Shopping Cart
Your Cart is Empty
There was an error with PayPalClick here to try again
CelebrateThank you for your business!You should be receiving an order confirmation from Paypal shortly.Exit Shopping Cart

John Sciacca Writes...

Features, Reviews and a Blog by John Sciacca

Random Thoughts (Blog)

Random Thoughts (Blog)

Installation Holy Grail: Recurring Revenue

Posted on November 13, 2013 at 12:05 AM

Our industry's Holy Grail seems to be developing some form of a recurring revenue stream. Far better than the one-and-done-and-on-to-the-next-one install we typically do, recurring revenue is like that mythical Golden Goose that just poops out stacks of money on a regular basis, while you sit back at your desk, feet up, sipping some Macallan 30 watching all those hundos rolling in and thinking of all the ways to spend it.

In reality, getting a boat ride on that revenue stream is far easier said than done, and many integrators wonder just how to get their hands on a Golden Ticket to set sail aboard the SS Easy Money. As much as we like the idea of the endless stream of checks flowing in every month, at the other side of that money pipeline is a customer writing a regular check and they are going to be expecting some value in return. (Unless you are just so good that you have customers writing you regular checks solely to keep your awesomeness on retainer in which case, I salute you, sir or madam! And I beg you…Please! Instruct me in your ways, oh Jedi Master!)

The security industry is the business model that most of us look to, as they have nailed down the concept of “pay a monthly/quarterly/annual fee for the monitoring of your system.” For the most part, once you have installed an alarm system, there is very little regular on-going maintenance required and a third party company handles the 24/7 monitoring and dispatch, meaning it really is a case of just sitting back and getting your share of the monthly pie. A small pie, to be sure, but I believe it was Confucius that wisely said, “One who takes many little bites from a lot of different pies will end up having a most large and satisfying meal.”

From the customer’s standpoint, they are generally happy to pay for the added piece of mind of knowing night-or-day, someone has a finger poised to summon the authorities if things go sideways, so monitoring is a win-win.

Several install companies have tried to kickstart the recurring revenue stream by offering maintenance contracts for the work that they do. On the surface, it sounds like the perfect integrator counterpart to the alarm monitoring model: you pay me a set fee monthly/quarterly/annually, and I’ll make sure that your system is up-and-running. And, I’ll be honest, this is something that we have kicked around at our company a few times over the years, but ultimately, we continue to abandon the idea and stick with per-call charges because we think that it makes the most sense and is the fairest for both us and the client.

Now, I’m going to tell you why I think that per-call charges work better for my company, and then I’d love for those of you that have maintenance contracts in place to tell me in the comments all of the reasons why they work for you and your clients and how you’ve overcome my objections.

Please click here to continue reading and then comment it out at Residential Systems...

Categories: November 2013, CTA, Rants