ONteriors: Takin’ it to the Streets

If you can't take Mohammed to the mountain, take the mountain to Mohammed.

That's an adage San Diego-based ONteriors has used to model its business plan.

Instead of waiting for customers to come to its showroom, ONteriors has gone to the customers, building multiple "technology design centers" often alongside the builders' design centers in new master-planned communities.

The company currently has several technology design centers -- averaging about 1,500 square feet apiece -- in several San Diego-area communities, as well as ones in Tampa, Fla., and Houston, Texas.

And each facility is a boutique-style showroom that helps the company make customers feel right at home with a relaxing environment outfitted with the latest in entertainment, security, home control and communications technologies.

It also uses one-on-one consultations to have buyers interact with products and get a hands-on experience.

This approach helps ensure customers don't get that "deer in the headlight" look when trying to figure out how to operate equipment.

They don't walk away dazed and confused, but excited by all the new options they've just added to their new home purchase.

But just as important, the close proximity of the showrooms to the master-plan communities themselves re-affirms Onteriors' idea of functioning as a key partner with the homebuilder and the entire home-building team.

As part of that effort, the company works closely with each builder to understand and adapt to their unique systems and processes.

It established a partnership with design center operator Creative Touch Interiors to create a unique design center experience for each community.

Going to the Customers

ONteriors president Karen Davis has spent her whole career working with technology. Most recently, she worked with Gateway in a marketing position.

"At Gateway, we changed our marketing efforts from focusing on products to focusing on solutions. We are taking a similar approach with ONteriors," she explains.

"The reason we started the business was to address the market opportunity of delivering sophisticated home technology systems to the production homebuyer at realistic prices. Having a background in technology and noticing the boom in homebuying, I saw the two quickly coming together.

"The industry has been talking about the 'connected home' for years, but for the mainstream consumer, the products and services are just becoming available now; at the same time, consumers are becoming more sophisticated in their technology use and needs. They are seeking solutions to make their lives easier and their homes more comfortable," she adds.

While ONteriors mainly concentrates on the new-home market, particularly the production homebuilder and homebuyer, it also serves the technology needs of those in the surrounding area.

In effect, these technology design centers become the company's showrooms that function like any other storefront. Although the company does try to contain its business to recently built homes.

"A lot of homeowners don't know their homes have already been prewired. We explain that and show them what options are available. Our design centers are typically around 1,500 square feet," Davis describes.

"The location depends on the market conditions. For example, our San Diego design center is located next to the visitor center in a master-planned community.

"This is in a central location and serves homebuyers and residents from the surrounding areas. In other markets we try to locate near the builder's design centers and the communities that we will serve," she adds.

"We will meet the homebuyer wherever the builder and buyer wants to meet -- at our design center, the model home, the builder's design center. Office hours are flexible by customer appointment. Our customers are busy so we try to be flexible in scheduling meetings outside standard work hours if they ask us to.

"The design centers display technology set in comfortable room scenes, including kitchen, master bedroom, family room, home theater, home office and utility area.

"We demonstrate the high definition surround sound experience, Sony New Home entertainment systems (distributed audio and video), Control4 home control, security, central vacuum and home networks," she adds.

Some of the new technologies the company offers include whole-home entertainment systems, satellite-controlled irrigation, 24-hour security monitoring and computer networking/work-at-home options.

"We are focused on some of the largest new-home construction markets. The size of the opportunity depends on the type of home. For example, entry level homes and first-time homebuyers are not nearly as profitable as move-up and semi-custom homes."

ONteriors chose this business model because of the size of the opportunity.

"It provides access to many homes in a single development or group of developments in one area. This is the most efficient business model for sales and service.

"Also, this is not a traditional sales relationship with the homeowner -- we are a member of the builder sales team and offer systems and services that can be financed into the mortgage and are difficult to replicate after construction," adds Davis.

While it might seem that opening these various design centers could be an expensive venture for this relatively young company, which opened its doors in 2004, the company has found a way to do it.

The costs vary based on location and type of building, but ONteriors makes the centers comfortable without spending too much money on high-end furniture and props.

"The main investment is in the demonstration systems, which we refresh regularly to keep up-to-date," admits Davis.

