With new home buyers increasingly looking to enjoy the benefits of the smart home, builders are in a position to add value to their offering — while setting themselves apart from the competition — by including networking, distributed audio, security, and other technologies as either a standard feature in their builds or an add-on option. However, many builders are hesitant to dive into the world of home technology themselves, or don’t have the resources to provide buyers with customer service after the sale, and turn to the expertise of AV integrators.
While this provides integrators with an opportunity to break into a new market and increase their revenues, working with builders poses a unique set of challenges. To help prepare them, Kevin Murphy, Legrand‘s national builder sales manager, Electrical Wiring Systems, and Nichole Weinman, general manager for JAAM Electric, sat down to discuss what they can expect and how to create successful relationships with home builders.
CE Pro: What are some initial steps an integrator should take to start on the path to a profitable builder relationship?
Nichole Weinman: First and foremost, they need to have clear-cut product allegiances, making sure the manufacturers they align themselves with know-how to support integrators that work with builders, because it’s very different than working with an end user. They also need to make sure that they have a solid business roadmap, with programs, manufacturers, and employees in place.
Finally, any options programs should be endorsed by the builder before meetings with home buyers in design centers or model homes, because not all builders will allow for option upgrades. Some only offer standard packages and others allow for unlimited customization. It can vary greatly.
Kevin Murphy: Other key factors for integrators trying to break into the business include understanding the voice of the customer and the services they expect, communicating properly with all parties, and doing what they say they are going to do. You can have the greatest products and manufacturers, but if you don’t show up on time and aren’t a reliable source, you’re not going to last long in this industry.
CE Pro: What technologies are the most in-demand from home buyers right now?
Nichole Weinman: There have been some changes to the technologies driving the smart home over the last year or so. While things like thermostats, door locks, security systems, and distributed audio systems remain popular, there has been a significant uptick in the demand for wellness technologies, such as smart air and water sensors, and circadian lighting. But of course, the number one thing on any builder’s technologies list is the network, which is the backbone of the smart home. So for an integrator who’s looking to get a meeting with a builder right now, they need to go in and talk about networking.
Kevin Murphy: With our Luxul brand of networking equipment, we’ve come to understand that the name of the game isn’t necessarily offering home buyers automation packages, but allowing them to go out and buy retail products off the shelf and add them to their home networks. And for the devices that can’t be hardwired to the network via Cat5 or Cat6 cable — which provides a faster and more secure connection — strong WiFi coverage in the home is critical.
With that in mind, we introduced our WiFi Assurance Program. Basically, Luxul engineers create the network design for integrators, and these certified wired and wireless designs are guaranteed to meet home buyers’ reliability and performance requirements relating to WiFi for three years.
CE Pro: What are some expectations builders have for integrators they work with to maintain a strong relationship?
Nichole Weinman: They expect an integrator to be structured to support them from A to Z — from construction to the white glove service with homeowners after the installation. Integrators have to be service-minded, be able to comply with schedules, and take care of the homeowner after the fact. They can’t just be an integrator on the construction site.
Integrators working with builders are also typically brought in very early on in a project because the builder will want their insight as to which technologies to put in model homes and what to offer in single versus multi-family dwellings. Builders will expect them to respond quickly — not just in the bidding process, but also the construction process — and bring them the latest and greatest technologies so they can compete with other companies.
CE Pro: What are some builder-integrator relationship pitfalls and best practices for avoiding them?
Nichole Weinman: Honesty and transparency are critical. As part of that, it’s important integrators avoid restructuring their businesses to meet the needs of different builders. If there’s a request that just doesn’t make sense for their company, they need to be truthful about it.
Along those lines, if they’re concerned about a product the builder is looking into — whether it’s due to a lack of field testing or support — they need to let them know and explain their reservations. And it is imperative that integrators understand the contract they’re signing with a builder — from a business, financial, and operational perspective. These contracts will tie them to a service timeframe, and include things like insurance that they need to understand.
Kevin Murphy: While builders understand that integrators need to make a profit, they also want to keep costs as low as possible. That really underscores how important it is for integrators to understand those contracts and what the potential costs to them might be. This needs to be factored in during the bidding process to ensure a reasonable profit margin. Integrators need to know where their profit is going to come from, whether it’s from a standard technology package or a combination of a standard and option sale.
CE Pro: How does a company such as Legrand support their dealers with marketing collateral, leads, etc., for connecting with home builders?
Kevin Murphy: One way we support integrators is through special pricing arrangements (SPA). Once we know that we can count on their business, and they are working with builders we have agreements with, we will get them the best possible pricing that we can through distribution.
Other times we are contacted by builders looking for integrators to make bids, and we are able to make referrals. As far as marketing goes, we provide collateral created by our graphics and design teams when there are options being offered that include our company, and we’ll also co-brand marketing materials if the opportunity arises.
CE Pro: How often does one successful new construction development project lead to repeat developments?
Nichole Weinman: If integrators can show the builder that they can bid a project at the right number, meet construction schedules, work with their buyers, sell options, and support their customers, then integrators will almost always end up with repeat business. In my opinion, builders are extremely loyal. So while working with them isn’t always easy, it is an integrator’s best chance to have long-term customers and revenue.