RMR Integrator Importance Statistics

Author: IPVM Team, Published on Jun 08, 2017

How do integrators feel about offering RMR / recurring revenue services? For many, their business revolves around RMR, while others see no benefit.

150+ integrators answered our survey on the importance of RMR to their business. We examine the trends and provide color commentary from their feedback in this report.

Here were the stats:

Inside, we examine the 8 main themes and the reasons provided by integrators.

The 5 main positive themes were:

  • Helps survive slow season
  • Increases a company's valuation
  • Maintains margins
  • Helps maintain ongoing relationships with customers
  • RMR opportunities will increase in the future

The 3 main negative themes were:

  • No value to commercial customers
  • Hard to sell surveillance RMR
  • Mainly for burglar alarms

Positive - Helps Survive Slow Season

The most common positive theme shared was that RMR helps surviving slow times, with comments such as:

  • "RMR is important to have consistent revenue. Easier to expand the business when you know that money will be coming in to help mitigate risk. RMR also helps keep things afloat during hard times."
  • "I feel RMR is vital to any company's success. It allows a company to sustain itself during slow times."
  • "We feel this is a vital offering. As construction and service are cyclical, you need a steady revenue stream to get you through the slow times. RMR is the model for a successful business."
  • "It's guaranteed recurring income that could get you through thin times."
  • "Recurring revenue can also help companies ride out tough/slow times."
  • "Extremely important. It helps maintain the revenue of the company during slower periods."
  • "We can 100% survive with full staff off of our RMR right now, we could literally stop installing and still be in business."

Positive - Increases A Company's Valuation

Many integrators hope that focusing on building RMR will allow them to command a higher price in the event that they decide to sell their company. Integrators with strong RMR can sell for 3+ times that of integrators with little RMR.

  • "Crucial to the value of the company"
  • "It maintains the value of your company. You can hedge your bets and back on that money to help future growth of your company."
  • "I want to increase my company value and allow for a steady cash flow into the future."
  • "Any company would like RMR, it adds value to the company,"
  • "These also add alot of value to a company, and we've seen plenty of alarm integrators specifically that base their business model on subscription monitoring and selling to a larger company once that base is built up."
  • "I'd probably be retired now if I'd put the same professional level of work into burglar alarms that I did into my surveillance/access control business which has minimal RMR and declining revenues."

Positive - Maintains Margin

Another positive theme shared was that RMR increases margins, allowing integrators to stay competitive with companies offering low-cost equipment.

  • "Lower margins on install and overall cost of equipment does not support an integrator efforts long term."
  • "I think it is a way to maintain a revenue while hardware price (cameras) go down."
  • "RMR is important because integration projects are turning into a race to the bottom. We are a high-end integrator that will not use companies like Hikvision, and we know we will lose certain projects because of it."
  • "Very.important since manufacturers are playing pricing games."
  • "We like the options it presents us with cost-conscious customers who are used to the cloud."
  • "I value an account where the install was $895, and I'm getting $60/month over a $10,000 deal with no RMR any day. I can't sell that $10,000 account, and they can go somewhere else. I believe the average lifespan of an RMR customer is about 8 years in the industry. Our company sees 15 years."

Positive- RMR Opportunities Will Increase In The Future

  • "Many integrators, even those who do not currently bring in much RMR revenue, are optimistic about the future of RMR."
  • "We just started making a larger push for RMR. As we established our Security practice we were more concerned about market share. Now that the practice is sustainable, we are focusing on RMR and maximizing the client experience and retain-ability."
  • "RMR is going to be the next big trend in the security industry. Now it has always been there in the alarm monitoring side of the business but now software platforms are going to start the transition to the subscription based model rather than pay one lump sum. Adobe has been the leader in this and have proven it works and customers want it. I have been against this until lately as personally I like the subscription model but didn't think this would work for our security industry."
  • "We are in the process of trying to move everything in our company to some form of RMR. This is were the industry and technology are going, Microsoft, Adobe, AutoDesk have all gone down this path. Lenel OnGuard as an Access Control System has been doing it for years and BluB0x was created based on RMR."
  • "Not that important as of yet, but it seems the options are growing and to offer them would only expand the company's customer base."

Positive- Helps Maintain Ongoing Relationships With Customers

Several integrators create sticky customers by using RMR offerings to maintain ongoing relationships. This builds customer loyalty, leading to future opportunities with existing customers.

  • "Helps keep customers sticky."
  • "Important to keep long time relation with the client."
  • "RMR allows us to keep a foot in the door with a customer and essentially lock them in."
  • "Its a very good thing to have RMR . for most clients for helping keep in touch with client base as well"

Negative - No Value To Commercial Customers

The most common negative theme shared was that commercial customers would prefer to make one-time expenditures and own their equipment rather than pay a recurring cost:

  • "In my experience very few clients go for it, but some love the idea that they aren't going to be nickle-and-dimed for something later if they can pay a flat monthly fee to cover certain services."
  • "Most customers do not want the added expense and will contact me if there is a problem."
  • "Business customers are more hesitant to pursue monthly recurring costs vs. residential."
  • "with many products it's not a clear cut advantage to the client. Yes, some customers want things in the cloud and will pay for that, but most are focused on security systems as a one-time purchase, with equipment that lives in house, that doesn't have a recurring fee associated with it."
  • "Not important. Most customer want to own and control their systems."

Negative - Hard To Sell Surveillance RMR

Some integrators complained that it was difficult to get customers interested in purchasing RMR for surveillance products:

  • "Love RMR, still trying to find the right way to present in the surveillance sector. We have several offerings, but have trouble selling them."
  • "I always offer it, but rarely does a customer want it."
  • "Love RMR, still trying to find the right way to present in the surveillance sector. We have several offerings, but have trouble selling them."
  • "I understand and appreciate the model but I am not sure it is a model we can always follow, as the RMR opportunity does not always present itself to us as an integrator."

Negative - Mainly For Burglar Alarm

Some integrators that focus on CCTV or access control see RMR as mainly applicable to burglar alarms:

  • "We have had RMR since 1982 for alarm systems. It's apart of life even though we are 60-75% video/access. Important but not to extend that some of competitors think it is."
  • "Selling burglar alarm systems at a loss to recoup it on RMR is a completely different business model than the integration business."
  • "For alarm motioning RMR is mandatory. For CCTV systems usually charge is part of maintenance costs, therefore RMR is not required."
  • "Sometimes, I feel the biggest mistake I made when I got into the business was not pursuing burg. I thought it was low end trunk slammer type business."
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