Top Integrators Launch HAUS, a Franchise-Like Program for Mainstream Home … – CEPro
Three founders of Xssentials, a high-end integration firm based in Denver, plan to attack the broader market for security and home automation â€¦ and bring the rest of the industry with â€˜em. The home-technology veteransâ€”David Daniels, Mike Thul and John Carlenâ€”have launched HAUS (Home Automation University), a school and support program for high-quality, high-volume installations.
HAUS is not a franchise organization, but it has many elements of a franchise, including intensive training on both technical and business subjects, back-end software for operations, sales and marketing services, dealer (â€œfranchiseeâ€) collaboration, membership fees and metricsâ€”lots and lots of bench-marking metrics based on member performance.
Nor is HAUS a buying group, but the company will standardize on a core group of vendors, most likely anchored by Savant for home automation and Sonos for multiroom audio.
The investment in the new program is substantial, with a 25,000 square-foot campus in Denver to house training and other services, plus an army of instructors and support staff (25 of them at launch) to help dealer members thrive in the mid-market.
The new venture is completely separate from Xssentials, according to Daniels, who is CEO of both entities but now working full-time at HAUS, along with his partners.
â€œWe have been 100-percent focused on HAUS for two years now,â€ he says, adding that area presidents have been appointed to the run the day-to-day business of Xssentials, which has Colorado offices in Denver, Aspen, Vail and Glenwood Springs, as well as a presence in Jackson Hole, Wy.
Ebode, a Proof-of-Concept Business
It all started two years ago, when Xssentials launched a new business, Ebode, for the mainstream home automation market. Xssentials CEO Daniels outlined the plan in 2014, urging other integrators to conquer the broad market.
â€œItâ€™s not going to be easy but there can be damn big rewards if you decide to play,â€ he said. â€œIf you tiptoe in, youâ€™re probably going to fail.â€
Unlike Xssentialsâ€™ ultra-custom business, the new company would take a limited portfolio of products (initially Savant, Sonos, Lutron, Honeywell and Ubiquiti) and create a repeatable process for sales, installation, service and recurring revenue.
Xssentials realized that, to grow its mid-market business, Ebode would require a separate organization built for volume, which would take a different mentality, different skillsets and all new processes.
â€œIf we wanted to be an exceptional customer service company, we would need to train a whole new organization,â€ says Daniels. â€œBut there was no training for that.â€
The semi-custom, or â€œless-customâ€ business model has largely eluded the â€œcustomâ€ electronics industry, in which one-off installations are the norm, and 100 projects per year is â€œhigh-volume.â€
If Ebode wanted to play in a mainstream smart-home industry, it would have to help create that industry.
â€œWhy start a new industry with no training, no resources, no business processes?â€ Daniels and team wondered. â€œIt doesnâ€™t make sense as an industry.â€
So HAUS was born.
What is HAUS?
HAUS is a membership program â€“ not unlike a franchise modelâ€”in which dealers pay to get trained online and in HAUSâ€™s Denver facility, and then receive ongoing support from HAUSâ€™s sales, marketing, technical and operations specialists.
The education component of HAUS is serious business. The company hired Shuli Steele, a former account manager from Pearson adult education, to run the educational program. Trainers generally come from the ranks of teachers rather than â€œindustry experts.â€
The company has spent the last two years â€œputting together an effective curriculum,â€ says Daniels, â€œwith real trainers that do nothing but adult education.â€
The schooling is â€œall collaborative, hands-on learning, with playbooks that are experiential,â€ Daniels explains. â€œThere are real deliverables you can take home and execute.â€
While education for custom integrators is fairly abundant through trade shows, conferences, manufacturer training and industry organizations like CEDIA, â€œitâ€™s hard to come away with real executables,â€ Daniels says.
The takeaways from HAUS are both immediate and ongoing.
As part of the program, members have open access to Ebode, with license to drill down into the proof-of-concept business.
â€œItâ€™s a very transparent, open business,â€ Daniels says. â€œYou can come in and talk to operations, accounting, sales â€¦.â€
Training for the first round of HAUS dealer members begins Q1 2016 in Denver.
