Articles and whitepapers

Transitioning from Commercial to Residential Installation (6/2/2006)

By Robin van Meeuwen, Crestron UK

There can be little doubt that the residential install market is set to grow significantly over the coming years. Up until now, custom install and home automation has been almost exclusively concerned with the high-end of the residential market - but that is changing. Property developers, house builders and forward thinking home-owners are all waking up to the benefits of what might be called the 'digital lifestyle'. In fact, the market is expanding on all fronts - from the consumer looking for a simple 'out-of-the-box' home cinema system to the well-heeled businessperson realising their dream of a completely automated home.

These conditions have been good news for installers working in the residential market. As an example, CEDIA, the trade body representing the residential custom install market, has seen a 40% growth in membership in the last eighteen months alone. These figures demonstrate that forward-thinking installers are recognising the potential in the sector and helping to drive this 'home revolution'.

Forward thinking installers are helping to drive the home revolution

For those bold and willing enough to make the commitment, the residential market also represents a great opportunity for the commercial installer. However, simply applying commercial market expertise to the residential arena will not be enough to guarantee success. Selling into the residential market requires a change of emphasis and approach in order to reap maximum reward.

The success of any project, depends on the contractor having a complete understanding of the client's requirements and expectations, and there are key differences between commercial and residential customers. Failure to understand this will result in a dissatisfied customer - regardless how well the installation is undertaken or the systems perform.

Commercial Sales

In the commercial world, we are used to dealing with a variety of clients, such as commercial enterprises, educational establishments, government departments, local authorities or private events and conference facilities - all of whom have very definite and differing requirements. They may well be looking to enhance their business position, improve communication or cut overheads, but importantly, from the installers point of view, they will all have a good idea of exactly what they want to achieve from the installation.

Over time, a typical commercial installer has evolved to suit this market. Often a larger organisation (average size 15 to 35 employees) than seen in residential, it generally has a skilled sales force and engineering team. They are unlikely to have an in-house showroom and tend to pitch for large-tender projects which can be highly competitive. Sales are mostly achieved through pro-active visits directly aimed at facility managers and audio/visual principals. This type of operation will have lower margins than found in residential work, with the main (profitable) income generated from service contracts.

Effective project management is very often at the top of the 'wish list' in a commercial sales environment, with the ability for off-site building and partial acceptance testing also required. Traditional commercial clients are also looking for tailored service-level agreements with preventative maintenance clauses. Importantly, you are also dealing with large organisations, so there should be little risk regarding payment. It is worth noting however, that the people with whom you are dealing are not spending their own money, and therefore have a different mindset than in the residential market.

Residential Sales

The typical residential installer will be a small company (1 to 10 employees) with a limited number of sales people and engineers - most probably with a hi-fi background. Installers used to operating in this market do have in-house showroom facilities, as nothing helps more in closing a deal than showing clients the products in practice. Sales are achieved by a combination of the profile of the brands they carry, recommendations from happy clients, and from successful relationships with developers, interior designers and architects. This type of activity has, in the past, generated significant margins on installs, without necessarily providing the service contracts seen throughout the commercial sector.

The commercial installer's system integration skills and technical knowledge - which have been developed, refined and applied in the competitive commercial market - are highly sought after in the residential sector. However, the customer base is completely different. Historically, typical residential clients are wealthy, very often with a high profile, and perhaps with a keen interest in technology and gadgets. Oftentimes though, they do not know what they want, but have an idea of how much they want to spend. The solution they are looking for will enhance their lifestyle by integrating technology into their home - a certain way to impress friends and family.

Residential clients often have a keen interest in technology and gadgets

The residential sales approach is also far less technical than in the commercial world. It is more reliant on product brands, but the trick is not to sell the client 'products' as such, but to sell a 'solution'. By this I mean do not be too specific about products in the early stage - focus on what the products actually do. In this way, you are selling the customer the lifestyle benefits of home automation - a sure-fire way to make your proposal more appealing. Do not forget to communicate with the client - at this level, everything is an emotional experience. I would also counsel that you sell into the family as a whole. Traditionally, sales have come from the male of the household, but this is really changing, and now we are faced with a great opportunity. Treat the family as a unit, with sales messages suitable for each individual.

When in communication with the client, do not promise or sell something you are unable to deliver. Also, do not underestimate times for completion. If you allow extra time at the beginning, the client will not expect miracles, but will be pleasantly surprised if you complete quicker - it is all about managing the client's expectations. If you do encounter delays, problems or errors, it always pays to be honest - the client will respect straight talking.

Once you have ascertained a client's requirements and expectations, put forward a clearly-priced design, with additional options/facilities that can be added. Once a client has bought in to the solution, they are often quite happy to shop from a 'menu' which clearly sets out the extra costs. Do not be tempted to cut prices to suit a client's budget, and do not undervalue your design and installation contribution. But don't forget - the client wants a solution that fits their budget and their needs.

System Design

The importance of accurate project surveying cannot be underestimated. Client requirements can vary significantly even when properties are identical, and few residential clients are aware of all the technological possibilities that are open to them. Additional modules the client may not have considered, but which are simple to add into the system could be:
- IT
- CCTV
- Telephone systems
- Door entry
- Blinds
- Automated gates and garage doors
- Centralised vacuum systems

Undertake accurate surveys, take pictures for your records and examine cable routes. Prepare drawings, cable schedules and control system logic diagrams. The client should sign off the design to ensure full understanding of the project. You are then free to build to that design. Again, an obvious point, but one which certainly saves time, not to say embarrassment, at a later stage, is to build, program and test the system off site before delivery.

The effort and professionalism put into a £10k project should be the same as the effort and professionalism put into a £300k project - especially as the majority of new business comes from referrals. You never know who your client's friends are and what new business could be around the corner. Always follow a project through and complete as promised regardless of cost - if you have misquoted it is your fault, not the client's.

Customer relations

The cheapest and most effective form of marketing and advertising is personal recommendation from customers - use this to your advantage. When commencing work on-site, a client has placed faith in you or your salespeople to invite your company into their home. Ensure that your staff are aware of this and that the correct delivery of each job is what their continued employment relies on. Always be prepared to go back to a client and make changes during the first three months, and include this in your quotation costs. Do not shy away from servicing and maintenance - charge for it, and use it to your advantage to make money and provide a service. Remember, it is much easier to retain a happy client than it is to get a new one.

Conclusion

In the residential market, the most important aspects are trust, communication, and emotions. In this sector you are dealing with the most personal, intimate, and private places of all - the home. It is the place where we relax, unwind, and enjoy ourselves. For these reasons, the residential customer can be demanding, so keeping the client happy can be a fine balancing act. But for the installer ready to take on the challenge, the rewards can be high.

Robin van Meeuwen is the Managing Director of Crestron UK. Crestron is a leading manufacturer of advanced control and automation systems.

www.crestron.com