The millennial generation, which accounts for more people than the baby boomer generation, is having a major impact on the security industry, especially within residential security, as the smart home has emerged as something that is not just a fad, but here to stay. The millennial generation is also driving the monthly subscription model, which is good and bad news for security dealers (more on this later). For example, millennials will gladly pay $9.99 for Netflix or Hulu or HBO, rather than locking into a long-term contract with a cable provider.
The following is a look at the types of security systems millennials are buying and most interested in.
Rise of the Smart Home
One of the keys, no pun intended, to understanding the millennial generation is figuring out what really gets them to take out their wallets and spend some money. The answer it seems is smart home technology and gadgets, including those related to security. As a security company, it will become difficult to survive if you are not tapping into and offering some of these cool new smart home devices that are now available, as they provide some additional RMR streams while increasing customer interaction with their security and other systems.
Security can act as the entry point into the whole smart home ecosystem, which the customer can add to over time, increasing RMR for the security dealer, and creating what they call in the industry “stickier” or more loyal customers, willing to spend more money with you as they see the convenience and ROI with smart locks, thermostats, and lighting, for example.
Smart Doorbells and More
Many security companies are offering smart home packages that include different levels of connectivity and devices. Without a doubt, one of the more popular smart home devices that a security company should be selling is a doorbell camera. Smart doorbells are a nice entry point to discuss security, including an overall system to complement the doorbell camera. Plus, allowing to control their security system, including their smart lighting, thermostats, locks, etc., all from their phone is a great selling point for dealers and adds some opportunities for increased RMR.
Which brings us back to that subscription model that millennials love so much. As a dealer, in addition to offering several smart home security packages, you should also offer some a la carte monitoring services and smart devices that you can offer, all of which will appeal to the younger, subscription model-driven customer. Why have your customers go somewhere else to buy this stuff when you are already trusted to bring them security. You have your foot in the door already and should be able to offer these smart home gadgets that millennials are seeking.
DIY Alarm Systems
DIY poses a tricky sales model for security dealers, as it seems to go directly against the selling model that has driven the industry for so long. But what is important to understand is DIY security is bringing greater awareness of what is available in security to your potential customers. And as we know, security has struggled to rise past the 20 percent threshold in terms of the number of homeowners who have security systems today. DIY may help to push that number up.
It is also interesting to see the different go-to-market strategies for the different DIY systems available, from everyone from Ring and Nest to Vivint and ADT. Many traditional dealers are finding it is smart to be able to offer a DIY option to that customer that just isn’t ready for the full professionally installed and monitored system. As many point out, the DIY customer really is a different customer, so you are not stealing from Peter to pay Paul, for example, when it comes to your customer base. And many times, dealers find that customers become dissatisfied with store-bought DIY systems and decide to go with a dealer to have a pro system installed.
Who is Buying DIY Security?
The DIY security market is interesting, but one that requires some closer scrutiny to understand just who is buying these systems. It turns out that there is a mix of millennial, GenX and Baby Boomers who are interested in and buying these systems. And although Baby Boomers dominate in terms of overall spending when compared to other generations, over the next two to three decades GenX and millennial generations will take over.
It is also important to point out the interplay that goes on between generations, as the GenX and millennial generations are informing their parents and grandparents, the Baby Boomers, on what is “cool” and helps to make life easier. So, for example, you will most likely see a millennial buying a video doorbell or Amazon Alexa for their parents than for themselves.
Monitor on Demand
When discussing DIY security it is important to discuss what millennials are willing to pay in regard to monitoring fees, as many DIY systems today come with a professionally monitored option, while others are strictly ‘monitor it yourself,’ or MIY. Another area that kind of falls in between this all or nothing option is monitoring on demand, which is growing in popularity among homeowners and renters, from the family with a vacation home or a millennial renter who would like professional monitoring when he is away for extended periods of time, or during certain times, for example.
In addition to the DIY movement, major security equipment providers like DMP, for example, are embracing this monitor yourself model as well, offering the option for its dealers to sell if a customer is resistant to a monthly monitoring fee.
As noted above, today’s modern dealer needs to stay at the forefront of technological trends, especially ones like the smart home that has taken not only millennials but everyone by storm. This is an unprecedented opportunity for the dealer that understands the importance of adapting and being able to offer these smart home packages that revolve or build out from security. And with mobile access and control now possible, this smart ecosystem extends from the home to our cars and workplaces, and eventually smart cities.
With all of these opportunities available, dealers today also need to make sure that they are working with a monitoring company that can handle all of their customers’ needs, from residential to commercial.