Buy a brand-new home, and chances are, the heating and air-conditioning system will come with a Wi-Fi thermostat.

For Rob Minnick, owner, Minnick’s Inc., Laurel, Maryland, that’s no surprise. He’s been working with smart thermostats since they hit the market.

“We sell a lot of ecobee, and if any high-end systems are installed, we deal with Carrier and Lennox,” he said.

Smart thermostats make up about 90 percent of his total work that deals with thermostats in any capacity.

In Phoenix, Rich Morgan, owner of Magic Touch Mechanical, has a similar report. Smart equipment makes up about 20 percent of his company’s total business: mostly IoT controls, and mostly coupled with new installs.

It’s a well-known fact that HVAC — the smart thermostat — is the first point of entry into smart-home sales. And with more than half of U.S. households predicted to own a smart speaker by 2022, according to a late 2017 study by Juniper Research, it’s a prime opportunity for HVAC contractors.

GO ALL IN

For contractors who want to be competitive in the smart-home business, the first thing to do is to get the entire company on board, from top to bottom, said Gene LaNois, head of pro channel at Nest.

“The No. 1 piece of advice I would say is decision-making,” he said. “You have to decide that you want to be in this business.”

LaNois compared the burgeoning IoT industry to the rise of ductless air conditioning.

“If you go less than 10 years back, it (ductless) was looked at as a new area of business,” he said. “Contractors had to decide they wanted to be in that business. So some of them started saying ‘we do ducted systems, we do boilers, and oh — we do ductless.’ Now, it’s hard to find a contractor who doesn’t do ductless … and it has to do with the HVAC contractor deciding to be in on some of that business.

“The HVAC contractor does not need to abandon the business that made them successful,” LaNois continued. “Everything that we’re bringing to the traditional HVAC business is 100 percent incremental. There’s no huge investment that a contractor needs to make, besides deciding and identifying themselves as being in that business. They don’t need new trucks, a new labor force, new tools, a new phone number, or a new website.”

While making that decision doesn’t mean a major shift to the company, it does require commitment on the contractor’s part.

“They announce it to themselves, to the world, and certainly internally to their employees,” said LaNois.

In terms of getting team members on board with smart technology, LaNois’ advice was straightforward: Put it in your home — and put it in your employees’ homes. Not only will they be comfortable using and explaining the product, but they will be able to give firsthand testimonials about the benefits from a homeowner’s perspective as well as that of an industry professional.

Chris Hunter, president and co-owner, Hunter Heating and Air LLC, Ardmore, Oklahoma, was introduced to the home automation market last year by the Service Nation Alliance and Honeywell. As with Morgan, a lot of his employees use smart technology themselves — at the very least, a smart thermostat. It’s the old adage: there’s no zealot like a convert.

“When you put it in your home, not only is there the ‘aha’ moment, but I’ve personally watched contractors immediately pull their phone out of their pocket and say ‘hey, this is my house’ to their customers,” LaNois said. “They’re showing the cameras, showing the controls … that’s the turning point, right there.”

As far as how to manage installation of non-HVAC IoT technology in a smart-home setting, the verdict was still out.

“For commercial clients (EMS systems), we coordinate with other contractors and subcontractors,” said Morgan. “For residential, we give them referrals or sometimes subcontract, depending on the device and project.”

Hunter opted to add full smart-home services to his own company’s offerings.

“Since we also do electrical, this is a natural add-on service for us,” he said. “Today’s consumers want to make one call and have someone that can do it all. We are installing smart thermostats, home security systems, video doorbells, door locks, light switches, cameras, leak detectors, and lead shut-off valves. Honeywell is the main brand, but the thing I like about their platform is, it can work with other brands as well. The door locks are by Kwikset or Schlage. The video doorbells are by Ring. Anything that is z-wave will work with their system.”

SMART SALES

As with any sale, getting customers excited about IoT products means addressing their wants, needs, and concerns — and, potentially, providing some education upfront.

Since smart thermostats are still relatively new to the market, Minnick is one of only two in his service area installing them. Most of his customers aren’t really aware of smart technology, he said.

With those customers, Minnick and his team often use a conversation about maintenance to jump-start a conversation about IoT solutions. Minnick has been doing a lot of work with Emerson’s ComfortGuard system, which monitors the heating and air conditioning system, generates expense reports, and sends the homeowner and the contractor an alert if anything needs replacement or is about to fail. It works with a typical system, not a high-end communicating system, so it can function as a stepping-stone for customers who are still new to smart technology.

“A lot of times, the homeowner will ask about maintenance … or if they don’t, we will bring it up,” he said.

Minnick emphasizes to customers that the ComfortGuard is all about being proactive.

“The tech really doesn’t have to do a diagnostic; we know what part to take, so there’s that reduction in cost,” he said. “It’s also getting us out there before the customer gets home at night, panicking and giving us a call.”

Explaining this to homeowners, especially if they’re hearing it for the first time, is when techs’ hands-on experience becomes invaluable.

