Creating Value for Security Integrators

  • By Monique Merhige
  • Aug 27, 2024

In recent years, we have seen an influx of security systems integrators getting on the recurring monthly revenue (RMR) bandwagon post-pandemic. During this time, the security industry has experienced a high demand for as-a-service offerings, not only from customers, but on the integration side.

Today, integrators are looking to build a seamless revenue stream one customer at a time and putting a stronger emphasis on long-term customer relationships. A company that can accurately predict its revenue year-after-year has the power to make the right decisions when it comes to future growth and expansion strategies.

Taking the business to the next level can be a seamless process when using the RMR model as security integrators are no longer just selling a system but providing a service to customers. The model requires integrators to put their focus on building long-term customer relationships, which changes the name of the game.

Integrators benefit from the RMR model with higher margins, accurate revenue predictions, a fixed monthly pricing model, and reduced operating expenses and upfront costs. Since RMR models rely on ongoing subscriptions or payments, the focus is not just on acquiring customers, but also retaining them for the long haul. This sounds too good to be true, but the model continues to prove itself as a powerful tool for integrators.

One experienced New York-based security systems integrator has implemented the RMR model into their business plan and is a prime example of how to do it right. SAS Technologies, a security systems integrator based in Hewlett, NY, has made RMR a major focus of their business strategy.

“With RMR the focus is not just on acquiring customers, but also on retaining them over the long term. Lower customer acquisitions costs (CAC) allow our business to focus on maximizing customer lifetime value (CLV) by investing in customer success, improving retention strategies, and enhancing overall customer experience,” said Sandra Rocha, president at SAS Technologies.

“I believe in the past, security integrators were slow to adapt to the RMR model, you only really saw it in alarm system sales, but now we are seeing many integrators that are starting to embrace it, along with our customers and end-users,” said Michael Troiani, integration engineer at SAS Technologies. “SAS has been in the integration space for more than 20 years and understands the ongoing challenges facing system integrators.”

Rising with Cloud-Based Solutions
With all the cloud service offerings that are now available, customers are more open to cloud-based solutions and subscriptions. For example, Google Gmail Suite has more than 1.8 billion users1, and has shown to be easy-to-use, secure, dependable and accessible. The same can be said for security solutions as customers want easy-to-use systems, especially when it comes to accessibility.

Accessibility ensures that the security system can be used by individuals who may not be tech-savvy. This promotes user adoption and ensures that all users can effectively use the system to enhance safety and security. An accessible system should incorporate features that enhance overall security measures, such as remote monitoring capabilities through mobile devices. This ensures that users can remotely monitor their security system and respond to alerts promptly from anywhere at any time.

While there are many advantages to the RMR model, there are also potential drawbacks. Some of the drawbacks include software updates and upgrades taking place without the end-user or the integrator being aware of it.

Also, when new features are available, it can lead to more demand for continuous customer and technical support. Additionally, recurring revenue models can lead to complex payment plans. While these drawbacks can seem challenging, adopting a recurring monthly revenue model can transform a business by providing stability, customer loyalty, growth support and enhancing overall financial health and sustainability.

“RMR allows businesses the opportunity to start every month/year with a known income/revenue. Recurring revenue provides financial strength to weather the notoriously unpredictable nature of project sales, which can evaporate completely in economic downturns,” Troiani said.

As we move forward, there will be more security integrators adopting the RMR model, as the benefits clearly outweigh the drawbacks. The ultimate objective at SAS Technologies, Rocha added, “is to build stable, long-lasting customer relationships. The RMR model provides this along with flexibility and the ability to provide ongoing value. But more importantly it differentiates us from competitors in the marketplace.”

As customer expectations are constantly rising, businesses must pivot from relying on one-time sales and less predictable revenue streams. By focusing on recurring revenue, integrators are building a more resilient and enduring business model. Ultimately, creating an endless revenue stream which is helping security integrators around the globe grow their businesses and confirm their existence in the long haul.

This article originally appeared in the September / October 2024 issue of Security Today.

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