While Daniels hasnâ€™t specified the price for the program, he says it is comparable to those of a CE industry buying group. Typically these groups charge about $1,000 to $6,000 per year for membership, with additional fees for materials and special services.
A list of HAUS services and benefits is below.
Savant and the Role of Vendors in the HAUS Program
Daniels emphasizes that HAUS is not about specific products per se, but the program will revolve around a â€œnarrow sandboxâ€ of â€œfive to 10 core manufacturers.â€
Savant will figure largely in the program, with the $499 Savant Remote as the home automation centerpiece â€“ or so it appears. Daniels so far wonâ€™t confirm specific vendor partners pending final agreements, but HAUS was announced in October during a Savant road show in Denver, and the HAUS Website clearly shows Savant as the core partner in the new venture.
Daniels also has not confirmed that Ebodeâ€™s other vendor partners â€“ Lutron, Honeywell, Ubiquiti and Sonos â€“ will be part of HAUS; however, Daniels did promote HAUS in October at Honeywell Connect, a conference for Honeywellâ€™s top security dealers. Furthermore, Sonos is shown in the HAUS promotional video (below), and because of the tight relationship between Savant and Sonos (both partially owned by KKR), we can expect Sonos to be part of the program.
Besides, it would make sense to model the HAUS program on products and services offered by the proof-of-concept business, Ebode.
VIDEO: Introducing HAUS, the home automation university
Why products and manufacturers matter so much to HAUS and its members â€“ beyond the financial and other support that each vendor brings â€“ is that a standard product line helps to streamline technical training and business-related support.
After all, there will be hands-on technical training on a select group of products; marketing materials will include images of those products; tech-support will know those products and any integration quirks; and the entire network of dealers and HAUS representatives will be able to talk the same product language.
Most importantly, key performance indicators (KPI) will be gleaned from sales, installation, revenues and other metrics based on businesses that install similar products.
â€œThe way to be successful, to offer a great customer experience, is to work in a narrow sandbox where you can wash, rinse, repeat and raise the bar on customer satisfaction,â€ Daniels says. â€œI think if you stay focused, you can learn to perfect the process.â€
Even though the product portfolio will figure largely in the HAUS model, Daniels says the group does not require members to patronize any given vendor, and HAUS itself does not sell products.
â€œGetting a dealer certified on a brand is between them and the vendors,â€ Daniels says. â€œWe donâ€™t do discounts or negotiate pricing. This is not a buying group.â€
Kind of Like a Franchise, but Not
In many ways, HAUS is like a franchise organization, providing the fundamental training and ongoing support typically provided by franchisors. Like HAUS, most franchisors profit from these services.
But most franchisors also profit from selling proprietary products/supplies to franchisees. In the case of Subway, for example, that might be tables, chairs, cash registers, ovens, bread-making ingredients, bags of lettuce and slices of American cheese.
HAUS might sell literature, Websites and signage but at this time the organization is not selling system â€œingredients.â€
Likewise, HAUS wonâ€™t be collecting royalties from members â€“ a source of income for most franchise organizations.
One of the main benefits offered by franchisors is benchmarking. With participants all using the same or similar products and systems (e.g., ERP and CRM), the franchisor can establish and share key metrics with all members. Such benchmarking will be a hallmark of HAUS.
For example, based on the aggregate data from all HAUS members, integrators should know how long it takes to install a four-zone system, and how much profit they should make. They might compare their prices with other HAUS members to determine if theyâ€™re too high or too low, given the average income in the target market.
And, hereâ€™s the key: They should be able to use the KPIs of other member companies to establish with some degree of certainty the ROI of any given investment in a HAUS-driven business.
Imagine how much easier it would be to receive financing or to sell your business if ROI becomes predictable.
It might seem the next logical move for HAUS would be to propagate its brand nationwide, creating hundreds or thousands of related businesses that could be merged or sold fairly easily â€“ a foreign concept to the traditional custom-electronics industry. But thatâ€™s not exactly the plan.
Daniels stops short of suggesting that HAUS is a vehicle for a national dealer roll-up. Even so, he and his colleagues do want a â€œHAUS-certifiedâ€ business to mean something.
