Tuesday, January 1, 2008

It isn’t easy to ignore the klaxons sounding throughout the industry: Any integrator who’s anybody is working tirelessly to increase service revenue, that magic recurring monthly revenue, thereby magically turning piddling 25 percent gross margins into wonderfully profitable 40 percent gross margins that will allow for early retirement on a tropical island.
You’ve got that all sewn up by now, right? No?
Of course, adding that RMR can be easier said than done. While we hear industry analysts and manufacturers beating the drum for increased recurring revenue and the products that will help create it, many integrators are wondering just how to accomplish what they acknowledge as an admirable goal.
Just this week, I was speaking with Brian Sullivan, co-owner and general manager of PASS Security (see “PASS Educates the Educators,” page 18). We got to talking about video monitoring and remote guarding, and he asked a favor of me: “Give me a call if you find someone actually making money with virtual guarding.”
As you look to add new services, many of you are wondering the same things: How do I monetize this? What’s the ROI for adding the staff needed to accomplish this goal? Do I need to build my own central station? How much will that cost?
The larger integrators, those like Securitas Systems, Red Hawk, Stanley/HSM who spoke at Securing New Ground in November (see “Service is the Buzz of Securing New Ground,” page 8), have the resources to try new things, and, frankly, to make mistakes.
You smaller independent integrators out there have less wiggle room and need to get creative and use the help that’s out there.
PASS Security, for example, which does have a significant residential revenue stream and so capitalizes on the traditional alarm-generated RMR, has teamed with two other local integrators to open a central station that serves the accounts of all three and now has become a trusted third-party option for smaller dealers as well.
Have you thought about teaming up with a couple peers serving areas contiguous to yours so that you can split the cost of investing in recurring revenue?
Or maybe you’re an integrator who doesn’t want to play the alarm game. Your clients traditionally monitor their own systems with hired guards. Well, maybe you can save them some money and put more of it in your pocket by teaming with one of the new breed of central stations offering virtual guarding, like Integrator Support.
The solutions are out there. You just have to pick your head up and look for them.