Why You Should Love RMR…Let’s Count the Ways

Recurring monthly revenue, or RMR, can do wonders for security integrators and others in the security sales channel. It brings both a bevy of both obvious and less-well-known benefits. These benefits complement and amplify each other, producing an avalanche of advantages. Here are the top 12:

1. Greater brand loyalty

A continuing relationship between service provider and client builds a common history and creates a track record of superior performance, making customers more faithful to the company and its services.

2. Richer data streams

Long-term customers provide a continuing source of data that can be analyzed over time for insights, efficiencies, and other benefits. For example, examining access events over time in an office building could result in more efficient staffing levels or resource consumption—such as water or elevator use—by season or other relevant time periods.

3. Better economic forecasting

The better a business is able to forecast its revenues, the more efficiently it can create a budget. A predictable revenue stream makes planning for major investments, new product development, or acquisitions less risky.

4. Reduced need to market or pursue new customers

It takes less money to retain current clients than it does to acquire new ones. By some estimates, it costs up to 12 times more. That’s an enormous financial burden as well as a significant opportunity cost. Instead of chasing clients, you can invest in new technology, staff, or markets.

5. Enhanced financial stability

Predictable revenue protects integrators from market downturns.

6. Better fundraising

A regular stream of income attracts lenders and investors, diminishing the need to aggressively pursue funding.

7. Higher valuations

Valuation experts agree that RMR can significantly increase a corporate valuation, which is important when a company wants to attract investors or buyers. RMR can increase a company’s valuation by up to ten times. Investors and buyers will pay more for a business with predictable revenue delivered by RMR. and they will invest or pay significantly more for it.

8. More customer add-ons

Excellent service opens up customers to upgrades of current offerings and addition of new or complementary products and services.

9. Increased customer retention

RMR creates a long-term relationship with customers. Companies can consistently check in with their customers, model excellent service, continually upgrade the customer experience, and overall create more touchpoints and stickiness.

10. Steadier cash flow

Especially in times of economic uncertainty, cash flow is critical. It ensures that you can pay staff, purchase goods or services, and otherwise meet day-to-day financial obligations. Regular, anticipated revenue relieves integrators of liquidity concerns.

11. Higher margins

For integrators, profit margins on hardware and software maintenance and support are often significantly greater than margins on the sale and installation of equipment. And while sale and installation are one-time expenses, maintenance and support provide a continuing stream of revenue.

12. Better growth planning

With accurate revenue forecasts, companies can measure their growth rates and plan recruitment, development, and expansion.

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