“I want to know when a client’s home needs service before they do. System monitoring gives us immediate knowledge of a component failure and in some cases the ability to fix the problem remotely. This is a significant advance in a business where service is everything.”
Ken Johnson, President of Premiere Systems
CEPro-5 Recurring Revenue Opportunities for Installers
Service contracts, remote diagnostics, alarm monitoring, MDU support and communication services offer income streams.
In tough economic times, it's more crucial than ever for you to have more than one stream of income.
With even perennial CE Pro 100 integrators like Baumeister Electronic Architects going out of business because of cash flow problems, you need to ensure you have money constantly coming in.
Recurring revenue opportunities are available, and you should be taking advantage of them.
Here are five recurring revenue opportunities for installers.
Remote Diagnostics
Remote access to your clients' systems is an up-and-coming way to offer continuing customer service, save time by diagnosing and fixing problems without sending out a tech, and make a steady revenue stream.
One company, Atomoo, provides managed services by installing software on your customers' products — giving you a 24/7 service model.
So not only are you bringing in extra money every month, but you're cutting your overheard costs and saving plenty of time — and money — solving problems without leaving your office.
Service Contracts
With margins on products shrinking every day, shifting your business from selling gear to selling your expertise is a must.
As Vaughn Petraglia put it, "We're still expected to provide a sophisticated, reliable system with top quality, long-term support."
Service contracts earn Scottsdale, Ariz.-based Creative Sound & Integration 5 percent to 12 percent of total project costs.
If you're looking to roll out service contracts, here are ten tips to get started.
Alarm Monitoring
The security industry has always focused on recurring revenues, so much that monitoring fees make up 75 percent of residential alarm revenues.
Wayne Alarm Systems, a Lynn, Mass.-based integrator and security professional, focuses on recurring revenues like monitoring as the base of their business model.
For an industry that may be recession-proof, adding alarm monitoring to your lineup could be a great decision in this economy.
Dedicated Support for MDUs
When you're working in a large residential building with many customers, like an MDU, having a support person on-hand at all times could do wonders.
AMX, for example, says that integrators working with MDUs should offer full-time on-site service.
"It is inevitable that unit owners will encounter problems with technology in their unit from time to time and being able to provide at least one dedicated employee who is staffed on-site to address issues as they arise is not only more efficient for the integrator, but it provides a source of recurring revenue," says Charlie Cash, AMX's residential business unit manager.
By making deals with homeowner/condo associations in MDUs, you can set up maintenance agreements to provide recurring services -- and make money, too.
Monthly Fees for Communication Services
Installing communication services, like Internet, cable and phone, can provide a consistent revenue stream.
By partnering with a service provider, you may be able to get a cut of the customer's payment each month. For services like VoIP, it's not even about the hardware — it's about the recurring revenue.
"If you're selling Cisco CallManager, your client also needs to buy data access and a calling plan," John Marcario, president of Savatar, a strategy and technology consultancy in Boston, told CE Pro.
"[Clients] are not just buying a PBX, they're buying the voice and data infrastructure. If I'm a VAR [value-added reseller] and I'm just selling a PBX, I just left a whole lot of money sitting on the table."