Control & Automation

How Vivint Sells 200k Security, Automation Systems in a Summer

Utah firm sends thousands of "door knockers" to neighborhoods throughout the U.S., selling security and home automation systems all day long; installed for $199 and $67 per month.


Thousands of well-trained Vivint sales reps descend on U.S. neighborhoods every summer, raking in $20k or more for 4 months of (hard) work. But Vivint is a fun place, with free meals and a full basketball court (click on slideshow below).
Julie Jacobson · July 14, 2011

The security company most famous for its summer “door-knocking” campaigns thinks it can sell home automation door to door.

Formerly called APX, that company just reinvented itself as Vivint, signifying its transition “from a residential security company to a provider of simple, affordable home automation services that deliver increased safety, improved energy efficiency, and greater convenience for customers,” according to a press release announcing the name change in February.

Since 1999, Vivint has amassed nearly 500,000 security accounts—generating roughly $20 million in recurring monthly revenue (RMR)—mostly by selling the old fashioned way: going door to door. (Update: Vivint Denied Fla. Door-to-Door License; Claims Unconstitutional)

Each summer an army of students, mostly from Utah where Vivint is based, descends upon neighborhoods throughout the U.S. With substantial sales training behind them, the young adults might sell three to five systems per day and earn $20,000 to $30,000 – or more—per season.

Once a system is sold, technicians follow close behind, installing the security systems at a rapid pace. Installing just the security system takes less than two hours. Add in some time for automation peripherals and customer training, and the whole job takes about half a day. Roughly 85 to 90 percent of the systems are installed the same day (see installation video below).

A Vivint install

Although door-to-door businesses in general, and Vivint in particular, often get a bad rap for their sales tactics, Vivint claims to have one of the best service records in the business.

Of the national security providers, “we probably have the lowest [subscriber] attrition in the industry,” says CEO Todd Pedersen. “We’re substantially better than the top 10 [alarm companies] in attrition. Brinks was always considered the gold standard in terms of attrition. Everybody does comparisons differently, but we would say we’re even better than Brinks.”

Pedersen attributes the high retention rate to the fact that “there’s not a single thing we outsource, unlike any other company in this space.”

PHOTOS: More details, images of the Vivint sales and installation machine

Vivint has its own central station, its own sales and installation force, and its own in-house resource for virtually every other piece of the security equation except for manufacturing. Even there, Vivint is closely tied to its product vendor. Since fall of 2009, the company has used product from 2Gig Technologies, owned partly by Vivint executives and headquartered practically next door.

Why Stop at Security? Thermostats Sell

Adopting 2Gig in 2009 was Vivint’s first step in a quest to reinvent itself as a home automation company. The self-contained 2Gig security panel is a standalone solution that blends traditional burglar alarm functionality with modest home automation and remote access capabilities via Alarm.com.

“We were amazing at customer acquisition and service,” recalls CEO Todd Pedersen. “Why were we not offering more services?”

From late 2009 through 2010, Vivint installed roughly 170,000 2Gig panels, even though the security company did not tap the Z-Wave potential until late 2010 when it began integrating wireless thermostats into the mix.

The big question was whether or not the energy management component would be bought on impulse during a door-to-door sale.

While consumers can be scared into a burglar-alarm buy – much as they might a life insurance policy – would they spend an additional $6.99 per month for an automated thermostat? The answer is yes. Through 2010, some 16,000 customers bought the device and the service, according to the company (see Vivint pricing).

In fact, “a lot of them [Vivint sales reps] actually lead with energy management,” says Vivint COO Alex Dunn. In many cases, “they’re saying there was no chance of getting in the door with security.”

WHO SELLS THIS STUFF?!
Vivint recruits mostly youngish Mormon college kids who have spent two years on a mission, knocking on doors six-and-a-half days a week in a foreign land, facing rejection 99.9 times out of 100. Experienced Vivint sales managers recruit their own underlings for the most part, and train them according to the book (Vivint’s, that is), promising great financial rewards. During the summer, Vivint unleashes these troops in carefully selected neighborhoods throughout the country. The kids knock on doors almost every day from noon until sundown. All summer long, there are competitions and pep rallies (via videoconference), more training, and fuzzy warm feelings all around. [More]

Although Dunn claims that customers can save $20 per month with Vivint’s $149 energy add-on – including one Z-Wave thermostat and 12 CFL light bulbs – it is really “more about convenience,” he explains. “When you arm the system, it turns back the thermostat. There’s a whole value proposition around it.”

