Last year we interviewed Rafi Zauer, head of marketing at Essence Group, about the home automation brand’s disruption of traditional business models in the professional security monitoring market.
More than a year on and Zauer reflected on another sea change in the Israel-headquartered company’s business model – one that has received an enthusiastic response from security market players.
As well as plans to share recurring revenues with distributors and service providers, Zauer discussed the latest version of its app, an integration with Google Assistant, awards won in 2018 and products under development.
IFSEC Global: Hi, Rafi. What are the major recent and ongoing developments at Essence?
Rafi Zauer: At IFSEC we focused on three major things.
Number one was the new version of our app. From the beginning, we’ve been focused on a fully connected smart home experience, and the user app is the most important facet of that.
Now, like everyone else, we have the hardware, we have the panel, the hub, the gateway. But what we’re trying to get across more is the [quality of] user experience – which brings in more users to our service providers but also quality to the user engagement.
So, if we’re working with security companies – as well as insurance companies and telcos – user engagement is very important to them to gain customer trust and bring in more users.
Number two is voice control. We first demoed our Google Assistant integration at CES 2018 at the beginning of the year. That’s a very consumer-focused show. Then we came to IFSEC and found great interest in what we’d done. Because IFSEC is more about security cameras and professionally monitored alarm systems, it was less about how the user can interact with the system.
We showed how you can control your entire system, including rule scenarios and arming and disarming through voice commands.
“We had great reactions because it’s something different to the run-of-the-mill installation company”
People loved it. We had great reactions because it’s something different to the run-of-the-mill installation company.
The third side of this: we looked at the market, how we work and how we can offer the traditional security market something it hasn’t had up until now. The market is made up of a value chain of manufacturers, distributors, installers and… we’ll call them service providers.
ARCs are offering the services, the monitoring, and we saw that distributors, and to some extent installers, weren’t enjoying any kind of recurring revenue.
The end user doesn’t know who they are. They sell a product, make their margin, and move on.
Now volumes are going up but margins are going down. So we’re noticing, from interactions with the market, that distributors and installers are looking for a way to enjoy more of the revenue opportunities in the market.
So we created a new business model, supported in our platform: revenue-sharing opportunities for – for want of a better word – box movers. A distributor can then sell a product to an installer, and it ends up in the home. The end user will start using the app and paying for this service, and we share the revenue with the rest of the value chain.
If it’s just a distributor, or distributor and installer, they earn continuing revenue from the product. It gives them the opportunity to brand themselves and engage with the customer. Plus it gives them more engagement across the value chain of the security industry, whether it’s monitored or non-monitored.
IG: Presumably this concept is popular with distributors and installers?
RZ: They loved it. Our previous business model was an end-to-end system we took to monitoring companies. Our business wasn’t focused on anyone else.
But this year at IFSEC we could say to distributors: “We have something for you – and not only that, we can help you earn more money.”
We had a lot of follow-up engagement with that after IFSEC. We believe the concept is unique – nobody else has thought about engaging the entire value chain in this way.
IG: Tell us a bit more about how the business model works – for both the service provider and end user?
RZ: The distributing channel can brand the product, brand the app. The end user would engage directly with us because we manage the entire network, the services, and billing. We share the revenue with the partner.
“Users can choose whether to continue with all added services at a price or just keep certain features”
The traditional model is freemium, where the user for a certain amount of time gets the whole app feature set. Then they can choose whether to continue with all added services at a price or just keep certain features, numbers of users, number of devices you can connect… All this is totally configurable and flexible and can be built into your business model.
IG: You said the app was more intuitive. What else does the new version introduce?
RZ: We looked at the last version and said: “What functionalities do they use most? What do they need to be most accessible?
For example, we have worked in the monitored security industry for 25 years. For users, history is really important, so we had it on the home screen. To declutter your home screen, we removed the event history and made the arming state the most important information.
Access to favorites was very important, so we put that in a very accessible place.
We created more rule scenarios and schedules and made that process a lot easier.
You don’t see this in traditional alarm systems. There’s an ability to connect to third-party home automation devices, to integrate it into your daily life. You can add a schedule that connects arming or disarming your system to your thermostat.
You can connect to devices managed over the IoT infrastructure. So, for example, Nest is not connected through local connectivity, it’s over the cloud and has its own app. We combine this user experience is all in one app; you’re not using different apps to manage different things.
All this is quite advanced, we believe, for the traditional security sector.
IG: You’ve won a few awards this year…
RZ: We’ve won three awards, two in the telecare sector which is our other main line of business.
We also had our first foray into the Asian market from a marketing perspective. We went to the Secutech show in Taipei in April with a soft launch of the three things I mentioned.
Singapore, South Korea, and Taiwan are our major focuses in Asia.
We won an award at Secutech for the most popular IoT security smart home system. They put the finalists into a big viewing area, and the visitors were invited to get an explanation and try the product. Then we were voted the most popular product at the show.
IG: That’s a nice bit of PR. And the voice operation: did that work OK when demonstrated?
RZ: It’s a relatively new technology, but when we demoed at IFSEC and Secutech, there were almost no technical issues. Remember this is partly because of Google, who have an amazing product.
Even in an exhibition environment, where you have so much background noise, everything worked well.
Google is very intuitive, so you can give commands in many different ways.
IG: What are Essence’s priorities in terms of product development over the next year or two?
RZ: We’re looking to do even more in the area of voice interactivity. Alongside the integration with open platforms like Amazon and Google, we’re going to bring in our own off-the-shelf voice interactivity inside our hardware. It will offer an even richer experience with regards to scenarios.
So, you could say, “If this door opens between the times of two and three in the afternoon, then turn my light on.” That’s something we’re working on right now, together with a technology partner.
We’re working on a few new hardware devices, including a multi-sensor smoke detector. Safety and environmental issues are becoming more and more important, as more countries legislate. So the more intelligent these devices become, the better it will be for the consumer.
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