Florida Integrator Builds Successful ‘Disruptive’ Business Model Around Nest
iHummingbird in Delray Beach, Fla., entices customers to its integration service using website built around Nest and other top brands. Average installation price is $35,000.
After years in the industry, Richard Berrie, president of iHummingbird in Delray Beach, Fla., believes he has found the new paradigm for custom integration. The company utilizes online referral services to garner leads, and designed its own website with full transparency for customers, displaying a menu of entry-level name-brand products with installation prices clearly indicated.
“I wanted people to feel that home automation is something that they can afford,” says Berrie. “There are no hidden fees so I post the install prices for those simple devices. I want them to get a taste of the type of service that we provide. Once they get that experience, they are going to trust us for everything else. And they do. They always want a whole bunch more stuff and they refer us to their friends.”
But while the website menu shows Nest, Sonos, Apple TV, August and other recognizable consumer brand names, the company is not aimed at entry-level customers. Indeed, iHummingbird’s average installation is more significant than you might think.
“Our average system is $35,000, but you can still access us for installation for less than $1,000. We jumped on the coattails of Google and Apple, but needed a full control system based on client demand,” says Berrie, who started iHummingbird in 2014 after having his own business and working for other firms in the area for years.
The company offers two levels. The basic “iHummingbird” means the company will install individual systems, but not connect them to one another. Those silo’ed systems--from Nest to Apple TV to Sonos to Ring to August--are controlled by their own individual apps. The next tier of service is called “IHummingbird Elite” in which the company will connect those individual disparate systems into a single integrated solution.
Berrie uses Savant as his control solution, and integrates lighting and shade solutions from Lutron and Somfy, among other disciplines. However, Savant does not currently integrate with Nest. iHummingbird does not do video distribution or audio distribution (except for Sonos).
“We are now a full integrator, which is a bit unfortunate because it was not part of my original business plan,” admits Berrie. “When I started iHummingbird , everyone told me I was crazy… that these products offered no margin and I was turning my back on the industry. My idea was to create an experience similar to the Apple Store, but instead of having 300 people milling around you, I would bring it to people’s homes. I would educate them in their homes and setup and fix their equipment in their homes.”
He continues, “But I needed to figure out a way to extend our service hours. I could not operate a business where the maximum service window was two hours and I would need to keep going back to the home over and over again. So I decided I would at first just install Nest and Apple TV and other simple devices. I reverse engineered everything I had ever done as an integrator and eliminated any product that caused callbacks. That meant no video distribution (except Apple TV), no audio distribution (except Sonos), no DVD players, no receivers. I install Sonos Playbars with a subwoofer, mounts and TVs. We became very successful.”
Unique Website Interaction
While the iHummingbird website, which was constructed by Relidy, is comprehensive and even includes a live chat service, it is not an e-commerce platform. Also, prospective customers cannot use the website to set appointments; they must pick up the phone and call.
“I still believe that services are a touchy-feely thing; you can’t solely sell services online,” says Berrie. “My website is an introduction. You can’t sign up for an appointment or buy product on my website. For now, I don’t want clients to be able to do that. I may at some further juncture, but not right now. I am much more interested in human contact. I don’t believe in automated voice messages. If you want to provide a service, you need to speak to people. I want to be able to provide a level of information to that person that is valuable to them immediately.”
That methodology is working. The majority of iHummingbird’s clients are Florida Baby Boomers, many with second homes. Berrie estimates only 10 percent are Millennials.
“In a typical sale, we go to the home and install the individual device or devices they wanted, usually a Nest, Sonos or Ring. The trucks are loaded with other equipment and we typically upsell them. Our goal is to do a great job at a reasonable price and then offer to sell them something else. They always call us back,” he says.
Nest Is Key
Berrie started using Nest when it first came out.
“I loved the styling. It is wacky that it took a thermostat to generate so much interest in home automation among clients, but that is what happened. Everybody is talking about it. It gives confidence to customers to know that the founder Tony Fadell had a background as a designer at Apple, and that Google bought Nest. The people at Nest are fantastic. I also used DropCam before Google bought it also. It is so easy to set up and has such a great interface.
He continues, “Nest supported us early on. They understood what we were doing. Nest understands that our business model is the new paradigm: we are not going to oversell customers with niche equipment that they don’t necessarily want. I want to be known for a company that provides support. I will let Apple and Google do the marketing for me.”
And that means that iHummingbird instals a Nest thermostat on every job it does.
“Product awareness of Nest is the No. 1 attraction of the product. Clients tell us that Nest is their way of dipping their toe into home technology. The fact that is also so easy to use and controllable from a smartphone is attractive also. Some clients are intimidated by any other piece of technology, but not Nest. There is great momentum behind Nest. Their friends have it; their kids have it. It is the same sort of momentum that Apple used to have. And because Google stands behind Nest, it makes the product that much more reliable and stable in customers’ minds,” says Berrie.
Currently, the Nest website provides iHummingbird with two leads per week on average, which is about one third of its total weekly leads from all sources.
“It is by far our No. 1 source of leads for new customers,” says Berrie, adding that he is able to upsell a Sonos or Apple TV on about 25 percent of those Nest leads.
Online Referral Services Feed Leads
While the majority of iHummingbird’s leads come from Nest, the company also aligned itself as a subcontractor, so to speak, with various online referral services to get leads. Berrie is signed up as an installer for and fed leads from Buzztech.com, Hellotech.com, Thumbtack.com and Geekatoo.com (subsequently acquired by HelloTech in May 2016).
“What I realized is that you need to be in front of your customers in any way you can,” he notes. “Enjoy.com came out one year after I did. They ripped off some of my concepts. I take that as a compliment.”
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Jason Knott is Chief Content Officer for Emerald Expositions Connected Brands. Jason has covered low-voltage electronics as an editor since 1990, serving as editor and publisher of Security Sales & Integration. He joined CE Pro in 2000 and serves as Editor-in-Chief of that brand. He served as chairman of the Security Industry Association’s Education Committee from 2000-2004 and sat on the board of that association from 1998-2002. He is also a former board member of the Alarm Industry Research and Educational Foundation. He has been a member of the CEDIA Business Working Group since 2010. Jason graduated from the University of Southern California. Have a suggestion or a topic you want to read more about? Email Jason at email@example.com
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