Every security integrator would like to wake up tomorrow and have a model based on healthy Recurring Monthly Revenue (RMR). Whether the goal is to sell the company, or to grow in a smart and predictable manner, RMR paves the way. So why isn’t every company moving to this model? The technology is there, the services are there, and the value to the client is there. So what’s the holdup?
The answer is somewhat simple: their sales teams are not selling RMR services. Nearly all of these salespeople have been developed to sell projects, not services. Everything from the compensation plan, to the quoting process, to the metrics have been set up for project-based sales. Salespeople were recruited and have been rewarded for selling $75k projects, not $3k/month managed services. They are masters at proposing the right solutions, and illustrating the technical benefits of the system to the IT and security departments — expecting them to naturally sell the value of a five-year maintenance agreement or shifting their security equipment from an operating expense item to a finance department one is somewhat unrealistic.
But don’t worry — you do not have to get rid of your sales team and start over; and you certainly do not have to give up the large projects that have built your company.
In working with dozens of security integrators as a sales management consultant, we have learned that there are four imperatives that they must tackle if they want to increase RMR sales. These four items focus on the salesperson, customer and manager, as all three entities are crucial in helping a project-based sales team add services to their monthly production.
1. Make the process easy and lucrative for your sales people.
The top reason that security integrators do not sell more recurring revenue services is that their salespeople don’t have to. When a traditional integration salesperson is deciding whether to add a maintenance agreement to a quote, or considering whether they should propose the hosted access control option, they are changing a routine that has worked for them for years. Unfortunately, many companies that expect a change in behavior do not modify their sales tools or compensation plans. Think about it — why would anyone change their routine if it adds to their workload and pays them less?
What’s the answer? When implementing our Growing RMR program, the first thing we do is assess the current process and tools. You need to identify the bottlenecks in the process and find out why your salespeople are not quoting more RMR services (they will tell you). Some of the common bottlenecks or obstacles include: quoting procedure takes too long to include services; CRM system not set up to track RMR activity; and the compensation plan pays too little on recurring services.
Action #1: Identify and fix the obstacles keeping the salespeople from selling these services. All you have to do is ask, and they will tell you what is broken.
2. Train your salespeople.
Although the solutions look very similar, selling the services that create RMR requires a completely different sales approach; however, we expect our salespeople to be able to make the shift effortlessly because they know how to sell access control, video, etc. Imagine hiring a new salesperson with no experience in the security industry. Would you expect them to be able to sell your security systems without training? Of course not. Asking a security salesperson who is accustomed to selling projects to immediately add services to their portfolio is a common and huge mistake.
What’s the answer? You guessed it: train your salespeople on how to sell these services. It is likely that you do not have the time to train your salespeople — which is ok, because your manufacturer partners may provide these services can help. At Vector Firm, we have a 10-session training source devoted solely to selling RMR. The bottom line is, there are options if you are willing to take advantage of them.
Action #2: Create and commit to a consistent RMR Sales Training Program. The bonus — most of the time, this level of detailed training will improve someone’s project-selling skills too!
3. Hold your sales people accountable to the right activities and metrics.
The top reason that security integration companies succeed at selling recurring revenue services is also very simple: their leaders stay involved. Whether it is the owner or sales manager (or both), the successful ones hold their salespeople accountable to the actions necessary to selling the RMR services, and they coach them through the process.
Regardless of the additional compensation or ease of selling these solutions, changing behavior is very difficult for any person. When your salespeople are in front of a customer by themselves, and have a choice of introducing change and possibly conflict, they will likely revert to simply discussing the traditional solutions; however, if they know that their leaders are holding them accountable and expecting them to introduce these changes, they will be more likely to take the necessary action.
What’s the answer? You likely have metrics on projects — even as simple as measuring outstanding quotes. Begin to measure metrics of activity that lead to sales of RMR services. Some examples could be outstanding RMR quotes, percentage of quotes including RMR services, or percentage of total sales that can be considered RMR.
Action #3: Decide on two or three metrics that lead to RMR sales; then calculate reasonable goals and begin to hold your sales team accountable to these goals.
4. Start teaching your customers now.
Just like you have sold projects and performed “break-fix” service, your customers have been budgeting for these projects and simply calling when something they need service. Regardless of the value that managed services, a maintenance agreement or any other RMR solution will bring to their organization, your customers are probably like the rest of us — reluctant to change. On top of their reluctance, they do not understand the value of these services. If your customers do not want to change and do not know the value of that change, you had better have a heck of a salesperson on staff to pull it off.
What’s the answer? Your customers are dying to be educated by their salespeople. Let’s bring this back to selling services that provide your company RMR — what if your salespeople methodically worked with your customers and prospects over the next several months and taught them about these services without “selling” to them? Every month, more and more companies are considering removing their security data from their network and having someone else manage it; then someone says, “why don’t we move this stuff to the cloud?” What if your sales team positioned your company as the experts in managed access control or hosted video? Who do you think would get the call?
Action #4: Pick a topic (e.g. remote health monitoring), and develop a curriculum to teach your customers about this topic for a six month period. One-to-one sales calls, webinars, e-newsletters, open house lunch and learns, etc… drive your lessons out to your customers in many different methods.
Develop a Plan
With these four key imperatives spelled out, it is time to develop a plan to accomplish each one. Whether you decide to develop a separate team or evolve your current one, these four items are necessary and will lift your organization.
The process will not be easy, but nothing worthwhile ever is; and it is likely that your competition is not making the effort. In future issues, I will discuss each of these imperatives in greater detail, now is the time to get started.
Set aside the time, make the commitment, and invest in the expert resources that will propel you past these obstacles. The goal of working in a business with a predictable RMR is worth the fight.
Chris Peterson is founder and president of Vector Firm (www.vectorfirm.com), a sales consulting and training company built specifically for the security industry.
