Boosting RMR in the dealer world
- By Rob Phillips
- Jan 01, 2013
Life in the digital age has never been better. We’ve graduated from
rabbit ears to flat screens and 24-hour photo processing to instant
downloads. Laptops can fit into a purse as easily as a desk. Smartphones,
the descendants of those bulky 1980s carphones, now essentially
double as mini-computers.
Communication, transportation and relaxation are more convenient than
ever, and the security industry is bundling together all those comforts to aid a
vital necessity— the safety of customers and their property—through the use
of interactive services.
As leading vendors have developed and contracted this new technology,
dealers now can pitch security systems in unprecedented ways and take their
recurring revenue to new heights.
The New Wave
Just as the Internet has made the world seem smaller, interactive security services
can shrink the vulnerability people feel when they leave their families
and homes unoccupied, whether they’re just across town or stuck in a different
With a click on a compatible smartphone or tablet, they can remotely
arm and disarm their system, set arming reminders via text or email and create
no-show alerts if a family member—let’s say, their child returning from
school—did not disarm at a certain time. They can set specific codes for users
who have panel access, receive severe weather alerts and track the system’s
event history. It is like the customer never left the house.
Home automation is quickly catching on, too. Z-wave technology allows
homeowners to remotely manage their locks, draw their shades, adjust their
thermostats and switch their lights on or off to stay energy efficient. Vacationers
can even use the “Home Alone” technique, giving potential intruders the
appearance of a full house by scheduling lights in certain rooms to turn on
and off at specific times.
Video monitoring currently has less penetration, but it appears to be the
next step in upselling existing users. By placing HD cameras in and around
their homes, customers can take live look-ins at front-door visitors, locked
cabinets or baby cribs. Strategically-placed sensors also will snap photos of
motion and send pictures via email or text.
These developments have revolutionized the industry, and companies have
seen a particular boom over the last 18 months. More dealers have adopted
the technology and used it to support customers with superior service while
seeing their RMR rise considerably higher than they’ve been accustomed to
in the past.
The increase in interactive services has coincided with the gradual extinction
of telephone landlines. According to a 2012 report by the National Center
for Health Statistics, 34 percent of American homes now have cell-only service,
nearly double from the end of the decade. With some 165 million active smartphones
in the United States, security sales reps are covering fertile ground.
“The way our dealers approach consumers has changed over the past couple
of years,” said Travis Miller, senior manager of dealer development at Monitronics
International. “Opposed to using crime statistics, they’re focusing
more on building awareness of home automation and accessing your alarm
system remotely. It’s kind of turned the whole approach upside down. You’ve got more dealers today that are interested
in interactive services.”
RMR and Retention
How much more revenue might a
dealer rake in by offering interactive
services? It depends on the
dealer, how they go to market and
how much they’re willing to charge.
Dealer programs have varying policies
on rates, but a comfortable range
for these applications appears to be
around $50 per month.
Combine them with the two-way
voice feature on panels, the ability
for central station operators to directly
communicate with customers
during an alarm event and the total
package becomes even more profitable.
Miller’s company, Monitronics,
serves more than 800,000 customers
through its nationwide dealer network
and has become the industry
leader in two-way voice, in addition
to its interactive offerings.
Another benefit for dealers is initial
payment. Customers are willing
and able to put more money down
in an agreement for state-of-the-art
services. It’s a strong indicator for the
quality of an account and the likelihood
that it will remain with the
There also is an element of defense.
Dealers can protect themselves
against competitors and slam campaigns
simply by offering the most
“We’re giving everything to the
customer so that no other company
can come in and say, ‘We have this
and they don’t,’” said Curtis Kindred,
owner and president of Texas-based
American Defense Systems.
The Right Sell
As alarm systems increase in sophistication,
salespeople must refine
their pitch accordingly. Gone are the
days of flipbooks and generic doorto-
door tactics; reps must provide an
exciting visual and interactive presentation
that engages the potential
customer. The millennial generation
is likely more tech savvy, but older
prospects need a clearer demonstration
of the system’s many capabilities.
For this reason, some dealers
invest in tablets for their reps. It’s a
long-term approach. Though more
costly in the short-term, a couple of
sales will quickly cover the increased
Product expertise is an obvious
requirement. Dealers can seek out
local vendor representatives for inperson
or over-the-phone training,
and dealer programs typically provide
The key, sales experts say, is driving
home the day-to-day value of the
new services to customers. Rather
than manually setting their alarm
once or twice a day, they now can
manage their system anywhere, at
any time, and in turn, enjoy greater
peace of mind.
The logic is simple: The more a
customer uses their panel, the more
loyal they will be.
“From an attrition standpoint, a
customer is less likely to discontinue
their service or feel like their system
is not as valuable if they’re using it
every day,” Miller said. “They have
access to it at their fingertips on their
phone or their tablet.”
At their fingertips. It’s a brave new
course for the industry, and a lucrative
opportunity for its dealers.
This article originally appeared in the January 2013 issue of Security Today.