“Savant has been the critical new addition to our business,” said an upstate NY Dealer...

Source: Inside Track, Volume XXVIII/20

... dealer with obvious excitement in his voice. “We have 2 solid years with them under our belt. It’s the best thing we have done to help our overall business. We are very happy with them.”

ALL THE THINGS DEALERS LIKE ABOUT SAVANT

Of the half dozen dealers I spoke with in late August and early September most professed to be very satisfied with the brand. “The great thing about Savant jobs,” said an Illinois dealer, “is that you do the install and you are not called back. No return trips. It just works like a charm.” “... it just works,” concurred a California dealer. “It’s very intuitive, very easy to use.” Other strengths the dealers mentioned included, “very easy to program.” “Reliable, innovative, excellent performance.” And as a result: “The brand is profitable!”

Of course, dealers also mentioned the fact that Savant’s integrated home solutions are built on the Apple operating platform. In fact, the Apple MAC mini is the Savant host
controller
that hosts Savant’s proprietary software, RacePoint Blueprint. “They truly leverage Apple,” said the NY dealer. “And Apple sales exploded. Apple defied the recession. And Savant harnesses all that technology.” “Everybody knows Apple,” noted a Connecticut dealer, “who does not want to be associated with that?” Actually, the IL dealer admitted that they had initially hesitated to bring the brand in because it was based on Apple. “But consumers love it because it’s Apple.” Another California dealer I happened to run into in front of the very busy Savant booth at the recent CEDIA Expo admitted that he was looking at Savant now “because we have customers who are
rabid Apple fans!”

WITH SAVANT JOBS. ONE ZONE LEADS TO ANOTHER ... AND ANOTHER

I asked dealers to describe typical jobs where they install Savant systems. The responses actually ran the gamut from quite big ($100,000, $150,000 and up) to jobs in the $20,000 range – initially. “Our typical Savant job is for about $20,000,” said the IL dealer. “It’s for a couple of zones and the products are controlled with iPads or smart phones. We love doing Savant jobs because, typically, the client will say, ‘I love it, and I want to add more zones.’” While some dealers have the opportunity to do major new construction jobs, for most, retrofit is currently still the most prevalent. “We recently did an old Audio Access system,” the CT dealer noted. “All the speaker wires etc. were already run. So we did not have to run any wires. You use WiFi for control. Typically, for us, the multi zone system and the whole house control are stock. The variation lies in the number of zones we do.” The NY dealer who said his core business with Savant covers distributed A/V, home theater, full automation and surveillance (with lighting control via LiteTouch, recently acquired by Savant, to be added) went into a bit more detail. Said he, “Our typical Savant job is 8 zones and brings in $50,000. It takes 3 people - 2 installers, 1 programmer - a total of one week, which is 1 day for the prewire, 1 day for programming, 1 day for cutting the holes and bringing in the equipment.” The rest of the time goes toward making sure the system works flawlessly and showing the customer how to operate it. Often, this dealer also said, “the customer then wants some more zones.” This dealer, furthermore, pointed out that “through Savant we really discovered networking. All the things you can access through iPads and iPhones. However, when you go to homes, you’ll find the customer is not connected to a network. All that wireless stuff can then be added on, so the client can access everything from the pool or the patio. That’s another $3,000 add-on, and it’s not usually shopped, the way a TV would be.”

THE IMPORTANCE OF DEALER TRAINING AND GREAT DEMOS ... AND A “BAG FEE”?

All the dealers I spoke with said they sent at least one person - usually a programmer - to Savant training. “It’s an up-front investment,” one of the dealers said. “You must buy the computer and the software and pay for at least 1 person to go to training. We sent 3 people. They came back Savant-certified. And once you are past that, you are ready to roll. Their software is very stable, so you are building on a solid foundation. And because it’s so cool, now we have peer-to-peer training in our shop. Everyone wants to demonstrate it, There’s real passion on the floor again!”

