Connected Home
Jun 9, 2020

Report: Smart Home Incentives Appear Effective in Luring New Customers

Introduction

For service providers planning to launch a new smart home solution, one of the biggest challenges can be figuring out how to acquire—and retain—new customers. To demystify this process, we surveyed current smart home owners on what would incentivize them to try a new home internet, mobile phone, home insurance, or energy management service.

Read the report below to find out what our survey results revealed, and be sure to read our tips for designing your home smart home incentive program.

Table of Contents
  1. Surveying Today’s Smart Home Users
  2. What Did Our Survey Find?
  3. Next Steps: Design Your Own Smart Home Incentive Program
  4. Examples: Putting An Incentive Program Into Action

Surveying Today’s Smart Home Users

For this report, we surveyed 257 current smart home owners. All are either users of the Yonomi App, or are otherwise users of subscribers of the Yonomi smart home newsletter.

By surveying existing smart home users, rather than the population at large, we were able to provide insights into how “early adopters” think. These are the consumers that have shown the greatest interest in smart home technology to date, and would be the first audience to target when launching a new smart home service.

What Did Our Survey Find?

From the results of our smart home user survey, we discovered four primary lessons for service providers looking to acquire and retain new customers.

Lesson 1: Comfort and Convenience Drive Early Smart Home Adoption

In polling current smart home users about which devices they currently own, the responses show that early smart home adoption seems to be driven largely by comfort and convenience — as well as lower cost devices.

85% of respondents said they currently own a smart switch, while 82% said they own at least one smart bulb. This is consistent with the dominance of brands like Philips Hue, LIFX, TP-Link, Lutron, and Insteon in the current smart home market.

Smart speakers, largely subsidized by Amazon, Google, Apple, and Sonos, are the third-most common category at 77%.

These leading categories signal that small increases in comfort and convenience, like automated lighting and on-demand news, are the primary entry points to the smart home — especially if they’re low-cost and easy to install.

Lesson 2: Safety, Security, and Energy Management Present Large Unmet Opportunities for Service Providers

When the questions shifted to which devices smart home users don’t currently own, but would like to, the answers were a bit more surprising.

The most common response was smart leak detectors/shut-off valves at 44%, followed by smart CO/smoke detectors at 38%, smart cameras at 35%, and smart thermostats at 25%. While comfort and convenience drive early adoption among smart home users, safety, security, and energy management represent long-term aspirations.

For service providers looking to provide offers and incentives to new customers, these trends are important to understand. Just because smart shut-off valves don’t have wide adoption today doesn’t mean that consumers aren’t eyeing them.

Service providers offering discounted installation or long-term rebates may be just the push that single-family and multi-family customers need to adopt these cost-saving smart home technologies.

Lesson 3: Renting or Leasing Smart Home Hardware Not Attractive to Today’s Consumer

When exploring strategies for incentivizing customers to adopt cost-saving smart home technologies, service providers are likely to land on the possibility of renting or leasing expensive hardware. After all, this has been a successful strategy in the past for hardware like WiFi routers, security systems, and set-top boxes.

Surprisingly, our survey results revealed strong pushback on the idea of renting or leasing smart home hardware from service providers. Unlike WiFi routers and set-top boxes, consumers want to own their smart home devices outright.

Like smartphones, the large amount of private data processed by smart home devices means most consumers prefer to buy new hardware and then control who they grant access to. Also, as we’ve seen with smartphones, consumers view the devices as extensions of themselves — or their homes — and want to curate brands that match their lifestyle. One-size-fits all doesn’t work with the smart home like it did with set-top-boxes.

Lesson 4: Smart Home Discounts and Incentives Are Powerful Tools for Customer Acquisition and Retention

While renting or leasing hardware from a service provider doesn’t seem to be attractive to consumers, discounts on new hardware or incentives for using smart home hardware appear overwhelmingly popular.

67% of respondents said they would switch service providers if they offered discounted or free smart home devices. Even more striking — 76% of consumers said they would switch service providers if offered monthly rebates for smart home usage.

Whether you’re an energy management company, insurance provider, PropTech vendor, internet service provider, or multi-service operator, these types of consumer signals are incredibly promising for planning and launching a new smart home service.

Next Steps: Design Your Own Smart Home Incentive Program

Ready to get started on your own smart home incentive program? Follow the steps below to incorporate the lessons from our smart home user survey and begin effectively acquiring and retaining new customers for your service.

Step 1: Target Early Adopters

Buyers of “entry point” devices like smart switches, smart bulbs, and smart speakers are more likely to be incentivized to sign up for new smart home services. Partner with device manufacturers or makers of home automation apps — like the Yonomi App — to create targeted messages for these users.

Step 2: Make it Easy to BYOD

Unlike the WiFi routers and set-top boxes of the past, smart home owners don’t want to rent generic hunks of plastic. They want to mix-and-match smart home brands that fit their lifestyle, and they want to own the devices outright. Make sure your smart home service supports a wide range of devices, and that it’s easy for users to authorize API access securely and reliably.

Step 3: Offer Incentives Tied to Smart Home Usage

Smart home owners are often driven by the same motivations as service providers. They will actively seek out devices that protect their homes from water damage, theft, and sky-high energy bills, but they also want to share in the cost savings. Similar to today’s safe driving apps, design services to automatically sync active smart home devices and reward customers based on real-time telematics data.

Step 4: Create Actionable Insights Around Safety, Security, and Energy Management

All smart home owners know the joys of having the lights turn on automatically, or asking a smart assistant for a news update, but their long-term interests in smart home lie in safety, security, and energy management. In order to acquire and retain new customers, you must design your incentive program around at least one of these pillars.

Examples: Putting An Incentive Program Into Action

Below are examples of how these lessons can be put into practice by three different types of service providers.

Property Insurance

Property insurers should offer customers discounted installation of shut-off valves like Flo by Moen. Then, customers can download the insurer’s smart home monitoring app to receive monthly rebates based on up-to-the-minute leak detection.

Energy Management

Utilities and energy management companies should advertise discounts on energy monitors like Sense. Then, customers can download an app that sends real-time offers to incentivize energy-saving behaviors — like switching off energy-draining appliances. Or, the app can automatically adjust customers’ smart thermostats in exchange for monthly rebates.

Multi-family Dwelling Units

PropTech vendors should incentivize real estate developers or property managers by subsidizing the up-front cost of installing smart shut-off valves, then charge for a service that cuts off water to units where a leak is detected. Or, they can subsidize smart energy monitors and thermostats and charge for a service that reduces energy costs in vacant units.

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