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Home Technology Disconnect Could Mean Lost Revenues

Like Builders, ESCs Specialize in Different Market Segments
By Keith Davis, Residential Technologies

Much like the variety of builders who build for different market segments, there is a wide range of electronic systems contractors (ESCs) who specialize in planning and installing home technology for particular market segments as well.

Builders who are considering working with ESCs to bring home technology to their product offerings should determine what type of technology professional fits best with the homes they are building.

The following lists ESCs by market segments ― and their specialties — in the home building industry today:

  • High-End ESC

    High-end ESCs work in the high-end custom home market where every home and project is a one-time creation based upon the customer’s needs, wants and desires.

    These ESCs typically design and install the entire gamut of home technology offerings — dedicated home theaters, full automation and control systems, extensive lighting control, HVAC and energy management systems, large-scale multi-room audio, structured wiring, in-depth security and home networking.

    Average price points to the home buyer can easily exceed and go well beyond $100,000, depending upon the scope of the project and the home buyer’s budget.

    If this is your marketplace, you must find and use a very well-respected and reputable ESC, or face a very unhappy customer.

  • Mid-Market ESC

    Mid-market ESCs generally work in the “move-up” and “luxury” new-home markets.

  • Custom Home ESC

    Very much like the high-end ESC, these ESCs generally have their builder’s permission to work one-on-one with the home buyer to create unique home systems.

    Unlike their high-end counterparts, however, the custom home ESC presents a more “packaged approach” to selling and installing home technology that can be easily modified within pre-defined limits to suit the individual buyer’s tastes and needs.

    These ESCs generally provide home theater and whole-house music systems, as well as security, structured wiring and home networking. They may also provide limited-scope automation and basic lighting controls, depending upon buyers’ needs and budgets.

    The average price points for this buyer can range from $25,000 to $75,000.

  • Semi-Custom Home ESCs

    This ESC provides home buyers with a limited set of choices for home technology in keeping with the builder’s business model of streamlined processes and restricted offerings.

    They offer and install a total “packaged approach” to sales and, as a rule, do not venture outside of their pre-designed realm of products and services.

    They typically install home theater and flat panel-based media rooms, multi-room audio, home networking and, at the higher end of this market, limited scope home automation.

    Security and structured wiring may be included, but more often than not these systems are installed by other builder-provided subcontractors.

    Home buyer price points for this market start in the $10,000 range and can go up to $25,000 or $30,000.

  • Production Home ESCs

    This ESC works with production builders who use the “packaged approach” to sales exclusively.

    Home buyers in this category typically devote less funds to home technology, so the focus of this ESC is to sell home technology packages and have the price of the system included in the mortgage for the home.

    These ESCs usually install media rooms using a flat panel TV and basic surround sound systems and multi-room audio using entry level electronics.

    This ESC generally does not install security systems. A security contractor does that. Likewise, if there is any structured wiring in the home, it is generally installed by an electrical contractor, not the ESC.

    The home technology price points for home buyers in this market generally range from $2,000 to $10,000, depending on the system installed and the price point of the home.

  • Electrical Contractors

    Some builders use electrical contractors to install structured wiring because they are generally lower in cost, fast and have an existing working relationship with the builder.

    More and more electrical contractors are looking at entering the consumer electronics space and offering home technology products and service to builders, yet they often lack the training, expertise and access to quality products in order to effectively do so.

    Typically, electrical contractors will install structured wiring and entry-level lighting controls for home buyers, but they usually do not have the capabilities to pursue more complex and costly systems.

    However, electrical contractors are a required sub in every home and represent a very viable and available segment of the ESC community.

    When trained correctly and given access to quality products, the electrical contractor could be a viable ESC in the production homes and mid-market segments.

  • Security Installers

    Security installers are beginning to offer and install a wider range of security-based home technology, as well as flat panel-based media rooms and multi-room audio to their builder’s customers.

    Like their electrical contractor counterparts, however, they need to be trained and taught new skills in order to successfully compete in this marketplace.

When interviewing potential ESCs, don’t be put off by the jargon and techno-speak. In fact, make sure the ESCs can discuss what they can and cannot do plainly, without jargon, and how they interface with production schedules and customers.

Keith Davis is president of Charlotte, N.C.-based Residential Technologies, Inc., an ESC with expertise in lighting control, renewable energy, specialty electrical systems and energy management and control. He is an NAHB member and a member of the Home Technology Alliance. For more information, e-mail Davis, call him at 704-944-3125 or visit www.rtinc.biz.

Information About Home Technology Available From HTA

The Home Technology Alliance (HTA) is a partnership between NAHB and the Custom Electronic Design Installation Association (CEDIA) that was formed to position the housing industry to effectively meet the growing home buyer demand for home technology and provide maximum return on investment in the new home building and remodeling process.

For more information, visit www.nahb.org/HTA.  

CEDIA: A Source for Experienced ESCs

The Custom Electronic Design Installation Association (CEDIA) is a founding sponsor in the Home Technology Alliance and an international trade association of companies that specialize in designing and installing electronic systems for the home.

CEDIA members are established and insured businesses with bona fide qualifications and experience in this field. CEDIA serves as a source for Electronic Systems Contractors (ESCs).

For more information on CEDIA, visit the association’s Web site at www.cedia.org. To find an ESC, click here.

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