Playing by the Rules, or Metrics

Recurring Monthly Revenue, almost always referred as RMR, is probably the most important metric of any subscription business. It is what makes this business model so great. Once you acquire a new customer you have recurring revenue, which means you don’t have to worry about one-off sales every month. Different from traditional sales, it gives you new challenges such as retention and churn.

The general concept is that RMR is a measure of the predicable and recurring revenue components of your subscription business. It will typically exclude one-time and variable fees, but for month-to-month businesses it would include such items.

You might think that if you acquire more customers your RMR would grow, right? That’s true, but that’s not the only aspect to be considered on a subscription business model.

The metrics of tracking and reporting recurring monthly revenue is evolving. Okay, what isn’t evolving in this day and age? Our cover story is words of wisdom to the dealers, who need to embrace consistent account management practices and software powerful enough to get the necessary information.

Scott MacDougal spells it all out in the cover story when he writes about new metrics of tracking. The first thing he does as a professional is to have the dealer break down RMR. Powerful software makes this process a little easier, and there are several key ingredients to keep in mind while breaking down the numbers.

First of all, define what your RMR really might be. Look at how you code things in your system, and make sure you understand what has value. Not everything has value.

MacDougal also takes a refreshing look at the Counts vs. the Dollars. Dollars are most important but counts can be useful to help establish averages. Good software aimed at accounting methods can provide the dealer with a quick look at summaries and trends. Who wouldn’t want to know ahead of time the direction of accounting and trends?

To analyze RMR, you might want to consider three different aspects.

New RMR. This is the simply new revenue brought by brand new customers acquired. So let’s say you have acquired on a given month five new customers paying $100/month and two new customers paying $200/month. Your New MRR for that month would be $900.

Expansion RMR. Now imagine that you have three customers that upgrade their plans from $100/month to $200/month. That means you have expanded your revenue from existing customers, called Expansion RMR. Your Expansion MRR for that month would be $300. Keep in mind that Expansion RMR can come from upselling.

Churn MRR. You should also consider churn. Churn RMR is the revenue that has been lost from customers cancelling or downgrading their plans. So let’s say on a given month you had two cancellations of $100/month plans and other three customers downgraded their plans from $200/month to $100/month. You Churn MRR would be $500. It simply means that you’ll have minus $500 on recurring revenue for next month. Keep in mind that MRR churn is different from customer churn.

This article originally appeared in the March 2018 issue of Security Today.

About the Author

Ralph C. Jensen is the Publisher/Editor in chief of Security Today magazine.

Featured

  • Allegion, Comfort Technologies Implement Mobile Credentials at the Artisan Apartment Homes in Florida

    Artisan Apartment Homes, a luxury apartment complex in Dunedin, Florida, recently transitioned from mechanical keys to electronic locks and centralized system software with support from Allegion US, a leading provider of security solutions, technology and services, and Florida-based Comfort Technologies, which specializes in deploying multifamily access control, IoT devices and software management solutions. Read Now

  • Mall of America Deploys AI-Powered Analytics to Enhance Parking Intelligence

    Mall of America®, the largest shopping and entertainment complex in North America, announced an expansion of its ongoing partnership with Axis Communications to deploy cutting-edge car-counting video analytics across more than a dozen locations. With this expansion, Mall of America (MOA) has boosted operational efficiency, improved safety and security, and enabled more informed decision-making around employee scheduling and streamlining transportation for large events. Read Now

  • Security Industry Association Launches New “askSIA” AI Tool

    The Security Industry Association (SIA) has unveiled a brand-new SIA member benefit – askSIA, a conversational AI agent designed to help users get the most out of their SIA membership, easily access SIA resources and find the latest information on SIA’s training and courses, reports and publications, events, certification offerings and more. SIA members can easily find askSIA by visiting the SIA homepage or looking for the askSIA icon in the top left of webpages. Read Now

    • Industry Events
  • Industry Embraces Mobile Access, Biometrics and AI

    A combination of evolving workplace dynamics, technology innovation and new user expectations is changing how people enter and interact with physical spaces. Access control is at the heart of these changes. Combined with biometrics and AI, mobile access control has become increasingly crucial for deploying entry solutions that are seamless, secure and adaptive to user needs. Read Now

  • Sustainable Video Solution Delivered for Landmark City of London Office Development

    An advanced, end-to-end video solution from IDIS, with a focus on reducing waste and costs, has helped a major office development in the City of London align its security with sustainability objectives. Read Now

New Products

  • Mobile Safe Shield

    Mobile Safe Shield

    SafeWood Designs, Inc., a manufacturer of patented bullet resistant products, is excited to announce the launch of the Mobile Safe Shield. The Mobile Safe Shield is a moveable bullet resistant shield that provides protection in the event of an assailant and supplies cover in the event of an active shooter. With a heavy-duty steel frame, quality castor wheels, and bullet resistant core, the Mobile Safe Shield is a perfect addition to any guard station, security desks, courthouses, police stations, schools, office spaces and more. The Mobile Safe Shield is incredibly customizable. Bullet resistant materials are available in UL 752 Levels 1 through 8 and include glass, white board, tack board, veneer, and plastic laminate. Flexibility in bullet resistant materials allows for the Mobile Safe Shield to blend more with current interior décor for a seamless design aesthetic. Optional custom paint colors are also available for the steel frame.

  • ResponderLink

    ResponderLink

    Shooter Detection Systems (SDS), an Alarm.com company and a global leader in gunshot detection solutions, has introduced ResponderLink, a groundbreaking new 911 notification service for gunshot events. ResponderLink completes the circle from detection to 911 notification to first responder awareness, giving law enforcement enhanced situational intelligence they urgently need to save lives. Integrating SDS’s proven gunshot detection system with Noonlight’s SendPolice platform, ResponderLink is the first solution to automatically deliver real-time gunshot detection data to 911 call centers and first responders. When shots are detected, the 911 dispatching center, also known as the Public Safety Answering Point or PSAP, is contacted based on the gunfire location, enabling faster initiation of life-saving emergency protocols.

  • Unified VMS

    AxxonSoft introduces version 2.0 of the Axxon One VMS. The new release features integrations with various physical security systems, making Axxon One a unified VMS. Other enhancements include new AI video analytics and intelligent search functions, hardened cybersecurity, usability and performance improvements, and expanded cloud capabilities