Going for the Gold in Home Security

A Q&A with Tom McKinney of ADT regarding residential video surveillance, home automation and the convergence with consumer electronics

There was a great point I heard recently that formerly when you made a telephone call you were calling a location, and now you're calling a person. I think everything is moving that way. For 100-plus years, ADT protected properties. Now we've taken the security umbrella from the property to the person and to their vehicle. It's a complete umbrella versus just providing protection for the home. The broadband connections and the easier transmission of voice, video and data along that path, and the key thing we've seen is to keep it very simple and not try to overcomplicate things. As to the point we made earlier, the buzzword of "home automation" has been around for years, but no one has fully been able to drive that home in a mass market. We see the technology, pricing and service all coming together now to make it very affordable for the affluent market.

A typical scenario would be that I could bring up my security console on my PDA, Blackberry or TV with the same look as if I was standing at the keypad in the kitchen. I can bring up that same keypad and arm or disarm, check appliances, remotely take a look at the beach house, and be able to fully operate all of my sub-systems from an easily controlled web portal. I think that's really where we're looking. I don't think that's so much an idea for the future, as I think it's here today and we're working through that as we speak. Just as we see that convergence happening on the commercial side, we also think it's happening very quickly on the residential side.

When you look at the Custom Group in particular, we're very proud of this because we're taking all the expertise we've acquired over years in the commercial space and are going to be able to continue to brand across the residential channel. We feel like we're the only current national provider that's able to offer this with a dedicated team, dedicated sales people, dedicated installers, dedicated monitoring centers, to offer a very high-level concierge type service to that end-user. As an example, we provide one phone number that is answered live 24/7 for whatever questions that customer may have related to the security side of the equation, so we really try to customize it for them.

How do you set up the pricing?

In the custom space on the installation we have a la carte pricing and it's contingent upon the size of the application. But back on the monitoring side, we do have some preconfigured service offerings that cover things like the VideoView, flood monitoring, critical conditions monitoring (low/high temp situations) as well as intrusion, fire and carbon monoxide. People are seeing that it could be in the range of $40 to $45 per month, and then many of them may pick up the extended service. So within $50 to $60 per month range - a very comfortable monthly range for these affluent homeowners - they get full service. That range could include the VideoView; it depends on how they choose the elements.

I understand you have a facility in Kansas City. Is this going to be dedicated to the Home Gold service?

It is. The key factor for us, of course, is redundancy. We can move signals out of Kansas City if we need to, but we use a dedicated group in Kansas City for the Gold monitoring platform, so we have to apply market science up front to identify who is custom and who is a custom prospect. And then we identify them from the inception and we move them through a very unique process flow, where we service and monitor them from Kansas City using our Gold preferred monitoring team. It's kind of like a frequent flyer or the Marriot Gold program. Those consumers who are familiar with the operating systems and who have higher needs complexity, those are the folks that we bring into the Gold service.