Selling Smart-Home Systems to Mid-Market Consumers and Millennials
This home technology integrator says there's a strong opportunity to market toward the mid-level consumer, Gen-X and Millennials who want smart-home technology but can't afford a $100k control system.
For the last few years we’ve seen home automation and control systems push downmarket into the mass consumer channel. I believe Control4 was the first step in this direction from within our industry, while products like Nest, a little bit later, raised consumer awareness for connected, smart-home control.
One of the first things I learned about sales in our industry is to not think with your own wallet. When you’re selling to the affluent, that’s great advice. At the same time, I’ve also lamented the fact that most people in our industry can’t afford the very systems and components we sell and install.
I guess a Ferrari salesman just accepts the fact that he can’t both be a Ferrari salesman and own a Ferrari. But having a “smart home” shouldn’t be something only the uber wealthy can enjoy — not anymore.
Enabled by phone and tablet technology, and now voice control, more and more consumers are interested in app-based control of their home systems. Total home control for the average consumer has arrived.
But has it, really? Does HomeKit spell the demise of established control brands? Is there an opportunity for integrators to access consumers interested in home technology, but with smaller wallets than the “rich and famous”? It’s certainly been a hotly debated topic for years among integrators and vendors in our industry.
Do we even want that business? Most importantly: is it, or can it be, profitable?
Integrators have found their niche focusing on elite clientele — folks who can spend $100k+ on their home control systems and AV. As an industry, sometimes we’ve been on the outside looking in as “GAFA” pushes into the market. Various startups ride the wave of IoT tech, betting on DIY consumers adopting app-based control for home technology.
I believe there is a strong market opportunity for products geared toward the “X-ennial” and Millennial client, who...
- Is interested in “smart home” technology that is both cool and practical
- Wants (needs!) professional installation and support, and
- Is willing to “trade up” for a reasonable cost to a fully integrated control solution for the home
You just have to know where to look.
The Mid-Market Question Mark
On the last day at the CEDIA Business Xchange this past Spring, there was a group discussion on marketing to Millennials and the next generation — those who grew up with technology and are walking into dealer showrooms asking for Nest and Sonos, specifically.
Do you sell them what they ask for? Are they happy with multi-app control, or is there an opportunity to sell them an integrated control solution? Most importantly, what’s the magic price point that will take someone building a $400k to $800k home from multi-app control to an integrated system?
The reason these conversations were particularly interesting to me is because I found myself in the middle of the planning and design stages of building a new home. As an “X-ennial” (not quite Gen-X but not quite a Millennial), I grew up with technology, though it wasn’t quite as ubiquitous for my generation as it became for Millennials. But our buying habits are similar in many ways.
I realized fairly early in the planning process that I was going to have to face the inevitable question of what I’m going to do with technology in my new house. With access to some amazing products and systems in the industry, there were many options to consider. But a full blown integrated control system — integrated lighting, HVAC, security, surveillance, audio, video, etc. — seemed like too much for my lifestyle, and certainly too much for my budget. How do you weigh the “cool” against the “practical”?
If you’re building a $1M+ home and can drop $50k to $100k+ on an integrated control system including video distribution, there are great solutions out there in our industry.
If you’ve got a 1000 sq. ft. condo with one or two TV’s, HomeKit or multi-app control might do a really great job.
But for that $400k, 3,000 square foot single family home, there really aren’t too many practical options. If this type of homeowner does drop an additional $50k on something, it’s likely on a pool or basement, not a control system (by the way, the pool guy is one of your biggest competitors, not the integrator down the street; but that’s a conversation for another day).
This is where I found myself. And I wasn’t comfortable with my options.
As I was sharing my challenges with Vin Bruno at the aforementioned Business Xchange, he didn’t hesitate in his response.
“There is a company you have to check out. They are well-established in Europe, and just entered the U.S. market. They are putting fully integrated control systems in $300k homes. And it’s affordable. You have to see their show home; then tell me what you think.”
This is the first article in a series about an “X-ennial” — someone who is not quite Gen-X, but not quite a Millennial — in the industry choosing a control system and documenting the experience, from planning, to selection, to design, to installation.
Josh Willits is VP of Dealer Happiness at Portal.io and a contributor to CE Pro. Have a suggestion or a topic you want to read more about? Email Josh at [email protected]
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