Last time, we sketched out a new revolution—invasion, really—that will have a profound impact on the home integration business as we now know it.

Employing broadband connectivity, wireless home devices, cloud storage and personal digital devices, some of the most powerful electronic service companies in America—Comcast, Verizon, Cisco, Vivent and ADT—have begun to roll out wireless home integration packages that offer security and surveillance, lighting and shade control, HVAC energy monitoring and other home integration features using the Recurrent Monthly Revenue (RMR) business model that made them giants in the first place. Offering these integrated, remotely monitored and controlled services for dimes on the dollar, they will rapidly force custom retailers and home integrators to change the ways we do business.

Rob Gerhardt, former president of CEDIA, has been sounding the alarm for almost two years now. In a wide-ranging series of workshops, some sponsored by Lutron, Rob has spread the word about this coming threat (and opportunity), and has organized a group of about 80 independent dealers nationwide into the HomeConnecTeam, who have developed and are beginning to implement a new business model for our industry to compete head-on with the major service providers.

The HomeConnecTeam

The HomeConnecTeam model incorporates a number of features that sets it apart from the approach currently offered by the big service companies:

• More ambitious applications, with the possibility of integrating “aging in home” features; comprehensive lighting control; high water monitoring; and remote turn-off into the mix

• The use of sophisticated control processors such as Prodigy by Crestron, Control4 or Savant Systems. (Comcast and ADT by comparison are using a relatively untested processor named iControl from a new start-up company.)

• A comprehensive, integrated in-home walk-through approach to sales and engineering, supported by POS software developed by Group Gerhardt, to easily capture client needs, survey the premises (to identify intrusion and surveillance points and control methods), specify lighting control needs based on an analysis of actual layouts and behavioral pathways, as well as sophisticated power management tools, which demonstrate energy savings and allow pay-back predictions for specific product combinations for this customer

• Unique visual simulation products, which demonstrate lighting control, shade control with associated energy monitoring, plus surveillance camera layout and images. It’s like bringing the showroom right into the client’s living room.

• Powerful, server-based budget-building software

All in all, Gerhardt has developed a very sophisticated in-home selling machine, which reflects both his college experience selling door-to-door, as well as his years of success in the home security business. And he deserves further credit for spreading the word on the not-so-sexy but very powerful benefits of recurrent monthly revenue, both as ongoing “passive” profit, but also as a means of accumulating wealth by selling accounts. The sidebar, “The Power of Recurrent Monthly Revenue,” illustrates these benefits.

Over the past few months, his team has developed a comprehensive “inbound” Search Engine Marketing (SEM) program, which combines Pay Per Click and Search Engine Optimization with Conversion Rate Optimization (CRO). Sales leads are cultivated by a team of trained phone “responders,” who briefly qualify the caller, answer basic questions and then schedule an appointment for the appropriate team member.

All dealers participate in this “marketing co-op” program, and share the cost of development. The CRO software automatically improves the marketing process through dynamic testing and optimization. Launched in 19 markets in February, the approach is currently yielding more than two appointments per 100 visits to the common website, www.homeconnecteam.com. The immediate goal of the co-op is to refine and optimize this marketing approach as rapidly as possible, at minimal cost, to launch the local businesses of the members.

For more information, please contact Rob Gerhardt directly at 404-510-9264, or at rob@groupgerhardt.com. CR

George E. McKechnie, Ph.D., is President of Axiom Home Theater in Monterey, Calif. His company is a member of HES (ProSource), and has contributed to the Group Gerhardt initiative. Thanks to Rob Gerhardt for his help in preparing this report.