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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 and other markets.

Because RMR is a predictable revenue stream, it can add a key layer of measurable growth to your business. 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 monthly billing 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 is a growing market with room for RMR

Maintenance agreements are popular in the fire market but are getting more common in small-to-medium business 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.

Likewise, licensing of mobile credentials is a recurring revenue stream since your customer will need to pay for each year that they want to continue using mobile access control.

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 an RMR opportunity when it comes to video surveillance software. You can use our software renewal tracking 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.

Other ADI services that provide excellent RMR opportunities include our Defendify cybersecurity tools package, which you can offer to your customers through our reseller program and our Capture Remote Monitoring service, which allows you to monitor networks and devices remotely.

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.