[Vlog] Grow Your Security Business: Breaking Down the RMR Business Model

What does it take for a security business to grow in today’s environment of increased competition and staffing shortages? We get a lot of questions from security integrators about how to build a successful security business.

Watch John Szczygiel, Brivo’s chief operating officer and a 30+ year veteran of the security business, answer some of your most frequently asked questions about RMR:

  • Why you should care about RMR
  • The biggest obstacles to building an RMR business
  • How to get your salespeople to sell more subscription revenue
  • How long it takes to build an RMR business.

Video Transcript

[Nick] Why should I care about RMR?

I think the reason you should care about RMR is because your customers actually care about the services that are delivered. You may charge them on a monthly basis, and so for you it becomes recurring monthly revenue, but for them it’s really good and valuable services. They don’t have to think about their security system, they’ve outsourced the management and the operation of it, and for you there’s the happy benefit that you’re driving recurring monthly revenue.

[William] What are the hardest things about starting up an RMR business?

It depends on where you started from. If you are already selling alarm systems and you have subscriptions in the blood of your organization, then it’s probably a pretty easy transition for you. You already have billing systems, incentive plans, and the infrastructure in place.

If you come from selling mostly on-premise installations, it’s a little bit further for you, and you need to put a bunch of things in place in order to make your business successful. You need a sales team that understands the value of these services for your customers. You need the appropriate back end for accounting and support for billing and maintaining recurring services. It’s not impossible to do. It’s actually very simple to do. It’s just a matter of getting started and driving that portion of your business.

[Luke]: What kind of salespeople are best at selling subscriptions?

Great question. I’ll tell you what we’ve found at Brivo. There’s a generation of people who’ve grown up with subscription services and cloud services, and they’re just naturally oriented that way to sell services. They get the value, and
so I would suggest looking there first. Look for people who can communicate value of cloud and understand the value of services and paying over time versus buying something completely up front.

And then how you get them to do it? Well, it’s pretty simple. Look at your incentive plan. Salespeople read it, and they do what the incentive plan tells them to do. If your incentive plan tells them to sell more big projects, then that’s what they’re going to do. If your incentive plans tells them to sell subscription contracts on along-term basis, then that’s what they’re going to do. Sit down and do the math yourself. Figure out what somebody would earn on a one-time contract and what they would earn on a subscription. If the subscription isn’t more, then you’re telling them to go sell the one-time contract.

You really need to look hard at that plan and make sure it incentivizes the salespeople financially, because that’s what they’re trying to accomplish in their life. Make sure they’re incentivized financially just like you are for growing your recurring revenue business.

[John]: How long does it take to build an RMR business?

The way I think about this is it’s sort of like a par five on a golf course. When you start a par five hole, you can’t think about putting it in the cup. You’ve got to think about your first shot, your second shot, your third shot, and eventually getting on the green.

There’s a process that you have to go through to score well in golf on a par five. It’s similar in recurring revenue. You have to have several things in place. I talked earlier about the accounting systems, the billing systems, and the sales systems to be able to support that. We’ve seen people get started immediately and have an immediate impact. The good news about RMR is that you start making money from reader one, so it could be very short if you’ve got all the systems in place or could take you months or years if you don’t in order to properly build the structure, the discipline and the skill to be able to sell the service product versus just an on-prem installation product.