One of the more common questions I'm asked is whether equipment discounts/subsidies should be applied as an incentive to sell more paid monitoring/service plans and collect RMR.
While equipment incentives can be done effectively, they should be approached with caution given the lack of data to support the ROI.
Giving away too much is not only unnecessary, but also exposes you to undue risk. There are more effective ways to incentivize your clients which don’t require you to give anything away.
Here are some general guidelines you should consider when crafting your RMR incentive program.
Equipment Incentives: The Right Way and the Wrong Way
When calculating the lifetime value of an RMR contract, equipment incentives might seem like a great way to help close the deal.
For example, I often get asked if the cost of remote systems management (RSM) hardware should be subsidized by the associated RMR plan. In the vast majority of cases, I say no.
Subsidizing the cost of RSM hardware has a negative effect on cash flow and without an annual agreement in place, there is no guarantee that the client won’t cancel a few months in before the investment has paid off.
With that said, equipment incentives can be done in a way that sweetens the deal for the end user while not leaving the integrator exposed to unnecessary risk.
One of our partners here at OneVision offers a free Amazon Echo Dot ($50) to any client who signs up for a paid monitoring plan. This minimal hardware investment provides a nice selling point for the company while also opening a conversation about the exciting new category of voice control in the home.
Plus, it can be set up in the same visit that monitoring is enabled within the home.
As it turns out, the Echo Dot also provides the end user with a highly convenient means of summoning support through OneVision's new tech support skill.
The main point here is that a small ‘give’ is sufficient, and that you shouldn’t be compelled to offer large equipment discounts/giveaways or heavy subsidies on your RSM hardware.
Instead, Market the Service Your Clients Already Expect
Instead of looking to equipment as a way to incentivize your clients, you should have confidence in the idea that, in fact, the service itself is the incentive.
One of our core beliefs at OneVision, and a key driver for our 24/7 Instant Triage service, is the fact that today’s home technology buyer implicitly expects a basic level of support 24 hours a day, 7 days a week.
I’ve found that most integrators are already meeting this demand, albeit begrudgingly and in an ad-hoc manner (basically, the business owner’s cell phone ringing at all hours of the day… and night).
These integrators consider this an implicit liability because excellent service goes along with an excellent installation. However, what many integrators are missing is the fact that this service should be leveraged as a powerful incentive to engage clients in your new paid plans.
In other words, you can turn your liability into an asset by marketing the service you’re likely already providing.
At OneVision, one of the first steps we take with our new partners is to launch an email campaign marketing free 24/7 phone and email support. Using this free around-the-clock offering as an incentive, we are able to drive integrators' clients to take steps like using our new consolidated service channels (phone and email) and acknowledging our terms of service.
By engaging first with this free incentive, we also open the door to upselling premium service plans.
I encourage everyone to offer 24/7 availability to their clients, and of course OneVision is always here to help. If you decide to keep it in-house, the important thing is to leverage the service you provide as an incentive to drive your clients towards your new service plans.
Closing the RMR Sale
Learning to sell premium support and service can be a challenge as it requires a distinctly different approach than selling large projects.
As a way to “short circuit” the learning curve, you might be tempted to apply large incentives to your programs to ease the sale and encourage a team effort in your company.
While certain incentives can be effective, you shouldn’t give too much away. Simple steps such as leveraging your around-the-clock basic support or offering small equipment giveaways can be highly effective.
By applying these techniques to your incentive programs, you can drive the sale of more premium service plans while not exposing your business to unnecessary risk.