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How To Increase Your RMR

Oct 1, 2019 8:00:00 AM

If there is one saying that applies to almost any facet of life: there is always room to grow. Sure, your alarm company has a ton of subscribers, and offers great services, but are you sure you are maximizing your RMR? Recurring monthly revenue is the lifeblood of an alarm monitoring company. Monthly revenue analysis helps your company forecast what’s ahead in the future, and when your RMR is healthy, your company will grow and succeed. Don’t let your company leave money on the table. We’ve listed some tried-and-true tips on how your alarm center can increase its recurring monthly revenue.

Up Your Price

It seems too obvious to be good advice, doesn’t it? The more money your company charges for a service, the more money your company receives. Oddly enough, pricing is one topic that most companies don’t think about long enough before it’s set. Your services might be underpriced.

Try increasing your prices by 10% or 20% to start. There is the possibility you might experience some churn (loss of customers), but the overall increase in RMR will make up the difference. For example, let’s say you have 100 customers paying $100 a month for your services (100 x 100 = $10,000). If you raise your service price 20% to $120 a month, but you lose 10 customers your RMR increase to $10,800 (90 x 120 = $10,800). Even though you lose 10 customers, you increase your RMR by $800. Closely watch how customers respond to your company raising the price of service. If you lose too many customers, you might have raised your price too high. Finding the sweet spot is key. It might be the simplest solution to raise your RMR.

Reduce Attrition (Churn)

There will always be attrition in a recurring monthly revenue business model, but there are ways to minimize the amount of attrition (also called churn) from month to month or year to year.

Annual Contracts vs. Month to Month

Getting your customers to sign longer contracts is a great way to reduce attrition. When a customer can “set it and forget it” they are less likely to leave when it comes time for renewal. Annual contracts can also contain penalties for breaking the contract early. So, even if a customer decides to break a contract early, your company can still obtain the full amount of the contract.

Annual contracts also allow your alarm company to account for exactly the value of each contract. When a customer is month to month, you don’t know the value of the contract because it can be cancelled at any moment. It is much easier to evaluate RMR when you know the full life and price of each contract.

Implementing Customer Feedback

Customers want to feel valued. One of the best ways to show your customer base that you value them is to listen to them. Surveying your customers and applying their feedback is a great way to show them you are listening, and truly care about their feedback. If you show your customers that you are loyal to them, they will stay loyal to you.

Costco is a great example of a company that listens to its customers. They survey customers regularly to find out what customers want to see in store and implement those additions quickly. Costco also treats the employees well, which is another tip to increase RMR.

Keep Employees Happy

A happy employee will work harder for your company – plain and simple. Employees need to feel as though they are important, and that their job has meaning. Companies like Costco, Zappos, and Trader Joes are famously known for treating its employees well. This gives employees incentive to work harder for the customer, and when the customer is happy, your company sees a healthier bottom line.

Look To Sell Upmarket

Selling upmarket generally means looking for bigger clients, but you should also look to up-sell your current customers. Both have significant positive impact for RMR and can reduce your alarm companies churn rate.

Sell to Bigger Companies

When you sell to bigger companies, you can generally charge more for your service than smaller accounts. Selling to bigger companies will also lower your churn rate because bigger companies are far less likely to cancel accounts than smaller companies.

Don’t Forget About Current Customers

One of the most common mistakes for any alarm company when it comes to increasing recurring monthly revenue is forgetting that current customers are still potential customers.

Timing is a key factor when it comes to up-selling your current customers. Let’s say your alarm dealer just hit a company milestone for installs. Now would be a great time to sell them a better package for alarm monitoring services. Since there is more revenue coming in for the alarm dealer, there is more money to spend.

There is always room to grow. By increasing your price, reducing churn, and selling upmarket, your alarm monitoring company will be maximizing the opportunities to increase your RMR. AvantGuard offers top rate monitoring services that exceeds industry standards. Reach out to AvantGuard if your alarm company is looking for monitoring services to see what we can benefit your company.

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