â€œOver time,â€ he says, â€œwe want the HAUS brand to be something that consumers equate to quality.â€
RMR and The Market for HAUS
For all the momentum in mainstream home automation, few home-technology integrators have made a real business of it.
Most of the success stories come from the security industry, where integrated alarm systems, surveillance cameras, lighting and thermostat controls, automated door locks and other smart devices are sold and installed by the hundreds of thousands every year. Individual security dealers often log thousands or tens of thousands of installs per year.
But they donâ€™t include entertainment (audio and video) in their mass-market offerings.
In the home-technology integration sector, many dealers offer affordable automation and A/V systems, but not in large volumes. Relatively few integrators install more than 1,000 systems per year, and typically those volumes come from deals with new-home builders.
Also evading the traditional home-technology channel is recurring monthly revenue (RMR), which not only feeds an installation business with cash flow, but also ups the valuation of the business.
Integrators donâ€™t â€œdoâ€ RMR because 1) they donâ€™t do monitored security systems, the most common category for RMR and 2) they donâ€™t have enough clients to make RMR really matter.
HAUS addresses those challenges head-on, with security training (HAUS co-founder Mike Thul started out in the security business with Thul Alarm), as well as the overarching principle of scalable, high-volume installations in the broad market.
â€œEbode has many security accounts today and growing fast,â€ Daniels says. â€œSecurity will be a major part of the programâ€”lots and lots and lots of security.â€
HAUS intends to go further with RMR opportunities, however. For example, Ebode promotes â€œreliable managed networks starting at $29.95 per month,â€ and the operation is testing other potential offerings.
â€œRMR is one of the cornerstones of success,â€ says Daniels, â€œand we are raising the bar.â€
With this novel approach to the home-tech business, HAUS should have a bountiful market of prospectsâ€”not just from the security and home technology channels, but also from the entrepreneurial ranks, given the end-to-end support available.
Free Webinar, Dec. 16, 2015, presented by CE Proâ€™s Julie Jacobson
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(from HAUS Website)
Exclusive Product & Software Access
- Become a Savant Authorized Dealer
- HAUS service provider solutions
- HAUS business systems access
- Savant in house app â€“ auto discovery component
- HAUS custom â€œ30â€ minute Quote to Closeâ€ sales system licenses
- HAUSlync learning systems and content management software licenses
- Additional HAUSlync licenses
- Learning Management Systems licenses included
- Modern home automation specialist website templates
- Integrated CRM/Sales/Service Software suite 2016
- Business Growth & Optimization Plans
- Process maps, systems and analytics for growth
- Quarterly KPI metrics for performance benchmarking
- Small group 2 and 3 day labs in all disciplines (Sales, Marketing, Leadership, Operations)
- Advanced 2 day training session on Creating a Self-Sustaining Business
- The KPI Club: market analysis, business performance analysis, operations efficiency
- Marketing, Sales & Operations Playbooks
- Lead generation from HAUS participating manufacturers
- Customer & employee satisfaction survey templates
- Marketing roadmap and process guide
- Marketing playbook, with annual updates
- Customizable marketing collateral
- Modern home automation website templates
- Personalized brand identity and positioning guidelines
- Re-targeting and re-marketing campaigns
- Pre-built advertising campaigns
- Showroom Design assistant
- Marketing lab with advanced marketing skills development
- inHAUS Marketing â€“ your advanced outsourced marketing team
- inHAUS online marketing campaign management
- Sales roadmap & process guide
- Integrated products and services solutions
- Sales playbook with annual update
- Complete customer profiles
- Product/service suite pre-built
- Customer experience development & methods
- Quosal the â€œquote-to-closeâ€ discovery and proposal software tools
- Sales Lab â€“ advanced sales training
- Competitive analysis and advantage toolset
- Installation efficiency metrics
- White glove service solutions
- HR guidelines
- Employlee DISC profile training
- Employee Recruiting, Training & Onboarding
- HAUS turnkey technician and onboarding system
- HAUS turnkey sales person training and onboarding system
- HAUS turnkey marketing person and onboarding system
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