It is time to abbreviate the abbreviation. For decades, the security industry has strongly associated recurring monthly revenue (RMR) with monitoring, namely alarm monitoring. The connection is so strong to alarm monitoring that some define RMR as recurring monitoring revenue. Whether the “M” stands for monthly or monitoring one could almost argue for removing the long-standing connotation by taking the letter out — shortening RMR to recurring revenue (RR). Indeed, a broader application of RMR opportunities in both the residential and commercial sectors, combined with increasing technological capabilities and admirable industry creativity is enabling dealers and integrators to gain RMR via multiple forms that stretch far beyond monitoring and alarms.

Crime Prevention Security Systems/Custom Home Entertainment, Gainesville, Fla., is one of the companies seizing RMR opportunities in every form available — on both the residential and commercial sides. It also has a company-wide focus on seeking out and meeting customer needs, which frequently leads to new RMR opportunities.

The ability to discover all of the available RMR opportunities starts with paying attention, shares Randi Elrad, vice president of sales and co-founder of Crime Prevention.

“To capitalize on all the RMR opportunities available to your company, you have to be able to think outside the box. I can name 100 things you could monitor or offer to receive recurring revenue. The list is endless. With that mentality, a lot of RMR opportunities are found by simply inquiring and being observant as you begin a new relationship with an end user,” Elrad describes.

RMR’s less transparent value is that it takes your relationship to a partner level, according to Jacqueline Grimm, director of security solutions, Diebold Inc., Uniontown, Ohio

“The ability to add RMR means you are adding value-added services to your customers. With that you are extending your relationship with your customer and, in a lot of cases, you are changing your relationship and becoming less of a vendor partner and more of a true partner,” Grimm explains.

If one project could exhibit Crime Prevention’s ability to operate as a true partner while capturing RMR in all its available forms at a specific site, it would be On Top of the World Inc., a 12,972-acre, active-adult community in Ocala, Fla. (See the sidebar, “On Top of the World,” on right for the details.)

Presented here are nine successful RMR business opportunities being offered by companies around the industry. This list only scratches the surface, illuminating one key principle of RMR’s potential aptly summarized by David Jablonski, president of Burtel Commercial Security Systems in Alexandria, Va.: “It is unlimited.”

1) Pinging Dynamic IP Addresses

Many of the new RMR opportunities in the industry evolve from a proactive focus on meeting customers’ needs. Find a pain point and you’ve probably found an RMR opportunity someone will happily pay for. Large or small company, commercial or residential, everyone has daily hassles/inconveniences that can be alleviated with the capabilities of today’s technologies.

H&S Protection Systems Inc., Waukesha, Wis., observed a major pain point for its customers and found a creative fix that made customers happy and gave the company an easy source of RMR.

Chris Tolliver, operations manager, describes the unique service: “Most small to medium businesses and residences have dynamic IP addresses, which they pay a smaller sum of money for than for a static IP address. Static IP addresses never change, but dynamic IP addresses do change and that can knock a system offline. It was a constant battle with us and our customers. The dynamic IP address would change, knocking the system offline; we would be frustrated to go out and set the system up again with the new address and end users would be frustrated because we were charging them to come out and reprogram. It wasn’t just about the dollar amount; it was also the frustration and inconvenience.

“We saw an opportunity and created the H&S DNS Monitoring Service where we use software that is programmed to consistently ping the Internet provider and look at what IP address is in use. It is like you waking up and calling your mom and asking her what phone number you are supposed to use to call her at that day. Then if you need to call her that day, you call that number. This means the connection is never interrupted,” he explains.

H&S surveyed Internet providers and determined what the difference was for static IP and dynamic IP addresses. Even charging $10 a month for the service, the company saves customers at least $15 a month, often more. Tolliver also says the service has commercial and residential appeal with a ratio of 70 percent commercial and 30 percent residential participants. “On the residential side, a lot of snowbirds want to watch their summer homes via computer or smartphone and they want to guarantee that connection,” he says.

“We make so much money at it without ever rolling a truck. The first month covers our cost easily and the remaining 11 months are 100 percent profit. Most importantly, customers love it and are no longer frustrated. They don’t have to pay for an expensive static IP address, have frequent service calls or deal with the Internet and cable companies.”

2) Customer Reports

Cable companies and repeat service calls may be a pain, but reports — running them, writing them, even getting them to tell you exactly what you want — can be just as painful. It’s an opportunity the Protection Bureau, Exton, Pa., SDM’s 2010 Dealer of the Year, is capitalizing on by offering custom reports for clients.

