Recurring monthly revenue (RMR) is a dependable source of income that a business can count on receiving every single month from customers subscribing to services. This type of business model provides a sense of stability for one’s business, allowing for reliable planning and predictability of monthly cashflow and budgets.
The four main characteristics of a high-value RMR business model include high gross margins, low attrition rates, contracts, and diversification. In the security industry, a reliable source of RMR can potentially boost a company’s high gross margins from the industry average of 20-30 percent up to around 60 percent instead. These higher margins can help organizations accumulate the funds needed to diversify their options regarding the goods and services they provide, providing opportunities for other sources of revenue.
RMR also helps businesses maintain a lower attrition rate, meaning that they’ll lose customers at a lower rate than business models that do not have a recurring subscription from customers. Additionally, this steady source of monthly revenue can help businesses maintain longer-lasting contracts with their customers, which tend to hold more business value than shorter-term contracts.
So, with this being said, what makes proactive video monitoring (PVM) a reliable source of RMR? According to Bill Bozeman, former President and CEO of PSA Security, and current Netwatch Group Board Member, PVM has everything you need to build a high-value business.
“PVM allows for high margins; that’s a good thing,” said Bozeman. “Organizations need to diversify, and this offering allows them to diversify across all verticals, while Netwatch assists with the contracts.”
Bozeman also explained that PVM tends to have an extremely low attrition rate in the security industry.
To learn more about how PVM can make a high-value RMR business model, watch our discussion video on the subject here.