2019 Recurring Revenue Report: RMR Growth Continues to Rise
There are several compelling reasons for security dealers and integrators to sell recurring revenue-based products and services. Among them is 23% growth last year and 15% projected for 2019.
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Imagine making money while you’re sleeping. Granted some people can seem as if they’re sleepwalking through their workday, but that’s an entirely different matter.
While salespeople, managers, owners and investors of many professional installing security systems providers continue to count sheep at night, those of companies that build a book of recurring monthly revenue (RMR) accounts are instead likely counting their steady cash flow. Consider this a wakeup call as security contractors snoozing on RMR could indeed lose.
RMR (a.k.a. passive income) is not only the gift that keeps giving in terms of generating a continuous stream of revenue that allows firms to earn money round the clock, but it also delivers a multitude of other business benefits.
RMR-based accounts boost a company’s equity and in doing so convey the type of straight-ahead value that investors and the financial community are accustomed to and seek out.
Additionally, conventional wisdom dictates that those customers represent the ongoing opportunity to upsell more products and services, allowing deeper, “stickier” long-term relationships to take root.
Engendering that kind of loyalty fuels positive word-of-mouth and referrals too can create a groundswell of exponential growth.
Furthermore, those qualities can help a security firm access more favorable lines of credit and fetch a more substantial multiple if the business is eventually placed on the market to be sold.
The recognition of all those perks combined with greater customer desire to exploit newer technologies in the name of heightened efficiencies, effectiveness and convenience in both the home and the workplace — in concert with manufacturers stepping to the plate with evermore software-based, “as-a-service”-style solutions — have coalesced into a “perfect storm” of transformative opportunity for security dealer and integrator enterprises.
Developments in open platform, interoperable smart homes, automated buildings and both the Internet of Things (IoT) and Industrial Internet of Things (IIoT) are further imploring the industry to embrace recurring revenue models.
With RMR becoming so central to security business, it’s no wonder SSI publishes a wealth of material on the subject. However, it was just a year ago that the publication sought to augment the written word with empirical market data — thus the Recurring Revenue Report was founded.
Initial surveys can be eye-opening but the real payoff is when the process is repeated to allow for comparisons, further analysis and the gleaning of trends.
Forge ahead to answer questions that include the extent RMR is driving the electronic security industry’s direction in 2019; how much is being made by those focused on RMR; growth percentages; how RMR is affecting the industry’s technology sectors; and which residential and commercial devices, systems and services are best lending themselves to the RMR model.
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