“We let [customers] know about these products when they call in and let them know when we go out there, but a lot of times, they don’t really do anything until the tech or salesperson goes out there and talks about it with them,” he said. “The techs are selling them. It’s getting very popular ... homeowners are loving it.”

Morgan sees a wide variety of customers interested in IoT.

“While most people might think this would be age-based, more often than not, that’s not the case,” he said. “Typically, we see the most interest from people who travel often, have multiple homes, and/or are busy professionals.”

Hunter agreed, saying that, surprisingly, there is a place for everyone in the smart-home market.

“The basic leak detection used with air conditioning and plumbing is something everyone should have,” he said. “The smart thermostats are actually really good for the elderly because their kids can access it remotely to help. I think we’ve learned not to pre-judge anyone, because it’s truly not just for the ‘tech-y’ buyer anymore. It has a place in almost everyone’s everyday life.”

Sometimes, that place just needs to be pointed out. In the U.S., 77 percent of people have smartphones and 89 percent of homes have Wi-Fi, per 2017 and 2018 reports by the Internet & Television Association and Pew Research Center, respectively, so it’s likely the groundwork for a smart thermostat or multiple smart-home systems already exists in customers’ homes. The same holds true if the customer has a smart speaker — although they might need to be clued in that the Echo in the living room can be more than just an entertaining gadget.

“I think a lot of it is just educating them on what all of it can do,” said Hunter. “Most of the time, they get the speaker out of the box and don’t have a lot of knowledge of what all it will do or how to get it connected. So it ends up being a radio and something you ask an occasional question to. Education is the key.”

In his experience, Morgan said the top selling points are ease, security, comfort, and the “cool” factor. For him, every conversation starts by asking the homeowner if they know about the capabilities of their current in-home technology and whether it’s something that would provide a solution for them and their lifestyle.

“I often tell people how I personally use the technology at home and see if the gears start turning,” he said.

SECURITY QUESTIONS

According to Minnick, once people decide to get smart-home technology, they’re committed.

“I don’t get many questions: maybe two or three in the 200 we have installed,” he said.

But when concerns do come up, they’re usually about internet security and whether the system could be hacked.

Minnick addresses those questions upfront — ideally, before a customer even speaks with one of his employees.

“[ComfortGuard] had an FAQ on their website, so we put it on our website as well,” he said.

In addition to the graphic, he researched some other questions that came up a lot and added them, too.

Blake Edwards, senior product marketing manager, controls, Lennox, said he’s heard the concerns over hacking, as well as concerns over surveillance from IoT device manufacturers.

“I kind of laugh when I hear that,” he said. “One of the things our dealers run into is … we a have remote monitoring platform. It’s the ‘Big Brother’ effect. A lot of times, these same people worried about this are carrying smartphones in their pocket; they have a smart TV, have all sorts of other things, but they don’t make the same connections for those devices.”

Yotam Gutman is vice president of marketing at SecuriThings, which provides real-time security for cloud-connected IoT devices.

“One of the greatest barriers to IoT adoption is the manner of privacy and security,” he said. “People are afraid, and rightly so, that when they connect devices to the web, without proper security, who knows who’s looking (for example) at video footage and seeing when they leave their apartment.”

Plus, devices that are not sufficiently secured and get infected by malware can quickly infect other devices, he said.

“Then they consume more power and bandwidth, and you as a consumer could be liable for damages due to cyber attacks leveraging these ‘zombie’ devices: for example, denial of service attacks,” Gutman added.

One security measure contractors can recommend to homeowners is using reputable IoT devices.

“It’s easy to buy some cheap knockoff from another part of the world, but that makes the installation more vulnerable,” Gutman said. “The ecosystem is quite complex, and in many of the places we’ve deployed [to fix an issue], it could have been avoided.”

Another is to purchase a security system to protect their smart home investment.

“When integrators or contractors look at a new project they deliver, obviously it’s quite a lift to sell,” he said. “So they should do that with security in mind.”

SecuriThings’ security mechanism monitors what’s taking place on the devices, similar to how an anti-virus system montiors the activity on a computer.

“Some people think third-party software like SecuriThings can create a weak spot,” he said. “We don’t even look at the video stream — we just look at the metadata. We are able to show our end customers, through their service provider, the schedules of their device. We can show them ‘your system was scammed but now it’s secure,’ kind of like the popup that says ‘105 new viruses and we contained them.’”

And, if malicious activity is discovered — if a device is hacked or infected, or if someone fraudulently obtains the credentials — the software can notify the homeowner, via the service provider, the moment it happens, so he or she can disconnect that device and neutralize the threat.

As IoT devices become more prevalent and complex, Gutman anticipates a corresponding rise in demand for security systems.

“We think that even a simple device will get smart enough to the point where they will require security,” he said.

And that security, in the long run, will probably fall squarely on the IoT service provider.

“It’s psychological: people are not willing to pay for security when they expect the systems they pay for to be secured,” Gutman said. “We think the cost will have to be borne by the service provider, then trickle down to the end consumer.”

Publication date: 7/30/2018

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