How do I calculate this?
To serve a broad range of customers, flexible pricing models are essential. Here are some ideas on how integrators can adapt their smart home pricing strategy to customer needs:
Rethink subscription-based models: The subscription-based model is “old hat” for security professionals, but as homeowners look to add new devices, integrators may need to consider what support needs to be provided to ensure those devices continue to function smoothly. Don’t be afraid to customize the subscription model or offer several different options to meet a customer’s needs.
Gradual product upgrades: The rapid pace of technological advances in smart home products requires a flexible approach to pricing. Integrators should be prepared to adjust pricing to accommodate new market entrants, seasonal fluctuations in demand, and new consumer trends.
This agility can be facilitated by a close relationship with distributors who can provide insight into market dynamics and product availability. There will always be customers who want to integrate the latest and greatest technology into their system. Most of the time, these are simple additions for integrators – they just need to make their customers aware of availability.
Present your “menu” in a new way: Similar to product upgrades, many customers aren’t aware of all the services an integrator offers unless presented to them. A good place to start is by presenting a base package with additional menu add-ons and how they can enhance the homeowner’s lifestyle. From there, a customer consultation can help identify other key areas for upgrades and add-ons.
If you ask a homeowner what their biggest problems are, it might be that they always forget to close the garage door or that they want to be notified when their kids come home from school. These are simple additions that can add a lot of value.
Financing options for consumers
To further improve affordability, integrators can consider financing options by partnering with financial institutions or leveraging fintech solutions. This can enable customers to invest in smart home technologies without being burdened with significant upfront costs.
Options include:
Individual payment plans: Security integrators can work with financing partners to offer customized payment plans to suit the financial circumstances of different consumers. This could include low-interest financing over a set period of time or flexible installment plans to meet different budget needs.
Hire purchase options: By allowing consumers to lease smart home devices with an option to purchase, integrators can cater to those who don’t want to commit to a specific device right away. This approach can also facilitate regular upgrades and ensure consumers always have access to the latest technologies.
These financing solutions can help overcome pricing barriers and make smart home technologies accessible to a wider audience. Dealers can also play a role in facilitating financing options that integrators can offer their customers. By negotiating favorable terms with financial institutions or offering their own credit solutions, dealers can help integrators overcome one of the biggest hurdles to customer adoption.
How distributors can help
The relationship between integrators and distributors is fundamental to navigating the complexity of the smart home market. Distributors are more than just a middleman in the supply chain; they are strategic partners who contribute to every aspect of the dealer’s business model.
Distributors have a wealth of data on market trends, consumer preferences and product performance. This information is critical for integrators to refine their pricing strategies, anticipate market changes and adapt their product offerings to meet new needs.
In addition, distributors offer valuable training and support services that enable integrators to stay ahead of technology. This support goes beyond product knowledge to include insight into installation best practices, system integration and troubleshooting.
Distributors can act as partners with integrators and offer flexible pricing and financing options, enabling integrators to better serve their customers.
As the smart home market continues to grow, integrators and dealers must work closely together to navigate the complexities of pricing and financing. By adopting flexible pricing models, offering financing solutions and leveraging dealer support, integrators can meet the evolving needs of consumers. Ultimately, this collaborative approach will not only drive the adoption of smart home technologies, but also ensure a sustainable and profitable business model for integrators.
Dennis Holzer is the executive director of the PowerHouse Alliance, a consortium of regional technology wholesalers. https://powerhousealliance.com (412) 973-7974
