Could Your Security Firm Survive Solely on RMR?
Is it possible for installing security companies to shut down installations and still survive on just recurring monthly revenue?
What if your firm didn’t do any installations? Impossible, right? Not for some security companies apparently during the recession.
At the recent ISC East event in New York City, Jorge Hevia, national marketing and sales manager for Napco Security, told me an amazing fact: a great number security integration companies completely stopped doing installations during the recession. They shut down their entire installation team, laid off every technician and support person possible, and maintained their business solely on recurring monthly revenue (RMR).
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Hevia, of course, would know this fact because Napco is a major supplier to security dealers who buy in bulk for items like PIRs, smoke detectors, door and window contacts, and alarm panels. Of course, these hunkered-down alarm dealers still needed to employ service technicians to handle problems that might have cropped up, and had either their own central station or a third-party monitoring relationship, and other minimal staff in place, but that’s it.
Imagine a custom installation company being able to do the same thing. According to the latest SSI‘s sister publication’s CE Pro Readership Study, integrators report 16 percent of total revenues came from RMR. That’s double what it was back in 2011 but still a far cry from the 50 percent RMR goal for security companies reported by IHS Research.
Chalk this one up to another value in building recurring revenue for your business.
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About the Author
Jason Knott
Jason Knott is Chief Content Officer for Emerald Expositions Connected Brands. Jason has covered low-voltage electronics as an editor since 1990, serving as editor and publisher of Security Sales & Integration. He joined CE Pro in 2000 and serves as Editor-in-Chief of that brand. He served as chairman of the Security Industry Association’s Education Committee from 2000-2004 and sat on the board of that association from 1998-2002. He is also a former board member of the Alarm Industry Research and Educational Foundation. He has been a member of the CEDIA Business Working Group since 2010. Jason graduated from the University of Southern California. Have a suggestion or a topic you want to read more about? Email Jason at [email protected]
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