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RMR Rocket Ready for Technology Takeoff

In the latest Advisory Board Forum, ASG Security President and CEO Joe Nuccio discusses reaching for the cloud to create new RMR.




In today’s economy, the drive to secure new customers is becoming more competitive and cost sensitive. We are all experiencing it. Consumers demand premier service at a discount price. This is the environment we live in today — it’s survival of the fittest. Many companies are having difficulty getting large capital expenditures approved for security installations. However, monthly operating budgets are much more tolerant and are likely to get approved. So, as an industry, how do we fit in?

Back in the glory days, we’d sell leased systems whereby the RMR included maintenance, monitoring and rental of the system all bundled together in one monthly fee. It served as a tool to move the capital outlay off the customer and onto the dealer to create more accounts at a higher average RMR. This was true even for very large commercial systems. The driver back then was that systems were considerably more expensive to purchase and install than current electronic solutions. Defraying the upfront investment to create the customer required more capital outlay on our part, but it provided a very sticky customer with a long shelf life in return. 

Today, we are pretty much back in the same place but for different reasons. The principle barrier to the customer creation trajectory that we know is out there is less about cost and more about the economy. The price of technology has definitely come down during the past decade, unlocking more potential buyers for the industry. Years ago, only a sophisticated commercial enterprise could afford to implement video surveillance and access control. The landscape has changed dramatically and, as a result, there are many more prospective customers to sell to and a whole lot more companies to sell to them.

The opportunity for dealers to gain market share in this environment is all about leveraging technology to reduce the cost of entry and gain increased RMR in the process. It’s time for my fellow integrators, both small and large, to truly appreciate today’s opportunity to turn what was previously a capital investment into a subscription-based recurring revenue service. The convergence of cloud-based technology, along with a prolonged rocky economy, has actually unlocked a golden opportunity for our industry to grow the RMR pie across multiple service categories.

Software as a service (SaaS), cloud services and enhanced services was unfamiliar jargon for the security industry just a few short years ago. Now, whether it is managed or hosted video or access control, there is a clear and present strategy to deal with the economic conundrum we are faced with and rapidly grow our businesses at the same time. The ability to design and deploy systems for our customers with less hardware expense while providing more intelligence, mobility and control is the game-changer that will allow us to take the security industry to the next level.

The opportunity to leverage IP and cloud technology to create new RMR exists at every segment of the marketplace. This year, my company will sell as many video surveillance cameras in the residential sector as we did in the commercial category — and with no costly DVRs. Everything is in the cloud. Consumers love this new technology and are willing to sacrifice more of their disposable income toward it, finally reversing the trend of decreasing RMR associated with the commodity monitoring mentality of old.

As an industry, we are finally in a position to trade the DVR for RMR. Yes, the time has come. Get on board, my friends, so you don’t get left behind.           


Article Topics
Business Management · Advisory Board Forum · Cloud-Based Services · Joe Nuccio · RMR · All Topics
Advisory Board Forum, Cloud-Based Services, Joe Nuccio, RMR


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