Five Smart Home Business Tips for Contractors
What Does Your Business Need to Succeed in Home Automation?
Much like the lightbulb changed the modern world, smart home technology is poised to infiltrate customer demands and behavior. Fueled by multiple companies and iterations of interactive home technology, the smart product movement doesn’t look like it is going to slow down. In fact, some residential HVACR contractors are receiving an increasing number of requests to install and repair not only unitary equipment but also security and other home automation devices. Add to that the ability for increased sensor usage and predictive maintenance to become the norm in the near future, and it may be time for contractors to consider what their home automation business strategy will look like. Here are five tips to help contractors prepare their employees and their businesses for the smart home movement.
1. LEARN THE BASICS
“Smart home devices rely on an IP network connected to the Internet within the home,” said Scott Cochrane, president of Cochrane Supply & Engineering, Madison Heights, Michigan. “Contractors need training on IP networks and how they operate so they can ensure the delivery of the services the smart device brings the homeowner.”
IP stands for internet protocol, and its network is a communication framework. Any component in the IP network is labeled with an IP address. This address provides the specific location of a device or product that is communicating over the network.
“We offer a basic networking course that teaches contractors how to establish and set up a network with Wi-Fi, routers, and switches,” said Cochrane. “There are three primary concepts that contractors should understand when it comes to smart home technology — how an IP network functions; how to set up and troubleshoot Wi-Fi and internet connections; and understanding mobile operating system software, i.e. Apple iOS® and Android®, and the network settings within.”
Training not only keeps contractors and technicians up to speed with the newest technology, but it can also help reduce labor hours per installation.
“A contractor looking to get started in the smart home space should enroll his staff in best practice trainings for both sales and operations,” said Jason Johnson, connected home program manager for Service Nation Alliance, Coppell, Texas. “For onsite-specific operations training, a day-in-the-life with a technician would be a great start. The training would include system design, sensor placement, sensor programming, checking Wi-Fi (which should be done by salespeople, too), panel/hub setup, zone and communication testing, troubleshooting, application/software setup, and customer training.”
Johnson noted that this type of training will help keep customer experience and retention high. He advised company owners to become familiar with job costing, recurring revenue, and what their local competitors are offering, so they can help their teams understand the benefits of their offering.
2. SELL DIFFERENTLY
Contractors are currently selling comfort and efficiency, but with the smart home product influx, contractors now have an opportunity to sell convenience and connectivity.
“Homeowners want to connect to everyone and everything important to them when they cannot be present,” said Drew Cameron, EGIA Contractor University faculty member, president of HVAC Sellutions, president of Energy Design Systems LLC. “Smart home technology lets homeowners connect, access, control, protect, and secure loved ones and prized possessions. Home security is a more searched term than smart home on Google. Be sure to speak in terms that resonate with homeowners.”
Cameron suggests that the easiest way to sell smart technology is to include a smart thermostat with new systems. With the thermostat, provide customers free access via an app for one year.
“Contractors should also consider offering at least a few levels of bundled solutions that include various levels of features and control and access, as well as security at the highest level with and without a central station monitoring agreement for three years,” he said. “Offer a tiered service agreement program that includes smart home technology (e.g. thermostat, door lock, doorbell camera, HVAC system monitoring, water sensors) that allows your company to monitor the system and determine when it needs service; allows customers to provide access to the home without having to be there; gives customers the highest level of benefits of your HVAC service agreement; and allows for them to pay for the smart equipment, access, and service on a monthly basis.”
3. COVER LIABILITIES
When selling and installing smart home equipment, data security and company liability can become an issue. There hasn’t been enough precedence set that should scare contractors away from installing smart thermostats and security plug-ins, but it is something that companies should be considering in their business plans.
“State laws change frequently, so always work with the local jurisdiction on licensing and permits prior to selling or installing,” said Johnson. “Once you are properly licensed, then having the right installation and service agreements are very important to outline the products and services being installed. These agreements can also limit the contractor’s liability if an issue ever occurred at the premise with monitoring services.”
Cochrane cautioned that home internet providers don’t often ensure security for today’s smart devices.
“While HVAC contractors are not typically liable for cyber security issues, it should be the contractor’s responsibility to educate homeowners on the importance of protecting their Wi-Fi and internet connection — for example, helping the homeowner change the default name of the internet router or explaining the importance of strong passwords and what can happen when you are not protected,” he said. “As the contractor notices vulnerabilities, they should let the homeowner know before a cyber attack affects the operation of the smart home device they installed, which they are liable for.”
Cameron advises all of his clients to consult an attorney to create a sales agreement. When it comes to monitoring homes, he recommends outsourcing this job to a third party.
“Verify with your insurance carrier what type of coverage you need,” he said. “States also require everyone that has access to the customer’s house/system and personal information to be Department of Criminal Justice system security clearance certified by taking a class and test.”
Cameron warned against using the words ‘prevent’ or ‘prevention’ in sales pitches and advertising, and to be careful about what is guaranteed or promised.
“Instead, say that a customer can minimize risk or limit exposure,” he said. “Words have meaning. Words have power. Choose wisely when it comes to marketing and selling smart home security. We teach this in our training.”
4. HIRE THE RIGHT PEOPLE
Smart home conversations can be intimidating, and there are times it sounds like the industry is having an IT discussion as opposed to an HVACR discussion. Depending on the work being done, it is here where contractors have to decide if it is time to hire an IT professional.
“We used to recommend having an IT person with a HVAC person as a way to support IP networks and internet connections for HVAC, but in recent times, smart home devices have become much easier to set up, and young people entering the industry seem to come with natural intuition for these new internet-based devices,” said Cochrane. “We are seeing the challenge isn’t finding young people who understand smart devices, networks, or the internet; the bigger challenge is still to find young people interested in HVAC technology.”
Johnson considers hiring an IT professional as overkill, although he acknowledged that technicians going out on these smart home jobs should be well trained.
“Anyone who may sell, install, or service connected home products at your customers’ homes should know how to test network speeds, and what products the company sells that use Wi-Fi to connect to the ecosystem (application),” he said. “This would include testing upload and download speeds, which is very easy For the other smart home products, they connect through Z-wave, ZigBee, RF, or other connectivity protocols that do not require employees to use the end-consumers network — these are typically programmed into the panel or hub.”
5. GET HELP
Training and partnership can make a large difference in the success or failure of a contractor’s foray into the smart home market.
Not only does HVAC Sellutions offer training on customer communication/care, design/application, security needs assessment and fulfillment, sales, tech communications, and management, but Cameron also suggests partnering with technology providers to offer a private label app that integrates all technology into a single app.
“This provides the ability for customers to receive push notifications for filter and humidifier pad change/clean reminders, seasonal tips, weather event updates, promotions, tune-up reminders, etc.,” he said.
Service Nation offers best practice training through webinar, phone, or training held at the company’s offices in Dallas.
“The company has a sales and operations training manual, and videos that contractors can use to train their employees,” said Johnson. “We also provide marketing content, one-on-one mentoring, consumer contracts and much more. We are excited about 2020 and our smart home program.”
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