Working with Builders

"Flexibility and adaptability has to be the most difficult part of working in this market. We work with builders to understand and adapt to their unique systems and processes -- from purchasing to construction to options.

"It is extremely important to the builder that we fit in with the way that they want to work, not the other way around," Davis explains.

"For example, some of the builders that we work with have implemented sophisticated online systems for communicating with their subcontractors, others make extensive use of faxes. Other builders view technology options as a differentiator and profit center and want a comprehensive program, while others want to minimize construction complexity and administration and limit the range of homebuyer options.

"Building relationships with the construction supervisor and other trades to understand how they work is a key factor. That way, we are able to be more efficient, drive more sales and be as integrated with the builder as possible."

The company provides builder-focused services such as customized collateral, on-site event support and a public relations program.

It becomes a partner with the builders, delivering back-office efficiencies by coordinating buyer information, option cut off dates and the processing of orders.

ONteriors works with builders as a subcontractor for the prewire. Its consultants then meet with the homebuyer to take orders for options and upgrades on behalf of the builder.

The builder mark-up varies by builder and the product. The company provides a suggested price sheet to the builders -- who actually set the prices. Mark-ups vary, but between 15 percent and 25 percent is typical.

"The mark-up for a flat-panel TV is very low. It is higher for the prewire," she adds.

Since the conception of its original business plan, ONteriors' focus has been on the homebuyer. Davis says this focus is what has really meshed with builders.

"Builders tend to focus on customer satisfaction and on the quality and timeliness of the work," she says.

"The builders saw that our approach would contribute to that. Building our business model and customer experience around the builder design center experience was our best business decision. Customers enjoy it, experience it and buy more. This philosophy and approach also helps us attract progressive builders that want to offer their customers the best," she says.

And ONteriors' approach seems to be effective. The company is currently working with 22 builders.

The one thing it wasn't anticipating though was the barrier to entry in the construction industry.

"The whole infrastructure of this industry -- the licensing, worker's comp, etc. -- is much more regulated and difficult than in other industries. The length of time it takes from signing the contract to completion of the works is also problematic. Those six months to 12 months it takes after signing the contract to move-in really eats into the profits," she admits.

Focusing on Homebuyers

The one area ONteriors prides itself on is its dedication to homebuyers and their buying experience.

"The overall customer experience we offer is completely unique. Our design center process emulates the way they choose granite and flooring. This has never been done with technology options. We have developed a structured communications process to ensure that the homebuyer knows what to expect and what they need to do at every stage of the homebuilding process."

ONteriors focuses on lifestyles, not on technology. Where other builders might have walls of speakers and televisions that could overwhelm the buyer, the company says it sets its design centers up like real model homes.

Its consultants then get to work examining the lifestyles of the clients and deciding which options it offers that will best suit these lifestyle needs.

So as not to cause confusion, products it doesn't feel are appropriate for the buyers' lifestyle aren't presented.

The consultants will often meet with buyers at the time of purchase. They start to get the buyer thinking about how they will use their new home -- where they will listen to music, what room will act as a home office, etc.

A pre-appointment lifestyle questionnaire is given and gone over at the initial appointment. The consultants then conduct an information session explaining exactly what options are available and the home's capabilities.

They guide the buyers through the floor plan and talk about lifestyle choices.

They put the controls for the systems in the hands of the wife to let her "test drive" the equipment.

Closing Techniques

The consultants then follow-up with a series of e-mails and calls to explain what happens next in the process.

"This takes some of the stress out of the home buying experience," Davis says.

After the buyer moves in, ONteriors will conduct an orientation in the home to make sure the buyers know exactly how everything works and that everything actually does work.

Afterward, if buyers have any problems, the customer service department can help either via the company's Web site's self-help section or with a technician either over the phone or in person.

In the end, it also tracks customer satisfaction to ensure homebuyers are entirely happy.

For the cash-strapped buyers who can't afford many options during the initial purchase, ONteriors positions itself as a technology consultant.

The buyer's future needs and desires are examined and the consultants ensure the infrastructure is in place to meet these needs down the road.

To maintain its customer satisfaction levels, ONteriors intends to keep its design centers open long after the communities have been built out for not only service, but also to provide any additional services and products buyers might want.