Session Highlight: Powerful Ways to Grow RMR by Exploring New Opportunities
As the COVID-19 pandemic overtook the nation, nonessential work was put on hold, and customers became anxious about budgets, many security installers and integrators saw their businesses suffer. But those whose customers were contracted for subscription-based services weren’t as concerned – their Recurring Monthly Revenue (RMR) helped them weather the COVID storm.
In an ESX Virtual Education Session, Preventia Owner Aaron Whitaker and the president of LOUD Security Systems, John Loud, shared their experiences with RMR business models and how to get employees and customers on board.
Even if you can’t provide these services yourself, Loud said, you can partner with companies that do. Manage the billing and relationships and sell it to your customers as a customer service add-on.
Opportunities for RMR:
- Cloud access
- Water detection and shutoff
- Monitored smoke detector
- Life safety facility mangement
- Sprinkler systems / hood systems
- Guard dispatch
- Ankle bracelet monitoring
- Environmental monitoring (gas, water)
- Bank panic buttons
Creating a Solution that Leads to RMR
“The long-term gain is that RMR that creates equity and stability in the company,” Whitaker said. As such, Preventia has designed their entire business around RMR. “We first look for what problem we are solving and see how we can make the customer happy while creating a solution that leads to RMR,” Whitaker explained. This is not only for the benefit of the business, but for the benefit of the customer as well, since security customers are increasingly asking for integrations. Whether it be smart home and video solutions, cloud video, or cloud access control, customers place huge value on being able to manage everything in one app. Subscription-based services are a draw for them. Because there are free options on the market for the aforementioned solutions, “Integrators have to drive value around these solutions and charge customers for it monthly,” Whitaker noted.
Engaging Your Advocates
On the commercial side, your biggest advocates for a security subscription are likely to be in the IT department. “We engage with IT as soon as possible,” Whitaker said. “IT values time: if it saves them time, they will pay money for it. Get on the IT budget.”
Get comfortable having conversations with IT and “Be prepared to go beyond security,” Whitaker advised. Instead of just talking about the usual benefits of keeping a business secure, bring up the value of a cloud-based, integrated system. Owners and managers can make sure employees are getting to work on time and that things are running smoothly. One restaurant owner Whitaker cited loved that he could log in remotely to make sure the restaurant looked great and check that orders were going out in a timely manner.
Getting Your Team on Board
When you’re simply installing equipment, you’re making one sale. But when you’re adding security as a service, you’re doubling that sale. Take a look at how you’re compensating your sales team, Whitaker recommended. “Any good sales rep will work to maximize the compensation plan they have. Are you rewarding the equipment and installation more than the RMR?” Preventia has shifted their compensation plans so sales reps get more money for selling RMR. Loud added, “Think of how you can turn your commercial sales team into an opex rather than a capex.”
When you migrate to an RMR model, management and leadership need to be built out accordingly to support the growth. “If you’re asking someone to pay you monthly, they’re expecting service on the backend,” Whitaker said.
Loud commented on how RMR has changed his hiring and training processes. “Everything we look at in the hiring process is about customer care. I realized early on that I need folks who are customer-focused first, then we can easily train them how to install.”
RMR reduces customer attrition because your relationship become more valuable to them and also stickier – it’s harder for customers to disengage if you’re providing multiple services. Loud, all of whose residential clients are on an RMR model, encouraged companies to start with their existing customers. “Go back to your base,” he said. “They trust, know, and like you, and they are paying you already.” He also suggested that companies that are providing subscriptions increase their rates regularly, and that they consider getting into access control if they aren’t there already, since it has “a lot of opportunity for RMR.”
Though selling on an RMR model may feel unfamiliar at first, looking for opportunities to add subscription services benefits your customers as well as your business. They will enjoy the convenience of having a one-stop-shop for their security and security-related needs, as well as only having to manage one monthly bill for those services. Your business will become financially stronger in the process, helping you more effectively manage any uncertainty in the years to come.