Snap One Launches Control4 Connect & Control4 Assist to Elevate the Customer Experience and Create New Recurring Revenue Opportunities for Partners
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Insights
The introduction of Snap One's Control4 Connect and Control4 Assist services signifies a strategic pivot towards a software and service-oriented business model within the custom integration (CI) industry. This shift aligns with broader market trends where companies are increasingly adopting Software as a Service (SaaS) models, which typically provide more predictable, recurring revenue streams compared to one-time hardware sales.
From a market perspective, this move could potentially open up new revenue channels for Snap One, while also increasing customer stickiness and lifetime value. The tiered pricing strategy for the Control4 Connect service, ranging from free to $249 annually, coupled with the revenue-sharing model for partners, suggests an effort to cater to a diverse customer base. Moreover, the launch of the high-end Assist Premium service at $2,999 per year indicates Snap One's intention to capture the more affluent segment of the market that values premium support.
The announcement is likely to be well received by investors, as the transition to a SaaS model can lead to higher valuation multiples. Companies with recurring revenue models are often valued higher than those with transactional sales models due to the predictability and stability of earnings. Additionally, the direct wire payment system for revenue sharing simplifies the transaction process for partners, which could enhance partner satisfaction and decrease churn.
The financial implications of Snap One's new offerings can be significant for the company's growth and profitability. By securing recurring revenue streams through Control4 Connect and Control4 Assist services, Snap One is likely to improve its gross margin profile and enhance its earnings visibility. The move from a $30 product credit to a monthly revenue share paid by direct wire also represents a modernization of the partner compensation structure, which could be an incentive for partners to promote these services more aggressively.
For investors, the key metrics to watch would be the adoption rate of the new services and the impact on Snap One's Customer Acquisition Costs (CAC) and Lifetime Value (LTV). A successful implementation could lead to an improved LTV/CAC ratio, a critical measure of the efficiency and scalability of the company's growth. Furthermore, Snap One's emphasis on no additional requirements for existing Control4 customers or 4Sight subscribers to switch to the new services could help in retaining the current customer base while minimizing friction during the transition.
However, investors should also be mindful of the risks associated with the implementation of new service models, such as potential operational challenges and the need for continuous investment in customer support infrastructure. The company's next quarterly earnings report will be an important indicator of the initial success of these new services and their impact on the company's financial performance.
The launch of Control4 Connect and Control4 Assist by Snap One reflects a broader industry trend towards interconnected smart home ecosystems and the rising importance of customer experience in the technology sector. By providing a comprehensive suite of software and support services, Snap One is positioning itself as a leader in the CI industry's transition from hardware-centric to software-centric solutions.
From a technological standpoint, the services' focus on system control, functionality and integration with new devices is critical. As the Internet of Things (IoT) continues to expand, the ability to seamlessly update and integrate devices is a competitive advantage. The proactive system monitoring and remote support offered through Control4 Assist also tap into the growing demand for managed services within the technology sector.
For stakeholders, the long-term benefits include potential reductions in system downtime and improved customer satisfaction, which can translate into higher referral rates and stronger brand loyalty. The emphasis on professional integrators maintaining and optimizing systems underscores the importance of service quality in the age of smart homes and businesses. The challenge for Snap One will be to ensure that these services deliver on their promises and that the infrastructure supporting them scales effectively with demand.
New manufacturer-backed software and support services ensure customers are supported, Partners are compensated, and systems are optimized
CHARLOTTE, N.C., Jan. 18, 2024 (GLOBE NEWSWIRE) -- In a significant move to evolve the core business model of the Custom Integration industry, Snap One (Nasdaq: SNPO) today announced the launch of Control4 Connect & Control4 Assist – the new software and support offerings that improve end-user experiences while empowering U.S.-based Control4 dealers to provide superior customer service, increase profitability through recurring revenue, and encourage positive long-term client relationships.
Snap One spent more than a year developing the Control4 Connect & Control4 Assist offerings in close collaboration with 23 integrators, while also leveraging experience from thousands of Parasol customers and more than 100,000 4Sight subscribers, to ensure the services meet the needs of integrators and customers, are easy to use, and deliver in-demand experiences and enhancements.
“The homes and businesses of today rely on a wide range of networked systems and devices to operate. This makes software updates and system monitoring critical to ensure reliability, confidence and continued use,” John Heyman, Snap One CEO emphasized. “As such, the traditional business model of the CI integrator must evolve into an ongoing partnership with their customers. We believe that the customer understands the importance of working with professional integrators to keep their investment current – and that they’re willing to pay to ensure their systems are maintained and optimized.”
