There’s something really special about the term recurring revenue. It’s a siren song without the nefarious undertones. It’s the Mister Softee jingle, sans the excess pounds from drinking black-and-white milkshakes. There’s something quite Pavlovian about the term; it elicits a positive reaction and makes the hair stand up on your arm.
As we usher in this month’s State of the Industry report on non-MFP hardware opportunities, we ponder the importance of recurring revenue as a value add. When we look at the wide world of non-box hardware, from UCaaS/phones to displays/AV and cameras/access systems, not all lend themselves to contractual post-sale opportunities. But most offer the chance to gain inroads into a new account, sell to a client that doesn’t have an MFP need, or tack on supporting ancillary equipment/software. Our dealer panel shares ways in which its non-MFP hardware sales can be further leveraged.
Security cameras and access control systems from Axis and Verkada have provided a boon for American Business Machines of Bakersfield, California. Ronnie Lemen, the dealer’s IT and security solutions director, points out that dealers can enjoy recurring opportunities beyond the initial installation, such as annual maintenance agreements consisting of routine system cleanings, parts and labor coverage, and unlimited remote and on-site support. The contracts ensure peak system performance for the client and predictable, ongoing service revenue for American Business Machines.
Cloud-based platforms such as Verkada offer recurring licensing revenue through yearly subscriptions. “These licenses cover everything from video storage and analytics to system health monitoring and advanced features,” Lemen said. “The cloud model allows us to stay engaged with our clients long-term, continuously adding value through software updates, remote support, and system optimization.”
More MNS ROI
Those dealers that have committed to building high-end managed network services platforms, such as Loffler Companies of St. Louis Park, Minnesota, appreciate the wide range of lucrative add-ons that can be offered to accounts. President James Loffler notes there are other opportunities beyond recurring staples such as proactive network management, help desk support, and strategic guidance through roles like vCIO and vCISO.
“We also generate recurring revenue through bundled software licensing, endpoint protection, cloud backup and optional hardware-as-a-service (HaaS) for network infrastructure,” Loffler said. “This model creates predictable revenue while deepening client relationships through ongoing engagement and strategic alignment.”
Budget Document Technology has earned a solid influx of business by virtue of its unified communications-as-a-service (UCaaS) relationship with Zultys. Budget President Tom Ouellette has been pleased with the results in less than two years since the Lewiston, Maine-based dealer embarked on this brand of UCaaS.
“We’re paid on monthly recurring revenues for a minimum of 36-month contracts and revenue on any that extend beyond,” he said. “We also package a professional services fee on some proposals if the client wants us to fully install the system.”
True Value
One product offering that lacks the recurring component is digital displays. Erik Crane, president and CEO of CPI Technologies in Springfield, Missouri, notes that complementary software offerings are minimal. The real value lies in going wider with clients, especially as their faith in your dealership deepens.
“It’s mostly about building your confidence, trust and rapport with that customer,” he said. “It’s about capturing more wallet share, whatever makes you stickier in that account. They’re going to be spending the money somewhere, so why not spend it with you?”
