HTA Update - 06/27/2008 (Plain Text Version)
In this issue:
Take a Proactive Approach to Meet Your Home Buyer’s Technology Needs
For more than a decade home builders have made forays into incorporating electronic technologies into their projects.
Most builders I talk to say some have been successful but just as many have not. As an electronic systems contractor (ESC) it’s been the same for me. The successes were good for my business and good for the builder (he made good money and had zero aggravation). However, the failures cost us both—in time, aggravation, unhappy home owners, and of course, money.
Looking back on those experiences, the failures usually involved a builder who really wanted to ”just not get involved.” The successful projects were ones where the builder took a proactive approach to meeting the client’s technology needs. With 20/20 hindsight I offer four bits of advice to builders who want to make money (with minimum hassle) on this growing part of the industry.
Pick the right ESC for your target client. (In fact, pick two.)
You know the segment of the market you’re going after so you need an ESC that’s focused in that segment. For example, a high end, super-custom shop can probably handle your pickiest, high maintenance clients—but don’t expect fast reactions and strong production skills from them.
Similarly, the subcontractor who delivers a proposal on two sheets of paper and does his design during the walk-off is going to embarrass you with a sophisticated client who is looking for an integrated lighting, security, climate and entertainment system.
So the first step to be proactive is to pick the ESC you strongly recommend to your client. I say strongly recommend rather than insist because there will be clients whose needs surpass your primary subcontractor’s capability. Realizing that before the project starts is the goal.
Too often I meet builders who have just one preferred ESC. When the client gets balky, they end up letting the client pick the sub. Having a secondary sub waiting in the wings—one who might be more than your average client needs but whose capabilities and experience are extensive and proven—keeps your project in your control.
Invest in your own technology expertise.
If you have a good ESC, you don't have to know the details. But you do need to know enough to gauge the sophistication of your client’s interests. Our trade association, CEDIA (Custom Electronic Design & Installation Association), partners with NAHB through NAHB’s Home Technology Alliance (HTA) to provide a range of technology education. I urge you to take advantage of it.
Armed with an understanding of the range and application of modern electronic systems will give you the ability to direct your client’s interests to a subcontractor you’re comfortable with, one who will be an asset in meeting your client’s needs, your project schedule and your profit goals.
If you’re starting to work with a new ESC, attend the first few client meetings. Make sure you’re happy with the way your home owners are being treated and the way the selection process is managed. And while you’re there you’ll almost certainly learn something useful.
The more you hear about what we do, the more comfortable you’ll be directing your client’s requests in ways that benefit the client and your business. Treat it like any other important part of the selection process.
People have either no interest or they love this stuff. For the ones who really want it, it presents the builder with a double-edged sword. They’ll spend a lot but they’ll take forever to make decisions. Knowing this, the solution is to treat electronic systems design process seriously, not as something to rush through right before insulation.
Get the client started with your ESC as early as possible.
Give them firm deadlines for finalized selections and contracts, and insist that your ESC keep you informed about his progress in helping your client meet the deadlines.
Go light on the technology ”standard.” But keep the door wide open for technology upgrades. It’s too early in the adoption curve to know precisely (meaning cost-effectively and profitably) how much tech to build into the project. Builders are justifiably concerned about recovering their costs. The worst reaction to this uncertainty is trying to have it both ways by putting a lot of stuff in (speakers in every room, surround sound pre-wiring, for example) but all of it low quality.
A better approach is to put in a respectable structured wiring infrastructure (voice, data, and video) then let the client decide. Today’s homeowners spend between 3% and 12% of a home’s value for electronic systems. With a range of interest that wide, allowances are a perfect way to address the variation in homeowner interest. If you’ve done your homework with your ESC, the selection process should not delay the project and ought to ensure a nice additional profit on the job.
And before we leave the subject of allowances, there’s a myth that money spent on entertainment and convenience technology will consume money that could have been spent on counters, cabinets and appliances. Rubbish. Show me the man who got a home theater and music system in his home instead of the granite counters and upgraded cabinets. It doesn’t happen. As an ESC I know one important truth: nobody needs what we do (but they all want it). It’s the last area where they spend when the budget hits the limit.
In a market like today’s where we’re seeing fewer clients, our goal ought to be to do as much business with each one as we can. It’s a great time to deepen our understanding of ways to turn former hassles into profit opportunities.
Ray Lepper is President of Home Media Stores, L.C. and a past president of CEDIA (Custom Electronic Design & Installation Association). With over 25 years in the industry, Ray has worked in all the segments of the consumer electronics supply chain, from manufacturing and distribution to retail. Since returning to the US after four years in the U.K., where he headed up KEF Audio, the well known British loudspeaker company, he has been working full time as President of Home Media® Stores, L.C, the Richmond, VA based home electronics systems integration company he co-founded in 1994. Ray can be reached at 804-379-0900 or email@example.com.
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