How Feasible is a Goal of 50% RMR?
IHS Research touts a goal of 50 percent recurring monthly revenue (RMR) for security integration companies in the next year. But is it possible?
What if a custom installation company 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).
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 Readership Study from Commercial Integrator sister publication CE Pro, 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.
Article Published By Jason Knott on Commercial Integrator, November 28, 2014
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