I’ve often been called a visionary because I started cyberManor, one of the first custom home technology integration companies in the United States, in 1999. Then, the focus was to use a broadband internet connection, a router, and a network switch to serve as the backbone of what is now commonly referred to as a smart home. That same year, Cisco filmed a smart home video at cyberManor, touting these technologies as the future of all new and existing homes.
Twenty-five years later, the smart home is now part of our everyday lexicon. It is no longer a futuristic concept, but now exists in every city and state in the country, with an average of 22 smart devices in every U.S. household [Source: Deloitte Insights]. Mission accomplished — so what’s next?
The smart home infrastructure has been built. We now need to build the service infrastructure to support all these smart homes reactively and proactively on an ongoing basis to ensure that every homeowner receives the maximum benefit and enjoyment from their evolving smart home systems.
As challenging as it was to build up a nation of smart homes, providing an ongoing, reliable, reactive, and proactive service of all these smart homes in a profitable manner will be even more challenging. A leading industry player recently sent out a survey to over 30,000 customers on how happy they were with their smart home systems. Customers provided an average Net Promoter Score (NPS) of only 40 out of a possible 100.
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This low score means that the average owner of a smart home system is dissatisfied and is unlikely to recommend our channel’s products and services to others. To be fair, clients of some custom home integrators would give a higher NPS score. There is no greater challenge and opportunity in our channel than providing home technology support services for this frustrated client base. There is also no better way to increase the value of our businesses than by providing these services.
This also applies to the customers whose systems were installed by other custom integrators. Over the last two-plus decades of smart home technology, most clients have seen their primary custom integrator leave or go out of business. Fewer than 10% of the custom home technology integrators in the San Francisco Bay Area that cyberManor company competed against in 2000 are still in business today. By definition, most smart home customers in the San Francisco Bay Area have had to seek out at least one, if not more, new custom home technology integrators to help maintain and service their systems.
To date, how has the industry responded to these unhappy, stranded clients? Not very well. Taking over the home technology issues of a homeowner is not a strength of the custom installation channel. This is due to many, if not all, of the following reasons:
- Most custom home technology companies’ technical resources are typically at capacity just serving their existing customer base.
- Customers with service issues typically require a much faster response time than project-based customers, where some projects can take several years to complete, placing a strain on technical resources that are primarily dedicated to project completions.
- Addressing the smart home issues of a new client can be extremely challenging; equipment is often outdated, wired and wireless networking infrastructures may be compromised, and software and firmware versions may be out of date or incompatible. It requires the most senior technicians with the greatest experience and broadest range of home technology troubleshooting skills to tackle these challenging issues.
- The customer is frustrated that they paid a lot of money for technology that no longer works well. The senior technician on these troubleshooting calls must also possess great interpersonal skills to help diffuse these tense initial service visits.
Those home technology companies that excel at providing reactive and proactive services to these dissatisfied customers will be the ones that will prosper and be most valuable over the next several decades. The following is a typical meeting scenario that serves to prove this point.
A customer who praises their custom integrator for their outstanding service will be the same customer who might someday be sitting in a meeting with their custom builder, asking to build their new dream home. That builder, or architect, or interior designer, will most likely tell the client that ABC is the best custom integrator in their area and they should be chosen for the new home’s technology systems. The client responds back with, “No, I already have an integrator that I trust implicitly who takes care of my ongoing needs, and I want to use them for my new home project.” The conversation as to who will be the new home’s technology integrator is done.
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Throughout my home technology integrator career, I have witnessed this conversational exchange multiple times, and there is no better way to influence a new builder, architect, or interior designer to use your custom integration company on an ongoing basis than to prove to them that your project skills on this first job are as great as your service skills. Conversely, a relationship with a trade partner is highly dependent on the ongoing relationship of the custom integrator principal(s) and trade partner principal(s). If anything disrupts that relationship, it will have a significant adverse effect on the financial health and value of the custom integration company. A strong, ongoing home technology service relationship between a custom technology integrator and a homeowner lasts a lifetime.
When I started cyberManor, we initially sold networking equipment to our residential clients, most of it being used for just home office applications. As time progressed, that networking gear became critical to the home’s entire technology infrastructure, from distributed audio/video, security systems, and control. For every dollar that was spent on home networking gear, $10 would be spent on all the additional equipment that was attached to that network, and our business and profitability grew rapidly. CEDIA had a related tagline: “Own the network, own the home.”
Fast forward to today, and a similar business model holds true. For each dollar of recurring home services that you sell, you should be able to attract $10 of project-based revenue over the lifetime relationship with the client, because outstanding service leads to clients needing and wanting more home technology equipment. CEDIA’s new tagline should be: “Own the ongoing service, own the home.”
As a custom home technology integrator, your success is directly related to the quality and performance of your team and how you prioritize these scarce resources. Nothing will enhance the success and long-term value of your business more than prioritizing the provisioning of outstanding reactive and proactive home technology services over the long term.
The smart home is still in its infancy, and it will need outstanding professional, long-term, recurring service care for decades to come.
