Re-Visioning: Disruptive Innovation Will Transform Home Integration
In previous columns, we explored ways that disruptive innovations in technology have combined with the Great Recession to markedly alter consumers’ understanding of home integration features, and to create unrealistic price expectations. We also looked at the potential impact of Comcast, Verizon, and other electronic service providers (ESPs) invading our competitive space with their recurring revenue model for basic home automation services.
More recently, I argued that we can compete successfully with the ESPs and Internet resellers only if we develop simple and effective ways to let consumers know exactly what we do, so they can understand and appreciate that the value we add goes way beyond the offerings of these competitors. I also gored a sacred cow by suggesting that to survive Internet competition, we might want to match legitimate Internet pricing (from the most reputable sites selling only A-stock, non-grey market goods), then itemize and charge for all the services we provide (instead of trying to bake them into retail prices with their disappearing margins).
Now, let’s look at things from the consumer’s perspective—something we rarely do in our industry. Why? Because the better we understand their position, and put ourselves in their shoes, the more effectively we can tell our story, serve them effectively, and prosper.
Urgently Needed: A Consumer-Centric Perspective
Let’s face it: Although the home electronics industry had morphed into a service-based “integration” model, it continues to present itself to the public in a fully product-centric way. Manufacturers continue to rely on demographically-based command and control marketing practices to highlight specific models and to create product demand. We need to focus more on helping consumers understand the products, as well as the integration process that’s needed to deliver the full benefits to them. We also must identify more precisely the problems consumers want and need help solving.
Yet manufacturers continue to promote widgets, while we integrators are striving to understand clients and provide solutions. Too often, industry attitudes range from condescending (“Consumers don’t know what they want—we’ll tell them.”) to arrogant (“Just give me some sexy new features to sell, and let me do my magic.”) Because of this disconnect, customers have become more and more confused, and fearful. One sign: They use on average only about 20 percent of the features available to them in the products they buy. As a result of the confusion, they lose, we lose, and the manufacturers miss out on new opportunities.
The Internet is helping to change this, although often in chaotic ways. Today, brands and individual products are being defined not by manufacturer advertising, but by their online reputations—in review sites, social media trends, blogs and forums. Internet-savvy consumers are using these sites to tell anyone who will listen what jobs they want to accomplish electronically, and how well existing solutions meet their needs. This “advertising copy” is written by consumers, not professional copywriters. And it’s focused on solutions to consumer needs, not creating buzz for un-needed features, luxury goods or conspicuous consumption.
Consumers, it seems, know their own minds better than we give them credit for. It’s time for us to understand them: their fears and (evolving) motivations, their areas of ignorance, and their preferences. If we don’t do this now, new disruptive innovations will leave home integration specialists in the dust bin of tech history. Better get started.