All the dealers I contacted said that they have invested in full blown demo systems. Said one, “I have a demo in the shop with 6 zones of music, security, lighting control, etc. I can show it in the store, or go to the customer’s house and access the security
cameras and the home theater in the store from my smart phone. Customers really like remote access. They can turn on the lights, the air conditioning, etc., from away.” The ultimate demo facilities are, of course, Savant’s Experience Centers in New York and at company headquarters in Hyannis, MA. Usually, dealers just make appointments for their clients. “Our customers can go on their own,” was a typical comment. “And
we encourage it. While we can demo in the store, the Experience Centers are more impressive.”

While most of these dealers had not experienced any problems with Savant and therefore “nothing needed to be handled,” one dealer related that “Savant has partnered with just about everyone. If there are problems, it is often that the profile of the partner product is not correct.” Getting that resolved “can sometimes take a day or two.” Asked to name anything they were not entirely happy with regarding their relationship with Savant, 2 dealers mentioned that the company requires dealers to pay $2,000/year for support. “Is that a new business model,” one of those dealers asked rhetorically, “like airlines now charging bag fees?”

SAVANT RESPONDS

“A lot of dealers equate the $2,000 charge with a charge for Tech Support. But that’s not true,” said Jim Carroll, Savant’s Exec. VP, Corporate Strategy. “We charge them for software maintenance. We are a software company. Most of our engineers are software guys. The dealers pay $2,000 a year for access to the latest iteration of the software (which is upgraded approximately every 3 months). In fact, Carroll made it quite
clear that Savant is one of those companies that has realized that their own success is very much dependent on the success of their dealers.

Those “urban legends” dealers told me about, how Savant CEO Robert Madonna had watched incredulously as custom integrators installed and programmed a system in his apartment overlooking New York’s Central Park and had come to the conclusion that there had to be a better way, are all too true. Yes, Carroll s aid, he, too, was blown away by all the programming dealers had to do. Madonna, a pioneering engineer in the telecom industry, had founded Excel Switching Corporation in 1988, where he was joined by Carroll, who has both an engineering and a business background. They took
Excel public in 1997 and sold it to Lucent Technology in 1999. Then, in 2005, they co-founded Savant Systems LLC.

ALL THAT GOES INTO BUILDING A GREAT COMPANY

One of the first things he did, Carroll said, was interview local dealers, asking them just what control and automation did for their business. “They could tell you that it made their jobs bigger in terms of revenue. But they could not tell you if their profitability was up nor did they, typically, have a well thought out business plan that included things like an exit strategy, for example. So we said, we need a better business model for the
dealers . It started there.”

Savant was very clear that they had to deliver products that performed well, were innovative, reliable and easy to integrate. This would allow dealers to win more jobs and have happier customers. And if the systems were less programming intensive, they could do more jobs with fewer resources and thus attain a higher profitability level. “And that’s a formula for winning.” But, I interjected, you started delivering products just when the most severe recession in a generation hit! “That’s true,” Carroll admitted with a laugh, “but to some degree that was actually perfect.” Had it not been for the recession, it would have been very difficult to get dealers’ attention, he suggested. “We were able to get mind share. Of course, initially, it did hinder sales. We heard, ‘well, this is great! I wish I had some jobs to put it in.’” Since those early days, however, Carroll noted, Savant is “growing much quicker than the industry.”

One indicator of their rapid growth: Earlier this year Savant moved from Osterville, MA, where they were operating out of 4 buildings, to a single larger building in Hyannis, MA – and they already have had to expand that space. In addition, they acquired Salt Lake City, UT-based LiteTouch from Nortek. All in all they are now up to a staff of 175. But one thing they no longer do in house is manufacture products. That has been
outsourced to New Hampshire-based contract manufacturer CTS, “simply because the volume dictated it. And they do a great job for us.”

Source: Inside Track, Volume XXVIII/20

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