According to Heyman, the evolution of the industry is inevitable as it moves from hardware centric to one more grounded in software and new software integrations. “The launch of Control4 Connect and Assist meet the business and experiential needs of this new emerging business model, one that represents a major opportunity for our Partners, who can now more easily foster stronger long-term relationships with customers to drive greater satisfaction and increase profits,” he said.
Control4 Connect Powers the Possible
The Control4 Connect software service enables essential features that keep customers’ systems up to date and secure, provides convenient access and insights, and ensures smooth integration with new devices as they are released. Control4 Connect provides system control and functionality, while delivering in-demand smart living features such as voice control, remote access, Intercom Anywhere, When >>Then scene programming, system backups, on-the-go visibility and personalization of notification for mobile devices. Beginning April 23, 2024, Control4 Connect will be required for all new U.S. Control4 systems. For systems installed prior to that date, 4Sight continues to be available.
One of the biggest advantages of Control4 Connect for Control4 dealers is that they gain multiple recurring revenue streams that they don’t have to manage: customers pay for the service directly in the Control4 app upon registration of their new system, enabling Snap One to manage billing and payment for Partners. There’s no website to develop, no software to learn, and no records to manage.
The Control4 Connect benefits for customers are as meaningful as the benefits for Partners. “With Control4 Connect, customers will gain more control and understanding over their systems, increasing satisfaction,” Heyman said. “System education and monthly system reports inform them on the status of their systems, and help build their confidence as users. Plus, enhancements such as simplifications to initial setup, easy access to billing management, and convenient customer help sections further elevate the experience.”
Starting in April, Connect will be included on all new Control4 systems, and the annual customer cost will vary depending on the type of controller installed. Systems with a CA-1 model are free of charge, systems with a Core Lite unit cost
Partners will receive a generous revenue share paid monthly over 12 months by direct wire payment – a significant change from the
There will be no changes required for existing Control4 customers or 4Sight subscribers, but certain software improvements will only be made available to active Control4 Connect accounts.
"In discussing Connect with my clients, there has not been a single client that has reacted negatively to it. They all understand the world is evolving and changing. They all understand software as a service models. This is presented to them daily,” said Snap One Partner, Ed Gilmore of Gilmore's Sound Advice. “I think they're a little comforted by the fact that a manufacturer takes their product seriously enough that they're going to maintain and support it through software."
Control4 Assist: We Take the Calls, Integrators Take the Credit
Available immediately to Partners that become Assist Authorized, Control4 Assist is an optional remote support service that significantly reduces the burden of providing customer support while still providing recurring revenue benefits.
For an annual fee of
Customers requiring more frequent support or who want additional assistance with post-install programming, 24/7/365 support access, and more, can upgrade to the concierge-level Assist Premium service for
"Control4 Assist helps my technicians to not have to field calls for simple matters during the workday, after hours and over the weekends,” shared Snap One Partner, Chris Bell of Bell Integrated Home Solutions. “It helps my techs stay focused on their daily task at hand and allows for uninterrupted after hours, weekend and family time for non-emergency situations.”
Snap One will provide Assist Authorized Partners with marketing assets to make conversations with customers simple and informative. Partners will receive revenue share for Assist and Assist Premium services, paid monthly over 12 months by direct wire payment.
“Through our experience with Parasol, we have identified the opportunity to better support our Partners and their customers. Control4 Assist and Assist Premium offer Control4 Partners of all sizes unparalleled recurring revenue opportunities and meet today’s customer demands,” Heyman said. “This is a significant opportunity for Partners at every level, even if they already operate other recurring services, because it offloads daily customer questions and requests to dedicated Control4 experts who focus exclusively on service. The result is happier customers, fewer emergency calls, more referrals, and improved quality of life for Partners with peace of mind that customers are being taken care of.”
According to Snap One Partner Johnathan George of iWired, “I believe that Connect and Assist are the first steps forward for integrators to begin to change their business models from the ground up – to no longer think about individual projects, but to think about ongoing lifetime value, and creating lifetime value with the customer base that they serve every single day.”
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About Snap One
As a leading manufacturer and distributor of Smart Living technology, Snap One empowers its vast network of professional integrators to deliver entertainment, connectivity, control, and security solutions to residential and commercial end customers worldwide. Snap One distributes an expansive portfolio of proprietary and third-party products through its intuitive online portal and local branch network, blending the benefits of e-commerce with the convenience of same-day pickup. In addition to products, the company provides software, award-winning support, and digital workflow tools to help its integrator partners build thriving and profitable businesses. Additional information about Snap One can be found at snapone.com.
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