RMR: New Business Model & Opportunities
The concept of recurring monthly revenue (RMR) in the security industry has begun to shift over the last few years, as it once only referred to integrators monitoring and managing monthly contracts with end-users. Now, with the proliferation of cloud-based technology, its definition has changed to incorporate more than just a legal binding; companies are no longer just selling systems, they’re providing a service.
Recurring Monthly Revenue (RMR) FAQs
Can RMR systems be used in private environments such as homes, apartments, etc.?
While cloud-based services are ideal in property management companies for main doors, like in townhomes or apartments, it’s not a cost-effective option for private homes. SMBs are the ideal customers for this kind of solution.
How can integrators justify the cost over a traditional on-premise solution for end-user customers?
With on-premise solutions, there is a significant investment in both hardware and software equipment. This is good for the integrator of the project but doesn’t result in continuing revenue each month, which is what a cloud-based solution provides. End users that choose the on-premise solution also have the added burden of ensuring the equipment is up-to-date concerning security protocols and the latest firmware. They also tend to need an on-site IT team to help with these updates. This can be costly and prohibitive for many SMBs. Finally, the hardware of on-premise solutions must be updated over time. This further increases the financial burden. On the other hand, a cloud-based solution that facilitates automation is always up-to-date doesn’t require an IT team to ensure updates are made, and significantly reduces the upfront investment.
What are the benefits of RMR to an integrator?
Cloud-based services that bring in RMR provide integrators a steady flow of revenue each month. This is considered “passive income.” In a business that has traditionally been built on a “per project” basis, revenue that can be anticipated each month is a positive step toward being able to budget accordingly. Additionally, having continuous customers and building that relationship over time benefits the integrator by providing an ongoing opportunity to upsell more products and services.
Payment and Invoicing
How can the installer sell the concept if our customers can only pay in their local currency or cannot pay internationally?
As with any service-based contract that integrators, dealers, and installers have in place, services can be paid for in the currency accepted within that country or location. Many times, a company’s subscription tool or application has a gateway that manages different currencies, such as PayPal or Stripe. Integrators that are already set up to provide more service-based solutions typically have these tools in place, especially when offering alarm or central station monitoring.
How does the RMR pricing structure work, and how are integrators/end users invoiced for it?
For the integrator, the manufacturer (in this case, Vanderbilt) charges the installer or dealer directly monthly into the subscription tool or application. This includes the service fee, plus a minimal fee per device (if applicable at the discretion of each region). Integrators then can charge their customers based on frequency (monthly, quarterly, yearly, etc.) and can set their own prices for each device. In some cases, service providers may offer an annual discount for paying upfront. The main advantage is that each service provider has the opportunity to set their own billing protocols, whether they want to do an automatic payment or bill monthly for the service to the customer.
How can integrators, dealers, and installers bill the service to customers?
Many service providers that already offer alarm or central station monitoring have subscription-based tools and applications in place to help streamline the billing process on a monthly, quarterly, or annual basis. One challenge that smaller locksmiths have with transitioning to an RMR model is in the investment in these kinds of subscription services. Since the market seems to be trending in the direction of increased RMR opportunities, a lot of smaller integrators are investing in the software as a way to grow that side of their business.
Support and Service
What Vanderbilt tools are available to support installers when selling the concept to the end-user?
Vanderbilt has developed several “how-to” videos on YouTube and on the Vanderbilt website that are aimed at walking integrators through the process of explaining cloud-based services to end-user customers. Additionally, there are several online demonstrations on how to use the platform, set up the service, and test the functionality of the solution. There’s also the option of having the regional sales team go on-site to conduct training and support the sale of the services. Vanderbilt also produces several written materials, including sales sheets, datasheets, case studies, and online-based tutorials.
How is scheduled maintenance communicated?
Currently, updates and scheduled maintenance are communicated through e-newsletters, direct email messaging, and system notifications. It’s essential to communicate clearly and effectively when and how these updates are taking place. In the future, the Vanderbilt platforms will incorporate banners and update information directly within the dashboard to ensure updates are communicated to users.
Are there basic or “free” versions I can trial?
Potential partners or end users can see the program in action for both ACT365 and SPC Connect, or schedule a demo with the sales team. Vanderbilt also offers the ability to install an in-house system to control and demo for customers at a discounted test price rate.
Privacy and Security
What certificates and legalization documents are available/required for RMR solutions?
In Europe, Vanderbilt adheres to compliance with the European General Data Protection Regulation (GDPR), which focuses on protecting and managing personal data by accepted standards. Vanderbilt is committed to high standards of information security, privacy, and transparency. In the United States and Canada, UL compliance is encouraged to demonstrate product safety through rigid standards for manufactured systems and solutions.
What levels of security are in Vanderbilt system communications?
Data collected through Vanderbilt’s system communications are stored in the Microsoft Azure Datacenter in Dublin, Ireland, for Vanderbilt International, and in Virginia for the United States. Microsoft Azure meets a broad set of international and industry-specific compliance standards, such as ISO 27001, HIPAA, FedRAMP, SOC 1, and SOC 2, as well as country-specific standards like Australia IRAP, UK G-Cloud, and Singapore MTCS. Rigorous third-party audits, such as by the British Standards Institute, verify Azure’s adherence to the strict security controls these standards mandate.
Who has access to the data being collected through Vanderbilt RMR products?
Data access is strict. Vanderbilt engineers do not have default access to ACT365 databases. ACT365 databases can only be accessed from specific and approved IP addresses along with authentication passwords. Our engineers will only access the ACT365 database for legitimate technical support purposes and then only under Senior Engineer supervision.
Do RMR solutions comply with GDPR regulations?
Vanderbilt’s portfolio of security products is used to provide efficient and high-quality security. The company is committed to providing security systems that comply with customers’ GDPR obligations. Where Vanderbilt hosts cloud solutions, the company complies with the provisions of GDPR and the forthcoming regional data protection acts within the countries we conduct business. As such, Vanderbilt’s cloud-based RMR solutions, SPC Connect and ACT365, do store information on users of the system, and for these products, Vanderbilt is therefore considered the data controller or data processor. Specific policies surrounding GDPR compliance for Vanderbilt solutions ACT365 and SPC Connect are in place to govern the collection and use of such information. Vanderbilt Industries stores an individual’s data for as long as you are using the ACT365 service. If you decide to discontinue the ACT365 service, your data will be deleted from the Azure servers.
What are the key benefits of RMR and cloud-based services to an end-user?
There are several benefits to the end-user, including the reduction in an “all at once” investment of hardware and software. Instead, the bulk of the cost is spread out over monthly instalments. Other benefits include:
- Automatic updates and security fixes
- Ability to manage all multi-site locations from a single interface
- Reporting abilities for all sites
- Streamlined integration with video and back end systems to streamline processes, such as event management
- Video verification for visitors and employees
- Ability to link incidents with access control and video evidence for investigative purposes
- Continuous support from integrator, dealer, or installer partner
- Scalability and flexibility for adding video cameras, locations, door readers, and users
- Data security through tried and tested means
Contact us today!
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