Your RMR on steroids

Pump up growth by adding what’s hot, experts say, and also by focusing on what might not be
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Wednesday, May 29, 2013

YARMOUTH, Maine—Home automation and interactive services get most of the headlines when it comes to generating additional RMR, but alarm companies may be leaving money in the field if they’re overlooking more basic opportunities, experts told participants at a recent ESX webinar.

“Your RMR on Steroids: Expert Tips to Power Growth and Value” delved into newer technologies that hold the promise of a healthy return on investment. It also examined what companies can do to enhance the services they already offer and boost the profits from them.

Larry Folsom, president of American Video and Security, opened the session by detailing American’s approach to video verification, an RMR source that is gaining momentum but was “a little overwhelming” until the company broke it down.

“There were so many opportunities we had a hard time figuring out which way to go,” he said. “So we got very focused and put together some particular packages aimed at small systems, then we ultimately hired some small-systems folks. It’s a very interactive sale and it’s worked really well for us.”

Folsom said American has found that end users are interested in knowing what is happening in real time and they want to experience the system’s capabilities themselves. That has required a change in how the company markets its products.

“I’ve got a very traditional sales force, so guys were selling security, they were selling surveillance, and then the ‘oh, by the way’ was the fact that we could verify those alarms—put video in front of an operator, put video in the hands of the end user,” he said. “So it was a cultural shift.”

The other big focal point for RMR at American is something that isn’t new and doesn’t generate a lot of buzz: preventative maintenance. Folsom said the attach rate is very high and the program is easy to design.

“It’s a clean, inspect-and-test perspective. When we find something wrong we’re charging to fix it, but we go out on a quarterly basis,” he said. “We include it with every proposal that goes out and culturally it’s normal—‘We think that you would want to have this.’ … It’s the gift that keeps on giving.”

Folsom said the benefits can be explained to clients with an eyeglasses analogy: If you don’t clean your glasses, you won’t be able to see well.

“We see the world through preventative maintenance and include it with anything we sell that’s camera-oriented,” he said.

Another RMR opportunity that many companies might be missing is hosted video, according to Bob Ryan, senior vice president of sales and marketing for ASG Security. He said that what used to be a low-margin product sale is now a high-margin RMR service due to advances in technology.

“We’ve taken it from an analog DVR model to a cloud-hosted, subscription-based RMR service model for video,” he said. “This has done a lot for us as a company and I think the opportunity is that it could do a lot for a traditional security company. It’s not that difficult to grasp and make the turn.”

New technology aside, sometimes the key to more RMR can be simply getting the word out about what a company already offers, said Mike Miller, president of Moon Security Services.

“The issue for us is that we’re finding out people don’t know what the heck we do,” he told the webinar audience. “Some people will say, ‘I thought you just provided security or patrol and guard services,’ or ‘I didn’t realize you do video and fire systems.’ We’re recognizing that this is on us, we have to be more proactive.”

Kelly Bond, senior vice president of sales and marketing for Alarm Capital Alliance, also emphasized that point. Home automation and interactive services have created a new interest in security products, but the potential will be lost if companies are passive in their marketing.

“I can assure you that if you’re not marketing it somebody else is, whether it’s ADT through many advertising mediums or the local guy down the street,” Bond said. “The consumers are aware of these products and they want to know more about them. It creates an opportunity for a panel upgrade, a new contract and increased RMR.”