Measuring AT&T's success in home security at the one-year mark

Last month, AT&T celebrated the one-year anniversary of the introduction of its Digital Life home security and automation offering in the marketplace. The company has certainly come a long way since it first announced plans to enter the security market nearly two years ago; having established two, CSAA Five Diamond certified monitoring centers to support Digital Life, which is now available to customers in 75 markets across the country.    

Kevin Petersen, president of AT&T Digital Life, said that they met their “wide-reaching” goals for 2013, which were really focused on building up their infrastructure and nationwide operations.

“We’re covering a good portion of the country in terms of households. We feel really good. We feel good about our marketing campaigns, our advertising, but then I would say that as important if not more is our ability to demonstrate and really talk to people about the service, the market and the industry in our retail stores,” said Petersen. “We’re in well over 1,000 stores at this point. I think the actual number is 1,400 stores, but that gives us the ability to demonstrate and really talk to people face-to-face in a natural setting for them and really get the word out, so I would tell you this: I feel like we accomplished our goals in terms of building the infrastructure of being a fully integrated, full provider of security and automation and doing it in a way that our customers are telling us is a good experience.”

Going forward in 2014 and beyond, Petersen said the company’s focus will be on ramping up their sales campaigns and working more closely with their call centers which will now be scheduling and selling Digital Life along with wireless and wireline services. In addition to launching in new markets, Petersen said that they will also be looking to continue to introduce new products and services.

“We will look to go into new industry verticals. If you think about living in place in the healthcare market, we think there is a very viable opportunity there,” explained Petersen. “We’re wholesaling our service internationally and we’re looking to get into the business segment. We have a strong foothold with our base business at AT&T in that segment. We didn’t get into this market to be anything but a number one or number two provider and that’s our goal and that’s what we’re driving towards. At the same time, we’re going to continue to look at these adjacent markets that we feel have a lot of synergy with what we’re doing today and what we do here at AT&T.”

Petersen also feels that the company’s marketing efforts, as well as their online presence has helped to educate consumers about the benefits and attainability of home security and automation. However, he added that another big component to their success thus far has been their retail outlets.

“If you think about it, it’s not just marketing, it’s not just advertising and it’s not just online… it’s also about how we sell, how we display and how we educate in our retail stores,” he said. “I think the combination of those things has done a lot in terms of opening peoples’ eyes on what new technology is bringing to this market, what new services are available and how it works – how easy it is to use and some of the real practical, day-to-day things that (home automation) can help them do. Our entrance (to the market), how we’ve entered, the legitimate way we’ve entered, the way we’ve sold it, the way we’ve chosen to advertise and market it has differentiated us, but it has also done a very good job of educating consumers and opening their eyes as to what this market is becoming very quickly and what it can do for them.”

While Petersen believes that traditional alarm dealers have done an “ok” job of educating the market about home automation, he said that up until the last six or eight months, their efforts had still been “very security oriented” and that there was still a lot of confusion in the marketplace.

“I think there were more transparencies needed in terms of pricing, packaging and really value and what you get for the dollars, as well as the different use cases it accomplishes,” said Petersen. “I still think there is room to improve. I think it has gotten better, I think we’re helping to push the envelope to increase awareness and to help educate and broaden people’s perspective on what this industry is becoming and what it can do for them, but it is somewhat slow moving is what I would say.”

Admittedly, Petersen said that the AT&T brand, as well as their existing sales channels and customer base have been an advantage for the company as they’ve rolled out the Digital Life offering.

“If you think about the promotions and some of the bundling that we’ll be doing later this year… I think those are assets that very much work in our favor as we continue to penetrate the market and grow the market,” he added. “Obviously the market needs to go from 20 percent (penetration rate) to well above that. There are all kinds of numbers out there, but I see no reason why we can’t grow this market to 35 percent.”

AT&T also has plans to take a more active role within the industry as it relates to joining various associations and having a voice in legislative issues that impact the market, according to Petersen

“We’re ramping up our efforts right now really getting our fingers in in terms of figuring out where we want to play and how serious we want to be,” he said. “But we jumped in with both feet and both arms all the way in terms of being a legitimate, bonafide security provider that no one can refute. Whether it becomes trade groups, whether it is trade associations or whether it is legislative efforts on the state or municipal front, we’re well prepared to do just that.”

Although entering a new market segment would seem like a daunting challenge to many organizations, Petersen said that wasn’t the case for AT&T when it launched Digital Life.

“The security business is interesting in that as we get in and raise the stakes and the bar in terms of the level of interactivity, remote accessibility and ease-of-use; I think we’re challenging ourselves quite frankly. Security, as it stands, wasn’t as challenging as, I think, us challenging ourselves to change the nature of the industry, the market and to help be a big contributor of growing the overall segment in terms of penetration,” Petersen said.   “We knew (security and home automation) was a good fit and we’re seeing that it was a good fit. “We’re very serious. We are not just treating this as a flash in the pan.”