Case Study: A Profitable Builder-Integrator Partnership

Case Study: A Profitable Builder-Integrator Partnership

Photos courtesy of Audio Buys.

How can large-scale homebuilders effectively offer home technology upgrades from security systems to home theaters and whole-house audio systems—without becoming experts on those technologies?

“If you were getting ready to invest the most amount of money you were ever going to invest in anything, would you build a house that is inadequate from the time you move in?”

Take a page or two from the relationship between homebuilding giant Toll Brothers and Gainesville, Va.-based technology integration firm Audio Buys, which outfits all of Toll Brothers’ Virginia communities and about 70 percent of the homebuilder’s Maryland new homes.

Audio Buys has online technology catalogs for each of Toll Brothers’ communities it services, showing homeowners a range packages available for home security and surveillance, entertainment systems, lighting, home control and more.

Audio Buys will install wiring or systems in about 400 Toll Brothers homes this year, and the company will add 300 through a new deal with another homebuilding partner.

The High-tech Design Center

Audio Buys even has it’s own “design center,” which is its own multiroom showroom in Gainesville, where Toll Brothers’ homebuyers venture after their purchase to experience and consider their home tech options.

“We’re taking all the responsibilities off them and their sales people,” says Brian Wittenberg of Audio Buys. “When you buy a house, we contact the homeowner and take over the process of dealing with all the low-voltage questions and requirements.”

The homebuyers select their flooring and countertops at one of Toll Brothers’ design centers, then venture to Gainesville for the technology options. It’s an arrangement that has worked out for the builder, the integrator and the homebuyers.

Most homebuyers opt for structured wiring and security packages, Wittenberg says. About 75 percent opt to add whole-house audio wiring with built-in speakers, while about 60 percent have media systems prewired and 40 percent have media systems prewired with in-ceiling speakers.

During this phase Audio Buys sells home tech packages at rates that include a modest mark-up for the homebuilder. About 20 percent of buyers opt for after-sale installations of home tech products, which Audio Buys installs and charges for independently.

Homebuyers need to make a lot of decisions in a very fast time frame, and Audio Buys views its showroom and design center walk-through as an educational experience—for both the homebuyers and Audio Buys. The homebuyers make electronics installation decisions on what makes sense.

Model homes also feature some of the available technology. “In models, we make sure the sales people know how the systems operate,” Wittenberg says. “We’re trying to get better at getting in front of [customers] in prewire process.

In its new partnership with another homebuilder, a display of home tech options will appear in the builder’s design centers, and Audio Buys plans to host some technology nights to show off systems in those design centers.

Virtual Sales

Audio Buys is getting its catalogs in a Salez Toolz platform that can be shown to clients via an iPad, which is also used to show how one can remotely operate the technology at several model homes. “We try to communicate to homeowners that the technology is right there in your hand,” Wittenberg says.

And Audio Buys is looking to set up a teleconferencing system so “we can be in the design center and they can be elsewhere,” he adds. “The more convenient we can make it for people, the better.”

“Now with tech being such a widespread, common thing in our personal devices, it’s part of peoples’ lives, and now every builder is looking at this category and finding how they can do it. … The whole next [phase] of construction is going to be technology, and it’s an incredible opportunity for builders and integrators in every market.”

Savvy Integrators Wanted

Audio Buys started working for Toll Brothers about 15 years ago when the builder wanted up-to-date wiring for its customers and contacted Elan Home Systems looking for integration firms. Audio Buys, which started as retail store for records and tapes, learned the building business, started installing security systems and has since branched out to offer other systems that are in demand. The firm is now 28 employees strong. “For us the business has grown over the years, because the things we are integrating have changed,” Wittenberg says.

But builders need to be and should be careful of who they deal with to install and service high-tech home systems. “Part of challenge in the production [building] world is not just doing quality work and meeting timetables, but understanding the [business] structures the builders have in place, and match the systems to do that.”

For example, Wittenberg says, “if paperwork is not processed to a T, you don’t get paid.” And many large homebuilders are moving toward automated payment systems.

Homebuilders may need to look for business-savvy electronics integration firms, but many builders need to get a bit more savvy on the tech side as well and get over thinking they can merely offer coaxial cable (RG-6) and telephone wire.

Wittenberg says Audio Buys won’t recommend wiring RG-6 to a location unless Category 5 high-speed Ethernet cabling is routed there as well.

“If you were getting ready to invest the most amount of money you were ever going to invest in anything, would you build a house that is inadequate from the time you move in?”

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