The secret to RMR success

Dealers talk about the gold mine that commercial business represents in this ongoing series
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Wednesday, February 26, 2020

YARMOUTH, Maine—This article is part of an ongoing series on recurring monthly revenue (RMR) opportunities within commercial security, including how security dealers are making the transition from residential to commercial security.

Part one features security dealer Trinity Wiring and Security Solutions, a company that has had incredible success transitioning from a mostly residential security company to one that is seeing tremendous growth in RMR on the commercial side of the business.

The company, now in its 18th year, focused for the first 15 years primarily on the residential side of its market, which consists of Virginia, Washington D.C. and Maryland.

“The transition to commercial has been awesome,” Trinity Wiring and Security President and Owner Brendan F. Armstrong, Sr. told Security Systems News. “We saw commercial, which accounted for approximately 15 percent of our total revenue in 2018, jump to just to about 30 percent in 2019. And we anticipate that same continued growth and more balanced revenue contribution. We are still going to focus on growing our residential and builder business but we see tremendous growth opportunities on the commercial side.”

Armstrong said that the company’s strong reputation within the residential market made the transition to the commercial side easier. With more than 70 total employees, the family run business includes three of Armstrong’s sons, Brendan, Patrick and Liam, who have helped to build on a strong company culture that focuses on customer service.

Alarm.com, Trinity’s partner on the residential side, also helped make the transition easier. “Alarm.com has a commercial access control platform, which works very well and there is tremendous customer satisfaction when using their app,” Armstrong said. “In addition to their training and their products, it’s allowed us to participate up against some of the titans in the access control space.”

Brian Lohse, GM, Alarm.com for Business, noted that he is seeing many residential dealers like Trinity find traction in the commercial space.

“Many of our partners are mirroring the business model they used to grow their residential business — focusing on RMR, an unparalleled user experience and service delivery efficiencies of repeatable systems — to grow their commercial program,” he explained. “Some are combining modern security, video and access control together as a single app solution with a simple bundle pricing structure. Cross-selling between homes and business also makes sense, since every business owner has a home and often wants to manage them both from one app. It is a nice opportunity to create sticky customers.”

Armstrong pointed out that the RMR boost from the commercial side of the business alone has been phenomenal.

“We continue to grow RMR on the commercial side,” he said. “Incrementally, that new commercial RMR in 2019 was as high as 50-50, so we are now generating as much RMR from our start-up commercial entity as we are on our entire builder and residential side. Whether it is access control, video or security, or if we are doing any AV work, we are looking at an RMR-based service agreement to support the project or initiative long-term.”

Lohse noted that Alarm.com works with dealers to help them identify the ample opportunities for RMR within an office and business environment, including the top three he identified as user management; heating and cooling; and access control.

“Complicated legacy access and alarm systems often cause companies to designate and train a user management expert or outsource the work altogether at significant cost,” he explained. “Temperature control in offices that are vacant during evenings and weekends is critical to managing energy expenses. Many offices also have entrances that always remain locked, requiring someone to let in guests or deliveries, especially during off-hours.”

He added that traditionally residential security providers are now providing solutions to these problems on the commercial side with the Alarm.com for Business platform. “Their customers get a modern system with a simple interface that requires no training, can be managed remotely using a mobile device and automates or sets controls for numerous functions that other systems typically require someone to be onsite,” he noted. “All these offer RMR opportunities for a dealer or integrator and provide clear value and ROI for their customers.”

Armstrong said the commercial demand is so great that the company has added additional resources on both the sales and business development side of the house, while training and getting its integrator and service team for the commercial work up to speed.

“So we are anticipating continued double-digit growth in 2020 and beyond,” he said. “Revenue was up 16 percent from 2018 to 2019 and profit margin was up 30 percent. We are about bringing on incremental revenue, which drives higher profit-margin percentage. Moving into the commercial space has allowed us to do that.”