Expanding to Home Technologies, Part 3: Selling the Benefits

How to work with builders and buyers in delivering home technologies as an adjunct to security systems

Another benefit you must provide is quality. No one wants poorly designed systems that sacrifice quality in exchange for the lure of low cost, when the cheaper alternative does not provide a good experience. Therefore, you as the technology expert must design systems using well-respected and known components. So maybe it's not the coolest and latest gear, but it works well, which is what your clients demand.

You must also deliver excellent customer service. Let's face it, sometimes things fail to operate as planned and a service call to make repairs is necessary. Callbacks and punch lists reflect very poorly on your business. Yet another reason simplicity works so well. Your installers and service people will learn every nuance of the system, so installations and after-the-sale service calls will make you look like the professional you are and generate more opportunities for customer good will and add-on sales.

Creating Collaborative Profits

The next benefit seems so obvious, yet I have seen so many dealers overlook the potential for bottom-line profit, and not just increased sales revenue. In order to be successful in the new home builder market, you MUST provide a builder profit margin in every system you sell. How much profit? Only you and the builder can make that determination, but it has to make sense for both you and the builder. A word of caution: Too much builder mark-up will certainly overprice the system in the perception of the homebuyer, so be careful in how much mark-up a builder says he has to generate in order to make a profit. No matter how you crunch the numbers, 50% of zero sales equals zero profit and marking up technology that much is a sure way to reduce or entirely kill the opportunity. You as the dealer must demonstrate to a smart builder that a 15% mark-up for example, of any amount sold is a positive number and goes almost straight to their bottom line. Price the systems so that you the dealer make a reasonable profit and the builder as well. Anything less and you will be out of the builder's market and soon out of business too.

So, Mr. Security Dealer, are you prepared to offer these benefits as the foundation of expansion into home technology? If so, you have the tools and mindset to be successful through increased sales, additional revenue opportunities and increased profit. If not, then rethink why you are in business in the first place before you venture into this market segment. Remember, it's not about the gear; it's about the customer's experience, so consistently provide these benefits in your company to deliver the best experience possible.

In the next column, we'll present ideas on how to create and sell technology systems that provide these benefits. Until then, work on your business, not in your business.

About the author: Keith Davis is Senior Dealer-to-Builder (D2B) Manager for AVAD, a leading U.S. distributor of custom home electronics. He can be reached via email at d2bmanager@avadd2b.com.