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According to the Mordor Intelligence research company, in 2018 the global smart thermostat market was valued at USD 689.8 million and could grow to more than $2.3 billion by 2024. The company cites a Cowen & Co report that about 60 million Americans used virtual personal assistants and voice-controlled speakers during 2017, while Amazon Echo was used by 24%, and Google Home by 31% for home control settings.

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HVAC professionals are experiencing this first hand and the stories they tell in our trade magazines are both celebratory and cautionary. Some are happy that tech-savvy early adopters of smart home systems are driving up the average price of a thermostat. Some are worried about a ‘bring your own technology’ trend, meaning customers who buy thermostats and other equipment themselves online or at retail store, then negotiate on the installation charge.

Despite the steep growth expected, some say it actually represents a certain amount of leveling out from a frenetic period between 2012 and 2017; while others point out that the smart thermostat adoption rate in North America has tripled in the last 3 years from 4% to 12%. Whatever the exact growth rate may be, marketing leaders are quite certain that smart thermostats won’t become a disappearing fad. They are woven into the fabric of the smart home lifestyle of the future.

The main factors driving demand are convenience, energy conservation, energy tracking, and potential energy savings. Ecobee suggests its can save an average of 23% off energy bills. Nest says its systems will save 10-12% on heating and 15% on cooling.

More knowledgeable customers and installers are interested in diagnostic features, like those offered by an Emerson system that comes with 10 sensors that monitor and report on performance and efficiency, and can lead to preventive maintenance work.

While educated customers are seen as a threat by some installers, others note that people buying smart thermostats and knowing more about their capability, are also likely to upgrade to premium add-ons that the HVAC contractor is usually best positioned to supply and install. One marketing manager noted recently that homeowners often start with thermostats then add the voice assistant, exterior camera, automatic lights, and door locks.

In addition, although early adopters might be do-it-yourselfers, many think that as the general population embraces smart home equipment, and packages become broader and more capable, the norm will be to have it all installed by a professional.

It appears that voice assistant features are among the most requested, as they move from novelty to expectation, probably because of the undeniable convenience factor. Schedule-setting is also popular.

Some of the cautions for contractors include: studying up in a fast changing sector to ensure you are recommending systems that offer good value; choosing manufacturers who are working on industry standards and compatibility; and paying attention to user experience, especially through the mobile app. Some think the mobile app usability is more important than the thermostat touch screen.

From a contractor’s perspective, smart home systems, which seem to be driven by smart thermostat discussions, represent a real opportunity, not just for expanding revenue or margins, but also for “suggestion selling” during slow months. Making a home smarter is something many people want to eventually do ‘when the time is right.’ A proactive, strategically designed marketing and sales plan related to smart home technology could prove very beneficial for many contractors.