There has been a decided push in both technology and interest — from both security integrators and customers — on the cloud-based services that bring recurring monthly revenue.
The benefits are many, but perhaps a good summary of the biggest reason to offer cloud-based services came from a recent ESA webinar titled “Top 5 Reasons a Security Integrator MUST Make RMR a Priority.” Presenter Maureen Perrelli, chief revenue officer for Brivo, described pursing RMR as “giving yourself a raise.”
The proliferation of cloud-based technology companies, including Brivo and others, means that there are a multitude of options on what to offer. But whether you are looking for access control, video or even cyber offerings for your customer, cloud-based services generally offer the following five benefits, according to Perrelli:
- Higher margins. The margin on RMR is twice as high as installation revenue and adds 15 times more value to your business than revenue from hardware and installation alone. For example, a traditional five-door access control project might bring total cost of $9,500 and a one-time profit of $3,000. In contrast a subscription-based offering might only deliver $1,000 in one-time profit, but up to $5,500 annually.
- No more relying on one-time projects. One of the biggest benefits to RMR-based offerings is not worrying about when you will get the next project that you need to rely on to pay the bills. RMR gives you a cushion of a steady flow of revenue each month. But even more importantly, it offers a stable base of customers and the opportunity to grow relationships over time, which benefits you and your customer. “It lets you get deeply ingrained in your customer’s business and known to that company for future opportunities, not to mention it’s an amazing way to get new business when they are talking to others in the industry. Word of mouth is stronger than we give it credit for,” she said.
- Consistent income without guessing. You have more room to really grow the pipeline and look at new routes to market. Traditionally integrators are working on one or more big projects and the time and energy involved it can be difficult to step back and see how else to drive revenue. An RMR income source can be a lifeline enabling integrators to pay bills in between projects. It also helps keep known cost for your customers during unpredictable times.
- Increase company value. One of the biggest reasons many security integrators start looking to RMR is to increase their business valuation. Your business is worth more. A potential buyer will pay a higher percentage on predictable monthly revenue.
- Grow your business. The RMR that a cloud access offering provides, for example, can modernize a reseller’s business, keep margins up and produce consistent revenue while being able to better serve customers. “The future of RMR as a whole will depend on many factors, with the most important thing being the technology that is involved. As long as cloud-based remains at the forefront, more customers will want access to the services they need to grow their business and for you to grow yours,” Perrelli said.
The bottom line is not only do adding RMR services help give your bottom line a boost (or a “raise”) but they also benefit customers and gives your company a cushion. “At the highest level recurring revenue helps integrators thrive in good times and survive when times get tough,” she added.
Perrelli suggests aiming for a minimum of 18-20 percent of revenue coming from RMR sources.
“The more you bundle recurring services with projects, the stronger your commitment to the customer, and the customer’s commitment to you,” she said. “You both get sticky with each other. Think about the raise you are getting with simple math. By leveraging RMR sales you receive a payment each month for services rendered. On top of this when you upsell and cross-sell that increases. You build a significant business knowing predictable income is coming to you.”
