By Rob Fanjoy
With the construction market tightening all around the country, builders should be asking themselves, "Am I doing everything I can to keep potential buyers from going to the competition?" With regard to offering home-automation installation and services, the answer for many is still no.
According to one industry expert, the reason many builders aren't offering home automation is they don't know how to sell it to the buyer. "Many feel that there are too many options on top of all the other options to offer and sell to potential buyers," says Melissa Morman, COO for New Home Technologies, a joint venture subsidiary of Builder Homesite, Inc. "But we've found that when builders simplify the message and focus on the utility and uniqueness of the newest, coolest stuff, most buyers are fairly easily convinced."
New Home Technologies is the supplier of Envision, an options-management solution that allows for more efficient home-automation options marketing for builders and manufacturers. The software platform includes descriptions, features, styles, multimedia presentations and even product manuals and warranties for more targeted marketing to different buyers.
Getting A Leg Up
"The number one competitor for all new-home builders is existing homes," says Morman. "Since home automation is almost always tougher to retrofit into an existing home, builders who offer these products and services can provide something extra to potential buyers."
Morman points out that the largest market segment for home automation is the high-end market because those buyers have more disposable income, but the demand reaches across all markets. "You might not see it in a lot of first-time homebuyers, but many of them are very tech-savvy and will jump at the chance for home automation if a builder offers a package that suits their needs and budget," says Morman.
By focusing on the utility (being able to monitor and control electrical systems from one room or while on vacation) or the potential energy-saving aspects, builders can appeal to many buyers in all markets, from first-time buyers to move-up to empty nesters.
Increasing Your Margins
Many buyers are intimidated by the number of products and options that comprise the home-automation category, but that can also be a boon for builders. By offering different packages of products at different price points for different markets, buyers can see one product package and what benefits that package can offer.
Another advantage: Comparison shopping is much tougher with home automation. If you offer a few options in your appliance or flooring products, for example, a potential buyer can easily compare your prices with another builder's or the local home center's. "But a builder can put together a home-automation package consisting of several different components and give himself a healthy profit margin," says Morman. "As long as the buyer sees the benefits and the builder doesn't go overboard with his mark-up, margins of 30 percent or more are not uncommon."
According to Morman, home automation is going to be a must-have for most new-home buyers in the very near future, and the number of builders who offer it now wouldn't be doing it if it weren't profitable. "A builder who doesn't offer these types of services is at a competitive disadvantage—even now."
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