J. Matthew Ladd, president and chief operating officer at Protection Bureau describes the service: “Although manufacturers generally offer quality reports for their systems, sometimes our clients need reports that are far more customized. At other times the customers want a report that isn’t in there at all. To solve that problem, we offer customer report writing that is contracted with the customer along with the maintenance of the reports.

“Our software writers can manipulate the data and generate a report for a cost. We have customers we are contracted with where we will come in every year to make sure their automated reports are all optimally running, producing correct data, etc. Plus we will make enhancements and set up additional reporting as their needs for the reporting develops. We have some smart people who understand IT and software at our company and we’re taking advantage of their abilities to provide far more value to our customers,” Ladd says.

3) Object Monitoring

One flexible RMR generator for Crime Prevention is object monitoring. The technological advancements being made to sensors have opened the door to monitoring an ever-increasing list of objects and conditions, and Crime Prevention takes full advantage.

“Liquor cabinets, jewelry, gun cabinets, wine cellars, medicine cabinets; anything that you can imagine that you would want to be notified about, we can find a way to do that and add RMR. If something is moved or opened, if the temperature changes, if a pipe bursts, we can notify customers about anything that has value to them.

“Being observant and training your sales staff to ask questions and look at houses and businesses to determine what may be important and have value opens the door for a lot of custom services,” says John Pastore, president and co-founder, along with Randi Elrad, of Crime Prevention.

Gordon Hope, general manager of Honeywell Security & Communication’s AlarmNet business, adds, “The value of your recurring services can be directly related to the number of sensors you willing to apply to the service. Putting in another data point [sensor] adds value to the service that notifies customers of something they would like to know, creating more value for the RMR. Security has a certain initial value, but many end users look at those ‘add-on’ services as even more valuable than the security because those services fill a need the customer didn’t know how to meet.”

4) Environmental Monitoring

A complement to object monitoring is environmental monitoring, where sensors are used to detect changes in temperature, humidity, water, gases, pressure, dry contacts and more. It is a strong service in vertical markets, bearing the burden of critical condition monitoring such as medical, blood storage, pharmaceutical, HVAC, food service and more. The service is so strong that Richard Kramer, commercial sales manager for Utah, ADT, Boca Raton, Fla., says it actually sells security systems. His company uses the critical condition monitoring system, EnviroAlert, from Winland Electronics Inc. The system provides two-way access to remotely monitor and collect data on up to eight sensors.

“Environmental monitoring with a system like this does add RMR, but more often it will be the actual reason we get the job to begin with and lead to future work, making it an even more substantial addition to our business. Many companies have a lot to lose if something goes wrong in the environment — and environmental monitoring is a mandatory, time-consuming process for a lot of companies, but this service makes it easy. A lot of our customers would get the burglar alarm just to have this service.”

5) Interactive Services

Interactive services are not exceptionally new, but the list of interactive services available today is not the list available six months ago.

“The good news for security dealers is that a growing number of interactive services are available today,” says Jay Kenny, vice president of marketing, Alarm.com, Vienna, Va. Alarm.com allows dealers to add those services for a cost and then the dealer resells the service to the customer for whatever price they want.

With a huge offering of interactive services available today, Kenny says there is no consistent approach to choosing just how many to offer.

“Dealers like Vivint sell the entire package — an end-to-end solution as a complete bundle, but other dealers will use a bundling and packaging approach (alarms plus interactive services, alarms plus energy management, etc.), while others still will just sell the basic interactive service and come back a year later and suggest new services to the customer or, when someone calls about a service they’ve heard of say, ‘We can turn that on for you.’

“Not every customer wants the end-to-end solutions. Some may just want security, while some may only want video in addition to security, etc. The people we see the most successful are the ones who can offer anything — and then let the customer choose,” Kenny observes.

See “Interactive Services” on page 58 for a list of some of the in-demand interactive services currently available.

6) Service/Maintenance Contracts

In a twist on standard maintenance, companies such as American Video and Security Ltd., Las Vegas, are offering customers preventative maintenance agreements. This is a strong RMR source in the current economy where companies have to keep the existing equipment and are unable to install completely new systems, points out the company’s president and owner, Larry Folsom.

“Many companies have underfunded their facilities for the last three years or more. The systems are failing and they cannot afford to ‘throw away to buy new.’ Preventative maintenance agreements help companies work with the old systems for a cost they can afford,” Folsom says.

The company focuses on medium to large legacy systems such as homeowners associations, large business campuses and shopping malls, but also points out that that opportunity applies to any existing system.

