When we meet with builders who are ramping up their efforts with smart homes, they usually ask ‘Which the best smart home system for us?’ My answer is actually a question? ‘As a home builder, why are you trying to offer a smart home to your clients? What are you hoping to accomplish?’
You really need to consider this. You can’t just say, well smart homes are popular, and you need to offer it in today’s market. That’s true, but that doesn’t answer the question.
Every builder I’ve met with—and I’ve personally met with many builders throughout Idaho, Utah, and Texas—has a very different reason for offering smart homes systems and audio/video products. Here’s a few of the answers I’ve received from builders over the years.
- Purely Marketing – Builders with this response usually don’t care about the client’s user experience or product at all. They simply want the ability to market their homes as ‘smart homes,’ or at a minimum say that they offer smart homes. It’s more of a marketing gimmick than a real smart home. That’s fine, there’s nothing wrong with this, but understandably we’re doing to use a different system and package for this objective.
- Differentiating from the competition – As it sounds, builders will offer a smart home package to differentiate themselves from builders in the same segment of the market. This is becoming more difficult as wide spread adoption of smart homes increases, but it’s still possible to use smart home and audio/video to differentiate from the competition.
- Driving Upgrades – Some builders want a good base system, that offers a legitimate value to the client, but then can drive upgrades for clients. Here’s the challenge with this approach, smart home products usually don’t have the margin that other products in the home have. So we’ve found that builders prefer to drive other selections over smart home selections. But there are upgrade options that make sense, and allow the margin that builders want. This is why it’s so important to tell a perspective dealer what your goals are with the smart home. Prewire packages for example, are high margin and good for builder upgrades, but allow the client to source their own hardware after the home closes.
- Value Add – This has some cross over with differentiating the competition, but I’ve met with builders who want to offer smart home and audio/video systems for no other reason than increasing the value of the homes they offer in the eyes of their clients. I recently met with one builder who said he didn’t even care about making money with the smart home. He just wanted to add legitimate value to the home.
You may have other reasons for offering a smart home, and that’s great as long as you know what it is, but let me briefly cover each of these.
If this is you, my suggestion is to do it in a way that establishes you as an authority in the space. One builder told me he would just market his home as ‘Apple Home Kit’ ready. Neat! What about all your clients who use Android?
A trend we’re seeing with production builders is to use popular DIY products like Nest Thermostat, and market the home as ‘smart.’ This makes sense, but consider the upgrade path of the smart devices you select. Ring for example integrates with very little. At a minimum have some alternates, or upgrades like a DoorBird, for clients who want to be able to grow the system later. This is a great way to show you really understand smart homes, and give clients actual value, even though the main goal is simply marketing.
Differentiating from the Competition
I mentioned already that as more builders include or offer smart homes, it’s tougher to differentiate yourself with smart homes alone, but creativity goes a long way.
I know it’s cliche, but think outside the box here. A little creativity goes a long way, and again can quickly establish you as the smart home authority among builders. Prewire packages are great because they future proof the home, but leave options open for clients to choose hardware after close.
Look beyond popular smart home tech. There’s always a number of new trends that are still related to smart homes. There’s solar power, charging stations for electric cars, and so much more. One that we’re keeping a close eye on right now is low voltage lighting. Any recessed lighting in the home can be ran with low voltage wire, and has a number of benefits for control in the smart home system, and energy savings.
Again suggesting or offering something like low voltage Lighting to a client, is a great way to establish yourself as an Authority among builders in your market, and differentiate yourself quickly from the competition. You might even consider attending a popular trade convention like CEDIA to become more familiar with the space and what all you can offer your clients.
There’s lots of options here. Just about any system you include standard in the home is going to have upgrade options. What you want to understand is that smart home products usually have less margin than other materials you sell as upgrades to clients in the selection phase.
You can make it work, you just want to get creative. Prewire packages have good margin, and have lots of upgrade paths. You could also include something like Control4’s EA1, which is relatively inexpensive hardware, and then drive upgrades for higher margin products, and encourage clients to purchase products like Nest after close.
I think most of what we discussed so far is a value add. If you establish yourself as an authority here among builders, you’re giving value to clients. Many builders, send clients to us, so we can be that authority for them, and help guide their clients through the different options. That still works.
The value doesn’t all have to come through hardware. Just understanding simple design elements can go along way. Framing boxes for recessed speakers, suggesting recessed TV mounts, and pull-down TV mounts for the above the fireplace, or framing the theater identically so that speakers and scones line up on all side of the room. These are little details, but they make a huge difference for buyers. It’s a great place for you to stand out.
As a dealer, it’s great when a builder comes to us and tells us they want to include the same system or package standard in all homes. However, I think that’s bad for the client. I understand why sometimes it’s best for the builder, particularly with production builders, but I think we take value away from the smart home offering.
Smart homes are becoming increasingly personal. With so many products to choose from, very few systems are the same. Today I favor prewire packages, and offering clients sound advice about their smart home to offering hardware standard, but that may make the most sense for you and your clients.
So I end where we began. As simple as it sounds, figure out why you want to offer smart homes to your clients first. Then go out and find the platforms, and solutions that make the most sense for you and your buyers.
Matt is a co-founder and lead systems designer for TYM LLC. His smart home and audio/visual designs have won three “Home of the Year Awards” from Electronic House & CE Pro magazine, and two awards from the Consumer Technology Association, including "Home Theater of the Year", and "Custom Smart Home of the Year".
Matt is a golden State fan.