Why Vivint / Best Buy Failed

By IPVM Team, Published Aug 31, 2018, 08:19am EDT

DIY has bested Vivint.

In 2017, Best Buy and Vivint partnered with Vivint employees on the floor of 400+ Best Buy stores, helping customers with smart home questions and selling them smart home packages.

However, a little more than a year later, the partnership was over.

In this note, based on experience from a former Vivint employee working at Best Buy, we examine:

  • Why this partnership looked good theoretically
  • What the reality was
  • How DIY competition bested Vivint
  • What the future possibly holds

Why *** *********** ****** **** ** *****

***** **** **** *** stores **** ** ******'* home *********, ** **** Buy ********* ******** ** the ***** ********** *** Vivint **** **** **** saw **. ****** ******* it ***** *** **** exposure ** ***** ** so **** ** **** Buy's *********:

**********, ********* ** * Best *** ***** ***** be ***** ** *** and ******* ** *** for *** ***** ********** on ************.

*** *** ****, **** Buy ******* **** ***** get * ***, ****-*-**** smart **** ******** **** built-in ********** ***, * recurring ******* **** **** Buy *** ** ********** in ****** ******.

Reality - ******* *** ***

********* ********* ** *** go ** **** *** looking *** ********* ********. Best *** ********* **** to *** *** ****-*******, not ** *** $*** for ***-********** ************ ************. Because *** ******* **** Buy ******** *** **** inclined ** *** *********, the ***** **** ******** not ** ****** ** either **** *** ** Vivint *********. ** **** sales, ****** ******* ******** a ***-********* ***** **** option ** **** **** as * **** *** exclusive. *******, *** ********** obviously *** *** ******.

SimpliSafe *** **** **** **** *** *****

***** *** ********* ********* such ** ********** *** Nest ****** ********* ** Best *** **** *** significantly **** *********. *** most ***** ****** ****** typically ***** ** ***** $600, ****** $*** *** SimpliSafe.

Low ***** *********** ******* ** ******'* **** ******

******* ****** **** *********** in *** ***** **** markets ** **** *** Texas, ******'* **** *********** was ***** *** *** in **** ******* ***** they ** *** ** much ***** *********. **** customers **** ***** ** Nest ******* ** *** company's ***********, *** **** of ********* **** ***** SimpliSafe **** ** *** Radio *** *************** **** ****** **** Dave ******.

Competing ******* ****** ****-**-****

****, **** *** *** to ******* ******* ******'* other, *********** ******** **** dealers, ******, *** ***** door-to-door ****. ***** ***** channels **** **** ** roll ********* ***** **** the ********* ******* ***, so *** ******** *** less ** *** ** front. **** *** *** possible **** *** ******* sold ** **** ***; equipment *** ******* *** had ** ** **** prior ** *******. ***********, this *** ****** *** customers ** ******. **-***** Vivint **** **** ******* to *** ******** ******* in *** ******, ***** door-to-door **** *** *** advantage ** ****** * larger **** ** *********.

************, ******'* **** *** high, ****** ** *** salaried ******** *** ****** reps, ****** *** ******** commission ** *** ****-**-**** teams. ********, **** *** also ******** * *********** cut ** *** ***.

What *** ****** *****

************ ** ***** ** earnings ************* **** ******* ***** are ***** ***** ************* for ***** ***** **** products ** *** ****** channel.

*** *** ****, **** Buy, ************* ** ******** *********, ** *******-******* ********* healthcare *******, ** ****** away **** **** ******* products ** ********* ********.

Skeptical ***** ****** ** *** *** ******

** ****** ********* ***** Vivint ********** ** *** box *********. ***** *** company ** * ***** leader ** ******* **** to ****, ** * retail *******, ********* * few **** **** **** much **** ***** **** offerings **** *** ***** 'good ******' *** *** average **-***** *********, ****** has ***** ********** **********.

Comments (11)

Best Buy customers want to DIY and self-install, not to pay $199 for non-refundable professional installation.

Not sure I agree with this, Best Buy has done pretty good with their Geek Squad unit, doing installation of home theater equipment, PCs, etc. I think a lot of Best Buy customers like the cash-n-carry model, but a good portion of them are willing to pay to have their equipment installed.

I think a big challenge for Vivint is just how crowded the smart home market has become, and how many brands there are competing for attention. Also, I think the polo-uniformed in-store reps can make customers a bit suspicious that the product is really a fair deal. (eg: the Tesla solar panel guys in Home Depot, the Vivint people at Best Buy, etc). It often can feel like over-marketing.

Interesting Article. Im not sure BB customers would decline an installation service, but I do believe that they would be very cost concious about it. IMO, the $199 installation cost is a fairly easy pill to swallow, but I think the main killer is the monthly costs. Hate to be a price guy but this is just one of those industries in which customers are tired of paying ridiculous monthly costs and the simplisafes of the world are taking advantage of the oppurtunity. 