And a funny thing happened once Vivint started attaching thermostats to its security panel sales: business increased, and so did customer retention. The attrition rate is one-third less for customers that have Vivint’s energy management package, versus security alone, the company claims.

What’s next for the door-to-door experts? Vivint has added lighting control and video surveillance to the 2Gig mix, with Z-Wave-enabled Kwikset door locks following close behind. But the company also is exploring other product lines that lend themselves to a quick sale and an easy install.

RELATED: Integrator Banks on 2Gig, Alarm.com for Exit Strategy

As for security, Vivint has big plans. The company expects to sell and install more than 200,000 security systems this summer alone, supplanting a few competitors in the SDM 100 list of top residential security providers. Ranking #6 in the 2010 SDM list, Vivint anticipates “being #2 in that space by the end of the year [2011] next to ADT,” says Pedersen. (Update: Vivint is #4 in the 2011 SDM 100, but theoretically jumped only one spot with the ADT/Broadview merger. RMR jumped 56% year-over-year from 2009 to 2010.)

With a total of $565 million in financing from Goldman Sachs, Vivint is now targeting the market with a mix of security and automation packages that is “well below any of ADT Pulse [home control] offerings in terms of up-front costs,” the company says.

Next page, Vivint pricing

Vivint Security/Automation Pricing (2011)

Note: all packages include a yard sign and lifetime service

Security Package
$99 installation, $49.99/month

  • 1 Go!Control Panel with Cellular and Two Way Voice
  • 3 Door/Window Sensors
  • 1 Motion Sensor
  • 1 Key Fob

Energy Package
$99 installation, $56.98/month

  • 1 Go!Control Panel with Cellular and Two Way Voice
  • 3 Door/Window Sensors
  • 1 Motion Sensor
  • 1 Key Fob
  • 1 Smart Thermostat
  • 1 Lamp/Small Appliance Control
  • 12 Energy Efficient Light Bulbs

Home Automation Package
$199 installation, $66.97/month

  • 1 Go!Control panel
  • 3 door and window sensors
  • 1 motion detector
  • 1 key fob
  • 1 Smart Thermostat
  • 1 lamp and small appliance control
  • 12 energy-efficient fluorescent light bulbs
  • 1 video camera
  • 1 automatic door lock


Secure Your Free Pass to CEDIA EXPO 2019

Register before Sept. 2 to gain free access to the opening keynote, product training & education series as well as the show floor including Innovation Alley and much more. Don’t miss your chance. Sign up today.




slideshow below)." />
  About the Author

Julie Jacobson is founding editor of CE Pro, the leading media brand for the home-technology channel. She has covered the smart-home industry since 1994, long before there was much of an Internet, let alone an Internet of things. Currently she studies, speaks, writes and rabble-rouses in the areas of home automation, security, networked A/V, wellness-related technology, biophilic design, and the business of home technology. Julie majored in Economics at the University of Michigan, spent a year abroad at Cambridge University, and earned an MBA from the University of Texas at Austin. She is a recipient of the annual CTA TechHome Leadership Award, and a CEDIA Fellows honoree. A washed-up Ultimate Frisbee player, Julie currently resides in San Antonio, Texas and sometimes St. Paul, Minn. Follow on Twitter: @juliejacobson Email Julie at julie.jacobson@emeraldexpo.com

Follow Julie on social media:
Twitter · LinkedIn · Google+

Julie also participates in these groups:
LinkedIn · Google+

View Julie Jacobson's complete profile.



  Article Topics


Control & Automation · Lighting · Security · Business · Service & Recurring Revenue · News · CE Profiles · Media · Slideshow · Videos · · 2gig · Alarm.com · Vivint · All Topics
CE Pro Magazine

Read More Articles Like This… With A Free Subscription

CE Pro magazine is the resource you need to keep up-to-date on the latest products, techniques, designs and business practices. Subscribe today!

Subscribe Today!