Dan Jarnagin is the General Manager for Guardian Systems.
Like all security companies, we at Guardian Systems are always looking for ways to increase our RMR. When we were researching options, incorporating Honeywell Total Connect Services on every sale was the obvious choice.
Before we could do that, we knew we would have to approach the sale differently from selling hardware. We were excited about the LYNX Touch and the option for the Wi-Fi and Z-wave module. This would make it easier to start upselling services. We took “POTS” monitoring off the table and started offering Wi-Fi or cellular only. And that is when it hit me, we don’t sell security systems anymore: that just isn’t sexy. We sell lifestyle systems now! Today, the only monitoring options we offer are Internet or cellular and each includes Honeywell Total Connect in the price.
Lifestyle systems make customers “sticky customers”. When you give people the ability to check the weather from their keypad on the way out the door, or have their lights and temperature adjust to their desired settings by simply unlocking their door, you make using their system part of their daily routine. And when something becomes part of your daily routine and you come to depend on it, you have a harder time letting it go. Our goal is to make every customer a sticky customer. It’s a win-win situation. We get higher RMR by adding video and/or automation to accounts and those customers stay on long after their contract terms expire because we have incorporated the system into their lifestyle.
What to Charge?
Once we saw the direction we wanted to take, we had to decide how to price everything so that we could be competitive in our market without having a huge creation multiple. Every market is different so these are things you will have to experiment with and tweak a time or two. We decided to lead with Internet monitoring as a replacement standard for phone line monitoring.
You need to determine what is a competitive monitoring fee in your territory. Once you determine this figure, add $5.00 more for basic Honeywell Total Connect Services. Adding video or automation services? Add on another $5.00 per service. We also created “silver, gold, and platinum” video and automation packages that were priced just over our cost. Remember the goal is to cover your costs so that you don’t have a high creation multiple while remaining competitive in your market. The better you are at tightening that equation, the more of that extra RMR you will see impacting your bottom line.