By Rory Russell
With the security industry rapidly transitioning to incorporate advanced technology and home automation elements, productive new ways to generate recurring monthly revenue have arisen for alarm companies. By offering service upgrades and add-ons related to the Internet of Things, security system providers can increase their profits and business value, all while providing in-demand services to their customers.
What is the Internet of Things?
Essentially, the Internet of Things (IoT) represents the idea that many devices, systems and services we use in our daily lives are now connected to the Internet. Everything from thermostats to exercise routines can be adjusted or tracked through the use of smart technology. Most of the products that surround us – from phones to cars to washers and dryers – incorporate some type of smart technological element to make our lives easier and more convenient.
Technology is advancing rapidly and consumers are no longer simply accepting the high level of connectivity associated with the Internet of Things – they are expecting it.
As a result, consumers are shifting more and more away from traditional alarm systems and towards home automation, defined by the Consumer Electronics Association (CEA) as “technology that allows users to remotely monitor and control one or more systems in their home including security, lighting, heating and air conditioning, audio/video, intercom, energy and irrigation (sprinkler system).” Safety and security features are key elements that consumers choose to incorporate into their home automation systems, and alarm companies are developing and integrating the necessary technology to enable consumers to do so.
While accommodating the Internet of Things poses a challenge for alarm and security system companies, it also presents an opportunity for increasing revenue. Businesses that sell traditional alarm systems have the opportunity to incorporate additional services related to IoT that can help them to drive up their recurring monthly revenue.
As more and more elements of the average consumer’s home become automated, security system providers can help homeowners manage it all. Additionally, as these technologies become increasingly popular, many consumers will expect remote control and monitoring capabilities to be included with any security system they purchase.
Outside the realm of residential security, there are other opportunities for generating RMR with the Internet of Things. Expanding into commercial security can be a great way to increase your company’s recurring monthly revenue. If you’re a security business that has not yet explored the commercial realm, now may be the time to start exploring the chance for growth and new sources of RMR in that area. You can learn more about pursuing commercial security RMR here.
By providing these additional monthly services to clients, alarm companies can increase recurring monthly revenue (RMR) by augmenting the new profits and bolstering the overall value of the business.
If you own a security alarm business, take a moment to consider your current position in the industry. Do you have the resources, knowledge and desire to take your business in this new, technologically advanced direction? Can you incorporate service upgrades related to the Internet of Things into your current offerings to drive RMR, add value to your company and keep up with your competitors?
The answers to these questions will have a direct impact on the sustainability of your business moving forward.
ABOUT THE AUTHOR
For more than 20 years, Rory Russell has been president and owner of Acquisition & Funding Services (AFS). As a top alarm company broker, he specializes in mergers, acquisitions, and financing for fire alarm companies, security companies, integration companies – representing over a billion dollars in transactions. Prio to founding AFS, Rory Russell owned and operated Empire Security, at the time the largest regional security company in the Northeast, handling $5 million per year in sales and installations.