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Service/Maintenance Contracts Are the Best Source of RMR

Service and maintenance agreements have become a leading weapon to fend off economic evils while helping security companies survive to grow another day. Discover their advantages and how to successfully integrate them into your business.

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[IMAGE]11977[/IMAGE]“Security overnight has become IT. And where the IT world turned around and became very profitable was recognizing the stuff people were buying had a lot of applications that made maintenance, software and support agreements important,” he says. “So in advanced security applications, it’s maintenance in the typical way of dispatching an engineer or technician but it’s also end-user support. IT professionals don’t want to have something on their network that isn’t properly updated and supported.”

Building a Kinship With Clients
In some cases, it may not be in a provider’s best interests to be retained by a client in a service and maintenance arrangement. While these contracts can often lead to a strong partnership, there is a difference between being counted on within reason as opposed to at the beck and call of an overly demanding client.

“There will always be those customers who use their security systems excessively based on habit, environment or abuse,” says Brady. “Keep track of those customers who require constant service as it may be better to switch them back to a time and material basis to avoid large losses under a contracted service RMR basis.”

On the other hand, sometimes having more interactions, or touches, with clients translates into even more revenue. Being intimately familiar with their systems, environment, applications, needs and expectations can prove advantageous in creating opportunities to sell upgrades, new products and additional services that improve the bottom line of both your company and that of your customer.

“The more you’re in touch with a client and keep them updated with what’s going on with their facility, be it their home or business, you’re always finding opportunities to help the client increase their level of security,” says Ladd. “It’s about knowing what systems are out there, knowing the capabilities and then giving the client the right system or upgrades so they can enhance their system — and many times, save them money.”

At the end of the day, it is to the greatest benefit of both your company and its clients to foster a true business partnership in which each party has a vested interest in the other. A service and maintenance contact helps bind that relationship together, and, oh by the way, it also simplifies administration and billing.

“Putting your customer base under a service agreement will reduce your billing and collection efforts on every $85 service call you used to work so hard to collect,” says Brady. “The customer will feel like the service you are providing is more encompassing and you will see better customer retention. In addition, under an RMR scenario you can price increase this service periodically as you do the monitoring side of your business.”

Editor-in-Chief Scott Goldfine has spent more than 12 years with SECURITY SALES & INTEGRATION. He can be reached at (704) 663-7125 or


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Article Topics
Business Management · Features · Managing Your Business · recurring revenue · RMR · Service and Maintenance Contracts · All Topics

About the Author
Scott Goldfine
Scott joined SECURITY SALES & INTEGRATION in October 1998 and has distinguished himself by producing award-winning, exemplary work. His editorial achievements have included blockbuster articles featuring major industry executives, such as Tyco Electronic Products Group Managing Director Gerry Head; Protection One President/CEO Richard Ginsburg; former Brink’s Home Security President/CEO Peter Michel; GE Interlogix President/CEO Ken Boyda; Bosch Security Systems President/CEO Peter Ribinski; and former SecurityLink President/CEO Jim Covert. Scott, who is an NTS Certified alarm technician, has become a respected and in-demand speaker at security industry events, including presentations at the Central Station Alarm Association (CSAA) Annual Meeting; California Alarm Association (CAA) Summer and Winter Conferences; PSA Security Network Conference; International Security Conference and Exhibition (ISC); and Security Industry Association (SIA) Forum. Scott often acts as an ambassador to mainstream media and is a participant in several industry associations. His previous experience as a cable-TV technician/installer and running his own audio company -- along with a lifelong fascination with electronics and computers -- prepared Scott well for his current position. Since graduating in 1986 with honors from California State University, Northridge with a degree in Radio-Television- Film, his professional endeavors have encompassed magazines, radio, TV, film, records, teletext, books, the Internet and more. In 2005, Scott captured the prestigious Western Publisher Maggie Award for Best Interview/Profile Trade for "9/11 Hero Tells Tale of Loses, Lessons," his October 2004 interview with former FDNY Commander Richard Picciotto, the last man to escape the Ground Zero destruction alive.
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Features, Managing Your Business, recurring revenue, RMR, Service and Maintenance Contracts