Please upgrade to the new Edge browser, or use Chrome, Firefox or Safari, before continuing. Internet Explorer will not support the best shopping experience on the ADI Digital Branch site after March 12. close button

For several years, experts have recommended that low-voltage installers and dealers build a business model that includes recurring monthly revenue (RMR). Once almost exclusive to security and fire companies, RMR is now seen as a viable opportunity for AV, access control, video surveillance and other markets. Also, with the increase of cloud-based technologies, integrators no longer just sell and install systems, they can provide services related to their installations.

Because RMR is a predictable revenue stream, it can add a key layer of measurable growth to your business. RMR also allows you to develop a stronger relationship with your customer through the regularly scheduled services you can provide, and it can help increase repeat business for other new installations with those customers. Whether you already make recurring revenue from service agreements or monthly monitoring fees, you can improve your success with this business model by considering a few different options.

1. Recurring revenue does not have to be billed monthly

RMR, as the name suggests, is a monthly revenue stream. But billing on a monthly basis requires a lot of time and resources. One option installers and integrators should consider is building in monthly fees or revenue into different offerings.

Instead of billing customers for maintenance on a month-to-month basis, add the monthly maintenance agreement fee into the cost of the product to consumers, so that customers pay a one-time, upfront payment that includes fees for a certain amount of time, or consider combining fees so the customer pays quarterly or on an annual basis.

This allows you to leverage the benefits of RMR for your business without adding too many administrative hours to your workload.

2. Access control and video surveillance are growing markets

Maintenance agreements are popular in the fire market but are getting more common in small-to-medium businesses in access control. Cloud-based services for access control gives end users a better way of managing systems remotely, and they can be a huge boost to your RMR.

Using a cloud-based service lets you upcharge the cost of the service to your customers per door. This can be billed as a service agreement or included in the price of the product upfront.

In addition, licensing of mobile credentials can serve as a recurring revenue stream, since your customer will need to pay for each year that they want to continue using mobile access control.

You can offer cloud-based services in video surveillance as well, such as for storing and accessing recorded surveillance footage. Or you can choose to charge customers only for the labor of their video surveillance installations, but then lease the hardware and cloud licenses for a set amount of time — such as a one-, three- or five-year contract. Many installers have found long-term contracts like these to be a key facet of a successful business plan.

3. Offering less-common services like warranties

Can you guarantee your installation for a monthly, quarterly or annual fee? Just like a consumer electronics retailer sells you a three-year warranty on a laptop, you can offer your customers the ultimate protection against installation and hardware issues, ensuring their systems are always maintained to run smoothly. A strong degree of certainty can be very attractive to product users, and warranties are a proven revenue model.

You can also leverage ADI's services for RMR opportunities. Our Defendify cybersecurity tools package allows you to provide a value-added service to your customers and recurring revenue for you. The Defendify Reseller Partner Program gives you everything you need to market and sell our all-in-one cybersecurity platform, including a dedicated partner success team. This program is ideal for networking, video surveillance and enterprise connectivity dealers and installers.

Capture Remote Monitoring is a service ADI offers that allows you to monitor networks and devices remotely. The service will identify any device with an IP address on a network and alert you if a device or the network has an issue that requires attention. So you can use this service to monitor your customers' networks and devices, and by expanding your service offering, you'll have the opportunity to start a recurring revenue stream.

When it comes to video surveillance software, you can use our software renewal tracking service service as part of a software agreement with your end users. When you purchase Exacq software for your customers through ADI, we track renewal dates for you for free. This gives you the opportunity to market the service to your customers without doing the actual labor of keeping track of renewal dates.

4. Using third-party contractors can be income-generating

Because recurring-revenue opportunities like maintenance and service agreements often require more time and labor, some installers and dealers find that contracting out the work to a third party is worth it.

Though not common in AV, consider selling a service or maintenance agreement when you install commercial AV systems. In fact, there's an easy third-party solution for ADI's customers. With the acquisition of Herman Integration Services, Pro AV customers have easy access to subcontracted labor. You can subcontract your labor with Herman and use its professional technicians for multiple sites and clients, while passing on the cost to your end users.

This ensures that your end users always have access to AV professionals if there are equipment failures or outdated software or hardware that need to be fixed. Adding this layer of protection to your products and services is great for the customer experience, and it creates a meaningful avenue for repeat business and for word-of-mouth customer acquisition, which can add up to future revenue opportunities.

 

When looking into RMR, the most important consideration is not just what's best for your business, but what's best for your customers. Understanding the value of the warranties, service agreements and maintenance plans for your end users will help you sell and market your offerings more effectively.