Interest in smart home and home automation products is growing by leaps and bounds every year. And it’s no longer just about Wi-Fi thermostats. The market now includes smoke detectors, smart locks, doorbells, lights, and digital assistants, like Amazon Alexa and Google Home. In 2016, 80 million smart home devices were delivered worldwide, a 64 percent increase from 2015, according to a report from IHS Markit. That number is projected to reach 477 million devices in 2020, per the report.
This market offers the opportunity to increase add-on sales and improve profitability. Now is the time for HVAC contractors to add these products and services to their businesses, if they haven’t already.
American Residential Services (ARS) began offering Google/Nest products last year. The NEWS recently had the chance to chat with Luis Orbegoso, president and COO of ARS, about why the company got into the smart home market and how it has benefited since.
The NEWS: When did you start selling Nest?
Orbegoso: We began offering the Nest Learning Thermostat as a standard component on our Better and Best HVAC systems sales in May 2017. In September of last year, we added Nest Thermostat E as a standard component on our Good system configurations, coinciding with the launch of this new product. In December, we partnered with Google and launched a campaign that included a Google Mini with every purchase of a Nest product. Since then, we have expanded to selling both Nest and Google products across our organization.
The NEWS: What made you want to offer home automation products/services to your customers?
Orbegoso: There is an obvious connection between smart thermostats and HVAC systems, so this was a natural entry point for us into the smart home space.
The NEWS: How has offering these products benefited your company?
Orbegoso: For us, it’s really about having a different conversation at the kitchen table. Some customers are already asking about these smart home products, but for many, our conversation is an introduction to the smart home. We feel that by offering and educating on these products, we are differentiating ourselves from the competition.
The NEWS: Do you offer any other home automation products or services to customers?
Orbegoso: We are currently offering Google/Nest products. In addition to these primary smart home products, there are over 30,000 products that work with Nest, so the opportunity for us to expand our offering is potentially significant.
The NEWS: How do you sell home automation to your customers? What is your process?
Orbegoso: The natural conversation begins with the Nest Learning Thermostat and Nest Protect Smoke and CO detector. HVAC is a core competency for us, and introducing the smart home through Nest’s amazing product and technology was a very easy transition for ARS. From there, we introduce the consumer to the suite of products that easily integrate to help them understand and see the benefits of how the smart home can make their lives better.
The NEWS: Who is your target audience/demographics for these products? Why?
Orbegoso: Any homeowner interested in improving the energy efficiency, safety, and security of his/her home. The way these products work together is remarkable. For example, if smoke is detected, the Nest Protect will communicate to the Nest Learning Thermostat to shut the a/c system down, preventing the smoke from circulating through the house. The family of products within this robust Nest ecosystem offers an amazing array of features and functionality just like this.
The NEWS: What are some best practices to keep in mind when it comes to selling home automation?
Orbegoso: Most customers have heard the term “smart home” but aren’t really sure what that means, and the idea of home automation can seem intimidating and expensive. We really try to simplify the process by introducing a few foundational products that make the most sense to easily integrate smart technology into their everyday lives. We typically ask a few simple questions to gauge their interest, and then we attempt to educate them on what products might be best for their home. It’s simply about educating consumers on what the smart home can mean for them and their family and helping them to visualize how the Google/Nest ecosystem can make that process easier.
The NEWS: Do you think it’s important for HVAC contractors to get involved and own the home automation market?
Orbegoso: One of the reasons why this was such a natural extension of the ARS service offering is that our technicians are highly trained and highly focused on customers’ unique needs. Without a core group of skilled technicians and talented managers, the execution of extending beyond HVAC wouldn’t be nearly as successful. I believe our special relationship with Nest and Google also gives us an advantage over most HVAC contractors. Home automation can be an important complement to an HVAC contractor, but it’s not going to be a fit for every company.
The NEWS: What advice do you have for contractors thinking about adding these products or services?
Orbegoso: Make the decision based on what your workforce can easily integrate on the front end. Launching this in your business is about adoption and buy-in from the team first and foremost. Then it’s about having a simple conversation with your homeowners that allows them to take their first steps into having a smart home. We are very proud and excited to have a national partnership with Google/Nest as we move forward with this endeavor. As a leader in the HVAC space, we believe that by partnering with the clear leader in the emerging smart home space, we have positioned ourselves to succeed in bringing these game-changing and beneficial technologies to our customers.
Publication date: 4/30/2018