How to Build Your Average RMR With New Services
The name of the game is RMR, which of course stands for recurring monthly revenue. With this dependable revenue stream, many companies have weathered tough economic times and flourished when times were good again. The security industry knows this best of all.
What’s your average RMR per subscriber? Growth in average RMR has been taking place in recent years, and obviously is going to continue.
Let’s take a look at what has happened over the past few years; the numbers tell the story. Using the SDM 100 Reports for 2013 and 2017 and adjusting for those companies that did not report data, the average subscriber RMR reported for 2013 was $34.67. In last year’s 2017 SDM 100 Report (www.SDMmag.com/SDM100Report), the average RMR was $44.03, an impressive 27 percent increase over four years. Taking a look at seven of the top firms reporting, the averages are higher: $43.16 average RMR in 2013, and $50.10 in 2017 — a 16 percent increase in four years. Even adjusting for the inflation index of almost 6 percent over those four years, average RMR still increased 10 percent for this group.
Now what do these numbers tell us? First, average RMR is on an aggressive growth curve. That’s good news for the security industry where the bread-and-butter of income is RMR. Next, as expected, industry leaders are leading the charge with higher average RMR per subscriber. Take a look at their RMR offerings and see what to investigate for your firm.
So, what should you do? It’s simple. When it comes to RMR, know where things are with your company and lay out a strategy to grow your RMR offerings and revenues. Identify the types of RMR offered by your company, along with costs and fees charged for these services. Look at revenues and profit margins for each of these categories. Figure out your average RMR per subscriber and compare it with the industry numbers shared here. Evaluate your customer base, their selected services and any gaps in services, and consider promoting RMR offerings to fill them.
Once data about the past and present of RMR has been gathered, it’s time to look to the future. Convene thought leaders on your team, share and review insights gained from the RMR information on what’s happening at your company, and brainstorm on what it all means. Work to outline a future plan for RMR. Explore and evaluate potential RMR opportunities. Here are just a few proven services to consider if you aren’t already offering them: surveillance and remote video storage; home control; energy management; notification; and system status/remote power monitoring.
New RMR opportunities will always emerge and innovative concepts are continually evolving and appearing on the horizon. Here are some ideas to consider as you explore the future: network security and management; expanding mobile capabilities such as mobile panic and remote cancellation; and anomaly detection opportunities. In addition, learn more about pioneering RMR opportunities such as the new category of drop-off zones, leak detection with water shut-off, access control on-demand, space management during a fire, and aging in place. These topics will be explored in future installments of “Smart Insights” in SDM.
As you explore ideas and work on an RMR strategic plan, share your ideas. I would love to hear how this article helped in your planning. Please share what RMR offerings have been successful for your company and any new ideas being considered for RMR. In today’s world, we must work together and think outside the box.