The changes in the systems integration industry over the last several years have been mind-boggling. But any consternation over what’s happening can, with a little imagination, be turned into new avenues of recurring monthly revenue (RMR).
It is not just the traditional systems integration industry that has been affected. Every low voltage discipline — from contractors who play in the residential sound space, to IT providers who focus on network controls and infrastructure — is facing dwindling hardware profit margins.
The good news for those who can realign their way of thinking is that there are more ways than ever to boost monthly cash flow. Whether you want to call it Internet as a service, security as a service, software as a service or something else, the bottom line is that services will set you apart.
From Boxes to Technology Service Provider
Having steady streams of RMR on the books is critical, and today they are not just coming from monitored accounts. Every system that an integrator installs has evolved from a plain box component to hardware that requires regular maintenance or can be extended beyond security.
Being able to provide proactive, preventative maintenance for anything that rides on the home network is a great way to boost RMR. That’s exactly what Henry Clifford, owner of Livewire LLC, Richmond, Va., found out. He realized that his home security and interactive services customers (he’s a Honeywell Total Connect and alarm.com dealer) wanted to be assured their networks were up and running and modems and other connectivity devices were humming away.
He began installing what he calls a “black box” from a manufacturer (ihiji) that enables him to remotely and proactively assess the customer’s network as well as the health and well-being of devices. The beauty of the offering is that it allows him to offer support and the ability to diagnose and assess the system’s network health remotely. The majority of problems are quick fixes that can be accomplished without a technician and a truck roll, which industry consultants peg at about $250 per dispatch on average.
Livewire’s service is branded as Invision, and Clifford gets on average $49 per month for the small piece of hardware which sits on the customer’s network and is cloud-based. The customer’s premises is provided with power surge strips which can be cycled from the web via the IP address.
Clifford says the company gets alerts on a dashboard and can fix problems before the customer even knows they exist. “That lets us change from a reactive to a proactive service provider,” he says. It also makes the customer stickier, he adds. Clifford and Livewire recently received a 2013 Best Practices Award in the RMR category at the 2013 CE Pro Summit for this residential integration/RMR approach.
Think Total Solutions Selling
What’s also important in the move to services and more RMR is a focus on total solutions selling. Customers today want business intelligence and additional data, and that’s what they can get with their connected devices.
Steven Paley, president and CEO of Rapid Security Solutions LLC in Sarasota, Fla., has been focusing on low-voltage connectivity services for customers. He recently began offering Internet communications, and will parlay that into additional interactive services. Paley recently morphed his traditional hourly service plan into a preventative care program, providing various levels of service for a monthly charge. He’s also toying with the idea of providing additional systems instruction courses to customers, although basic training is included in system installation. Rapid Security Solutions is ranked No. 13 on the 2014 listing of SD&I’s Fast50, ranking America’s fastest-growing systems integrators — read more about the Fast50 at www.securityinfowatch.com/sdifast50.
“It’s not just about the equipment, but what the equipment does for the customer,” Paley says. “It’s all about managed services.”