CE Pro has been preaching the benefits of RMR for a long time now. It helps generate an additional revenue stream for your business; it can keep your company afloat during rough economic times; it enables many more touchpoints with your clients to elevate the post-installation customer service experience; those touchpoints can create potential upsell opportunities; and RMR is a multiplier when it’s time to sell your business.
These days, RMR opportunities present themselves in a variety of ways — service contracts, network management, energy and power management, remote diagnostics and troubleshooting, video surveillance and alarm monitoring, entertainment content curation, cybersecurity, and others. You probably saw plenty of examples at the CEDIA Expo and Commercial Integrator Expo (CIX) being staged at the Colorado Convention Center in Denver this month.
Of course, service contracts are the most common method most CE pros use to earn the extra revenue. Whether they collect monthly or annually, many integrators set up tiers that offer varying degrees of service call response time, equipment and solutions covered, exchange programs for upgrades, and more.
“Those service contracts I think are vitally important to the overall health of our customers. When you look at the security side of our business, which is highly tied to monitoring and lots of heavy RMR, there’s a ton of upside from a service perspective in the commercial AV side of things,” says Cynthia Menna, general manager of Pro AV at distributor ADI Global.
“As well, as understanding how to create a contract, how to write a contract — making sure that you don’t over-commit, that you don’t give a 4-hour window of being on site, when, in fact, it might be 24 hours. So, being very realistic about what you and your business can support from a support perspective and what areas you want to support.”
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Despite all the opportunities for gaining RMR, the custom integration industry is still catching up after all these years and pales in comparison to the security industry. Of the CE Pro 100 members, who are among the highest-revenue and most profitable dealers, security giants ADT and Guardian Protection — respectively Nos. 1 and 2 in the rankings — skew the numbers. Overall, however, just 14 out of 100 earn 10% or more of their revenues via RMR. The ones who have added it tend to be bullish on RMR, but may echo the caveat from Menna about not over-committing.
“We’re not an alarm company but we’ve been diehard into RMR for probably 11 years now,” Total Home Technologies’ Keith Harrison said on the recent monthly CE Pro VIPeer-2-Peer call. Harrison has a unique RMR strategy that CE Pro has covered — they lease equipment to the homeowners. “It represents probably 35% of our annual income.”
He also points out research that has found homeowners have a quickly declining disenchantment with their systems within the first five years of ownership. Plus, when it comes to installing technology that sees rapid advancements such as Wi-Fi networking, there’s a possibility that systems can be hindered but it gets delicate going back to a customer if they’re not on a service plan.
“If you’ve done a big badass Wi-Fi system for a customer a year-and-a-half ago, it might be Wi-Fi 5, maybe Wi-Fi 6, and most of us wouldn’t have the courage — myself included — to call that customer up and say, ‘Hey, you know that $25K you spent for Wi-Fi? Well that’s Wi-Fi 5 and now we’re on Wi-Fi 6, 6e, and 7, so you’re three versions behind in the year-and-a-half that you purchased the system, how would you like to give us another $25K?’”
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