The business vision discussed here is intended to create a new generation of houses in the next few years, designed to receive integrated HA systems through the builders, but without forgetting that the main player in this process is the end user.

Selling Home Automation to Builders

José Roberto Muratori | AURESIDE

The business vision discussed here is intended to create a new generation of houses in the next few years, designed to receive integrated HA systems through the builders, but without forgetting that the main player in this process is the end user.

By José Roberto Muratori

Jose Roberto Muratori is an Engineer, System Consultant and Director of AURESIDE - the Home Automation Brazilian Association 

During the last few years, the home automation market tendencies are migrating from single family houses to large condominium projects. This trend is perceived as a "second wage" in HA and demands a different sales approach. In this case, the main difference is that you are selling to entrepreneurs (the homebuilders) instead of to individuals.

Most of the time, to sell HA to families is a matter of subjective aspects: entertainment, security, leisure, sophistication, comfort and so on. The cost / benefit analysis remains not a completely logical decision.

But, if you are selling to builders, the economic aspects of your proposal are critical and the cost of HA implementation, if not correctly detailed, must stop the negotiation. And this is just the beginning… not the only obstacle you will find. During negotiations with builders you can consider three steps until the final approval:

  1. the builder must "buy" the concept of home automation for a specific project
  2. if he accepts your considerations in step 1, normally he will ask: " it's ok, I see value in your proposal, but do my customers (the house buyer) perceive it too ? "
  3. lastly, he surely will ask : " what will occur when the houses are ready for use and these customers want the implementation of the promised HA solutions ? "

So, what kind of tools must you use to correctly answer this sequence of questions ?

Explaining the HA concept

A common mistake made when one tries to sell HA to builders is to detail for them some end users equipment features ... normally an impressive approach ... but not important in this kind of negotiation. It  won't be the builder that will use these features but his customer !

The main aspect you must consider with him during the explanation is the demand for infrastructure in his new project. Cost of infrastructure, cabling and network solutions are normally inexpensive if compared to other costs in the construction budget. "Preparing" the new houses to receive HA solution now is common sense, because customers will require it when they move into the new homes.

So, the HA consultant must develop an economic analysis, taking into account the basic characteristics of the project: localization, targeted customers (social and economic level), selling price, number of houses (or apartments).

Normally, it will be easy to justify the cost / benefit coefficient for this proposal. With a little increase in the budgeted values for the construction (average 3%), the builder will attain a market differential for his venture, guaranteeing more liquidity and profitability if compared to the competitors "ordinary" projects.

Will customers recognize benefits ?

Another objection you will face is that the builder is not confident that his customers recognize HA benefits as well as other featured house characteristics. This is half true. Home automation is a definitive trend, but it is still underestimated by most of the people. On the other side, one must remember that current projects will be ready for homeowners in nearly two years: what about the technology needs for the future? Who will guarantee the suitable (and needed) infrastructure for new houses?

If you really intend to sell HA concepts to builders, you must be involved as a consultant during all of the planning process for the launching of new projects. You, as a HA specialist, will give the guidelines for the advertisement policy, taking care not to promise features that won't be available in the houses. Also it is very desirable that you make some presentations to the sales people in order to explain the HA equipment. This learning process is critical for them and a service you must offer to the builder (remembering that he is not a specialist in this matter).

Using this approach, the probability of success for your HA proposal is higher but an important question remains ... normally the construction company won't be able to deal with the customer's needs to install HA integrated solutions in the new home. More than this, the builder don't want to be involved in this business. Do you have an answer to this question?

The house fits HA needs , but will the customer take advantage of it?

Normally the builder won't ask this question early in the negotiation process, but it will certainly come sooner or later! During the construction process, few people will remember, but the customer is waiting for solutions. Integrated solutions in HA may involve a large number of different suppliers. So, imagine an customer seeking solutions for irrigation systems, audio & video, computers, automatic doors and drapery, security systems, vacuum cleaners, lightning control , HVAC as well as services such as  broadband Internet access, pay TV, video monitoring, e-learning, e-commerce, integrated condominium administration, access control and many others.

To transform these apparent problems into a real business opportunity we need a well organized approach by the HA consultant involved in the process. The builder must be convinced that you have all the answers his customer will ask for. To make him be sure of this, try the following tips:

  • Establish a strong partnership with trustful suppliers of HA solutions
  • Work like a "pool" and furnish designs for a known category of customer. This will result in less marketing effort than customized product solutions (some "kits" may be established).
  • This business model normally operates with better prices and financing conditions, due to amount discounts and reduced publicizing needs. If the builders collaborate, the group may maintain a "showroom" in a real house inside the develpment.
  • Invite the builder to participate as a business partner too, obtaining future revenues through services like maintenance for example. This invitation may motivate him to accept your proposal .

The business vision discussed here is intended to create a new generation of houses in the next few years, designed to receive integrated HA systems through the builders, but without forgetting that the main player in this process is the end user. Using the correct tools for each one, the success of HA implementation will be guaranteed.

The content & opinions in this article are the author’s and do not necessarily represent the views of HomeToys

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