A friend of mine let me into the Vivint installer group on Facebook. There are code violations in nearly every install that's posted. It's bad. I am surprised Vivint is as big as they are with such crappy installation work. They should not be able to call it professional installation. I always knew it was bad. But until I got in that group I had no idea how bad it was. 

This is a very sales and marketed driven organization which is why I think they are big.  Probably one of the best sales driven companies out there. Their tactics are questionable but they excel at door to door sales. I can see why the BB sales process didnt work, I can only imagine its not as high pressure. 

As far as after installation satisfaction, results are mixed.

I agree with you on that. Too often security companies are focused on service and not sales. This is why they don't grow. We are moving our company to being centered around sales and our sales have grown dramatically and our organization is stronger. There's a lot to learn from Vivint. That's why I am in their group. As bad as their installs are. They know things we don't. 

I'll start by saying I am a bit of a graybeard here - and, in fact, I have a gray beard.  There's an adage about the Residential security space - Resi intrusion is sold, not bought.  That being said, the various providers in the space sell a lot of intrusion.  But few potential customers wake up in the morning and say "I am going to Best Buy to get a security system!"  Instead, they encounter a sales person - either a well-dressed & very polite door-to-door salesperson, or the affable person at the home & garden show, or they see one of the kazillion ADT or Simplisafe commercials, which include a call to action. 

The industry has learned the habits of its market, and so if someone moves into a new neighborhood, flyers from various local providers show up in their mailboxes.

Selling in big-box is problematic for these reasons, except for the likes of Nest or SS who have laid a lot of the groundwork in their media spend.  It's hard to go from a chance encounter at the store to a signed monitoring contract, since the customer's predisposition to buy is pretty random (or instead, it's pretty random that a customer with a predisposition to buy just happens to walk into the store.)  Customers like that exist, (e.g. someone who just moved into town or just had a baby), but those customers would already have been inundated with offers from local guys.   So - I am not surprised the venture didn't work out as expected, and I'd also not be surprised if the collective They keep trying until something works.

Another thing:  DIY is an installation method, not a business model, and lots of folks confuse those.  For me, the business model is not about who installed it but about "who made the phone ring?"  SS is, in that way, a traditional security provider:  they spend the bulk of their money getting the phone to ring just like everyone else.    The fact that the installer is the homeowner is just a detail.

 

I also feel the smart home market may have sailed using the security system as the “controller”.

 

To me many consumers and particularly BB consumers would rather have their “smart” devices controlled by Alexa, Google home, etc.

 

What alarm system can't be controlled by Alexa and Google Home? Every system we offer can be. Using the security system as the controller turns your "smart home" into a more secure home. Home automation isn't about convenience. It's about increasing the security of your home. This is the approach we take.

I think you are missing my point. I think controlling the alarm system from Alexa and Google Home is the way the industry will go. Most security companies are still trying to sell based on the smart home system meaning having all the zwave connected directly to the security system as the controller and using the security company app to turn the devices on and off. This article states Vivint was touting the BB system as a "smart home" system not a security system.

 

My point is if I was even a remotely technically savvy consumer I would want my lights, locks, thermostats, etc. controlled by Alexa/Google Home/etc. directly and not through the security system interface.

 

We saw the home automation piece as something that would make the customer "stickier" and providing features they would want to use regularly even if they didn't arm and disarm all the time. I think that time may be coming to a close because it limits the customer's ability to use these devices in conjunction with their music and other features available today. The devices are also generally easy enough to install that many handy customers can figure out how to pair a zwave device to the controller and get it up and running on their own.

This model failed before it got started.  Vivint's model is high pressure in the home, get it done right now so the customer can't back out.  After the Vivint group leaves the house the customer's buyers remorse sets in.  That is why they have so many BBB complaints against them.  That along with no service after the sale.  We noticed Vivint having far less success in our market this year and I think the DIY and Simply Safe exposure has made customers for educated and aware.  Maybe not such a bad thing for us full service dealers.

 

Ron Pullen

Alarm.com (and less so, Honeywell) integrate with Alexa and Google.  If this is the case, and Alarm.com has 5,000-6,000 dealers, then why would an end user in two years NOT opt for the Alexa/Google interface, even in a home that has been installed by a dealer that knows something about new technology.  Alarm.com, Honeywell, and several leading central stations are spending A LOT of money on educating their their better dealers  (and at least something on their lesser dealers) to handle technology preferences of end users who have a lot of zones and signals and do want/need a professionally monitored premises. It would seem to me that if your platform provider cannot integrate with the end users' preference you will be in trouble, except for those who prefer -- or need -- a panel that can handle many zones and many different types of sensors at once. The risk is that Amazon ditches this "co-opetition" in a few years, figures out how Alexa can handle a 20 or 30 zone home with 20 different types of sensor inputs, and ceases to allow outside technology platforms to use them.  Seeing that Amazon wants to control the home ahead of Google or Apple, they may well stick with these current integrations for a while.

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