×

CHANGING YOUR BUSINESS MODEL FOR RMR


Robin Courtenay, Director at SMC, the London-based home integration firm, offers advice for companies seeking to generate recurring monthly revenue (RMR) from service and maintenance.

 

RMR is a hot topic for home technology integrators. It’s easy to see why.

 

Anyone on the sharp end can appreciate the substantial cash-flow advantages for a contracting business in building a regular, steady stream of income. If the cash-flow is smoother and more predictable, then planning, running and investing in any operation becomes much more straightforward; unforeseen expenses can be accommodated more easily and, when times are tough, the regular income can help sustain the business and keep it in decent shape for when the good times do return.

 

It would also be fair to say that, as an industry, we’ve been guilty of giving our expertise away for far too long. Just because AV is fun and exciting, and we’re all passionate about the technology we work with and the enjoyment that we can bring to our clients, doesn’t mean that we should work for free. It’s a great discipline for any business to count up the hours spent in the design, installation and servicing of a project to work out which of those hours, the client has actually paid for. Just because we’re in AV, none of us should feel guilty about our companies making a profit.

 

At a time, when margins on equipment sales are getting tighter by the day and when DIY solutions are chipping away at our sector from below, it’s important that we operate and distinguish ourselves as a proper profession. We need to recognise the value of the services that we provide and charge for those services accordingly. A significant part of that value most definitely resides in service and maintenance.

 

Arguably, the convergence of AV and IT is making it easier than ever to deliver effective managed service and maintenance programmes for clients. Products and services on the market today allow us to provide remote management with platforms that can monitor, manage, and fully maintain multiple, integrated networks from anywhere in the world. Automatic device discovery and auto-mapping features can minimise the time it takes to set-up and configure a system. Above all, many of these remote monitoring systems mean that we can identify problems and potential system issues, enabling us to power cycle equipment and resolve matters, even before the client is aware of them, and without having to send an engineer to site.  

 

While these technologies can definitely help make our lives easier, it’s important not to underestimate how service and maintenance changes the business model for CI companies. Service and maintenance cost the business time and resource. As a result, it needs to be accounted for and properly planned into the business. 

 

My advice would be to start small in what you offer, build your reputation and scale your business accordingly. For example, you could begin with a service offering that covers office hours systems support for clients, make sure you meet your customers’ expectations and then build from there, so that you can invest in additional service team resources, as and when your RMR business grows.

 

To ensure your service and maintenance business is as efficient as possible, it needs to be designed into a project from the very beginning not sold as an afterthought to the client. Be up front with your customer about the benefits that aftercare can bring. Make them aware that technology will from time to time need updating, upgrading or may simply develop a fault and need to be replaced or repaired. Explain to them the importance of deploying as much equipment as possible that will enable remote monitoring and power cycling. Less downtime, fewer equipment failures and fewer emergency call outs are benefits that all clients can appreciate.

 

I’d also say that applying this discipline in the design stage on a project will, in itself, help you deliver better, more robust and reliable systems for your clients. Here is another major benefit of adding an effective service and maintenance arm to your business – a stronger, better and long-lasting relationship with your client. Something that’s every bit as important to the health and prosperity of your business as RMR.