in a bit of a pickle, as would any organization that promises two different levels of service. In security, I would imagine, the issue is particularly sensitive.

For example, this is the kind of "Gold Standard" service you can expect from ADT Custom Home, according to a brochure:

We will take the time to get to know you and to understand the life you lead. Then we will offer you a security system with the products and services you require and request. We will install it with a minimum of disruption to your everyday activities, and with sensitivity to your décor and aesthetics. We will follow up to validate all emergency contact information and see to your complete satisfaction.


One might think this service should apply even to the chintziest customer. I assume it does.

It sure looks like it. The people in the regular ol' ADT brochures are just as beautiful and happy and playful and ethnically diverse as the ones in the Custom Home literature. Likewise, the operators at the monitoring station look just as friendly and helpful in both cases.

But the Custom Home customers do get some special treatment, the least of which is the surveillance products and future integration solutions offered by the group.

They also get 24-hour service, even for non-emergencies, from a "Preferred Customer Service Agent empowered to answer any questions you may have," according to the Web site.

"They can call us for anything," says McKinney.

How Much is it?


As with any custom business, there is no "typical" job. McKinney says Custom Home projects have ranged from $2,500 to $350,000 for security alone. And, no, ADT doesn't call in the boys from the commercial division for those monster deals. The Custom Home techs can handle it.

For starters, the installation is bid as it would be for any traditional commercial or custom installation job, based on time, materials, the usual.

Monitoring service, however starts a bit higher than the standard $32.99 for the rest of us. The Gold Vital Care Package is the cheapest at $44.99, which includes monitoring for security, fire, power outages and one critical condition, such as temperature, flood and/or carbon monoxide monitoring.

Costs increase, as they do in the case of traditional security, as more services are added -- cellular backup ($12), two-way communications ($8), additional critical conditions ($5) and video monitoring through MyADTVideo.com ($10 and up).

Currently, ADT does not monitor cameras at residential premises, although that will inevitably come. The company already provides that service to its commercial customers.

What Can Integrators Learn?


I believe ADT is on to something good here. I like that the security company knows its limitations and partners with other integration specialists for A/V, automation and other home systems.

Working together, the security company and a local integrator can very well double their prospects. Are you doing that?

Traditional integrators could also take some lessons on micro-marketing from ADT. You might not be as good at it, but you can indeed use services that will alert you to new construction, remodels or moves in affluent neighborhoods.

Here's something most integrators are learning already: CCTV is hot, hot, hot, and opportunities for recurring revenue can be, too. Residential surveillance is a big, if not the biggest, part of the ADT Custom Home solution, and ADT isn't stupid.

Finally, custom integrators might hold their noses when they think about mass marketeers like ADT, just as they do with Bose. But companies like this did not get to where they are by accident. They have operational processes, systematic R&D, brand-building techniques, marketing prowess and lots of money that dealers can benefit from. A high-end dealer I recently met on the Runco Getaway tells me he's cleaning up with Bose's new-and-improved integrator partner program for these very reasons.

Likewise, when Showtime's Jacoby assesses his relationship with ADT, he says, "In terms of growth, yes it's been great," but even more valuable has been the experience of working with a large, shrewd organization like ADT.




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About the Author

Julie Jacobson, Co-Founder, EH Publishing / Editor-at-large, CE Pro
Julie Jacobson, recipient of the 2014 CEA TechHome Leadership Award, is co-founder of EH Publishing, producer of CE Pro, Electronic House, Commercial Integrator, Security Sales and other leading technology publications. She currently spends most of her time writing for CE Pro in the areas of home automation, security, networked A/V and the business of home systems integration. Julie majored in Economics at the University of Michigan, spent a year abroad at Cambridge University, earned an MBA from the University of Texas at Austin, and has never taken a journalism class in her life. She's a washed-up Ultimate Frisbee player currently residing in Carlsbad, Calif. Follow her on Twitter @juliejacobson. [More by Julie Jacobson]

1 Comments (displayed in order by date/time)

Posted by James K.  on  10/07  at  04:31 PM

ADT is an awful company.  They lie, take advantage of customers, provide lousy customer service and provides cheap equipment.  They farm the sales/installation of equipment out to unqualified technicans and then don’t support the installation when it doesn’t work.  I will NEVER EVER use ADT again.

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