Folsom suggests a careful assessment when creating preventative maintenance contracts. “First, always use common sense, walk the site and make detailed maps. Don’t forget to add time and charges for lifts, large facilities and difficult environments,” Folsom explains. American Video and Security never takes responsibility for or warranties the clients’ existing equipment. A good starting point to estimate time is 15 minutes per camera and a half hour per DVR / NVR, Folsom says.

7) Health Monitoring

System performance is also the focus of another related — and growing — RMR opportunity: health monitoring. Protection Bureau provides health monitoring for its customers. And the opportunity is bigger than ever thanks to new technology, Ladd points out.

“The health monitoring of systems has grown tremendously. While it started out with the ability to go out and do health monitoring of DVRs and those types of appliances, now we’ve found out we can provide that service to almost any IP device as technology has advanced. We can ping access controllers on the networks, cameras — anything IP — and assure it is up and running properly. If it isn’t, we can respond and help get it back online. It is an invisible check where there is only an issue if there is a problem. A key benefit is that it doesn’t have a high cost associated with it for our company because it is an automatically generated service, yet it provides a tremendous value to the client at the same time,” Ladd explains.

8) Video

Companies continue to find new ways to generate RMR with video even though, as Honeywell’s Hope describes it, it is “still in its infancy of being marked through the security channel.” It is changing and expanding at such a rapid rate that there is always a new twist on the opportunity.

“Video RMR is not even necessarily tied to security anymore. It can be video by itself being used in a broad variety of applications to provide the ability for a consumer to see things. It is a very powerful draw and the whole vertical of video is not only gaining popularity but also a tremendous amount of focus as even a stand-alone sales unit within security,” Hope says.

“Remote control and video are being added residentially and commercially. Commercially the video technology you see invading homes is equally applicable to commercial environments. Cameras looking at different areas and sending notifications about things that happen in those areas, like people entering or existing, are simple applications, but the simplest one are usually the ones that resonate the most and have the most value,” Hope maintains.

Burtel Commercial Security Systems generates video-based RMR using the CheckVideo® intelligent video alarm verification solution that transforms analog security cameras into video sensors, according to its president, David Jablonski. The system “watches” every camera 24/7 for events of interest and extends the security perimeter to outdoor areas where PIR motion detection is not effective. Video alerts are based on the presence of people and vehicles, not just motion, and can be sent to the central monitoring service, email addresses, smartphones, or the secure CheckVideo Web portal.

“We attach RMR by charging for every triggered event,” Jablonski explains. “Every time the operator views an event, we charge for it. We’ll agree on an initial amount for a set number of events per month and then companies are charged per event for anything beyond that number. Companies love the service. A guard at certain sites would cost them $4,000 or $5,000 a month, but guards sleep, turn their heads, etc., while cameras don’t.

9) Storage

Video often opens the door for storage RMR, although the service has multiple possibilities, including hard drive data, server data, access control data and more. RMR from storage services isn’t one size fits all, and it takes multiple forms at Diebold.

“Remote storage is an exciting piece for us,” Grimm emphasizes. “We have seen it pick up in a couple of different ways. First, we have customers who are trading out DVRs and upgrading. They have to figure out what they should do with the video. Others use our services to help with the challenge of saving video for long amounts of time, while others use our storage services like a form of redundancy. We have seen other customers want to add a specialized view in a particular area, and maybe their DVR wouldn’t accept that type of camera or is maxed out on cameras. Our service allows them to add cameras in places they wouldn’t be able to without significant cost otherwise. Other customers are converting to not having a DVR at all, especially for sites with four cameras or less. A DVR is not a trivial expense and this service eliminates it.”

Grimm says Diebold offers a checklist to dealers and integrators so they can walk through “what if” scenarios with customers and create the right storage solutions and appropriate pricing.

Maximizing the Possibilites

Jablonski says every single proposal that goes out of his company’s office has RMR tied to it one way or the other.

“Maintenance, some form of monitoring, you name it — there is always something tied to RMR because it is so critical to the long-term survival of any company,” he says.

Says Kramer, “When you find out customers’ problems instead of simply going through the motions of offering a basic system you instantly add value, sell more systems, and make more money when you sell them.”

That, in turn, solves the age old problem of making money for the security dealers and integrators. Win, win. n

Editor’s Note:

The new RMR opportunities in this article only scratch the surface of what the industry is doing. Join the conversation. Has your company implemented an innovative RMR service? Log onto www.sdmmag.com and comment on this story.