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Losing Ground to Custom Installers

Apr 1, 2007 12:00 PM

Type of Installation Contractor Used for Home Technologies

Type of contractor	2002	2003	2004	2005	2006
Security installer	73%	56%	57%	54%	65%
Electrical contractor	76%	76%	65%	67%	63%
System integrator/custom installer	35%	35%	34%	51%	62%
Utility company	12%	19%	8%	15%	22%
Major retailer	4%	8%	1%	7%	17%
In-house labor	2%	7%	4%	4%	10%
Other	1%	1%	3%	3%	3%
Source: CEA

Builders and contractors are working with custom technology installers as often as they employ security and electrical contractors, say the findings of a survey by Arlington, Va.-based Consumer Electronics Association (CEA). According to CEA's “Fifth Annual State of the Builder's Study,” which surveyed an online panel of U.S. homebuilders drawn from the National Association of Home Builders Research Center (NAHBRC), Upper Marlboro, Md., more than 60% of builders and contractors employed custom technology installers in 2006. In fact, custom technology installation may quickly become what has been referred to as the “fourth trade” in the industry.

The study says more builders are offering more technologies in homes, but only certain offerings are steadily increasing in popularity. Structured wiring, monitored security, and multi-room audio have hit a plateau, whereas home theater, automated lighting controls, home automation, and energy management have spiked. Homebuilders rely solely on installation contractors to market and sell these home technologies to new buyers, which may be the catalyst for this trend. In addition, custom installers' marketing savvy could also be why, for the second year in a row, custom installers received a higher satisfaction rating from builders — 89% — than any other type of contractor.

The study also reveals that working with custom installers could actually be raising the price of home technology installation for homebuilders, who cite price as the most important factor for selecting a subcontractor. Other factors include a firm's reputation, experience working with builders, completeness of offerings, and simplicity of offering — which are all areas in which electrical contractors should strive to beat out their custom installer competition.

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© 2012 Penton Business Media, Inc.

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