In any technology field, creating recurring revenue is an achievement that can have a significant impact on the success of your business. Not only does recurring revenue enhance cash flow and help you weather slower months, but it also creates upselling opportunities, differentiates your business from the competition and establishes “stickier” customers over the long run.
If you haven’t already been focused on creating recurring revenue, implementing it into your business strategy may feel like a big change. However, you can easily start by adopting one or two of the following techniques this year and then adding others as you become more accustomed to the new business approach.
To begin adding recurring revenue to your cash flow, considering incorporating the following into your pro AV business:
1. SaaS (Software as a Service).
Managed services such as SaaS have emerged as one of the leading ways to gain recurring revenue. A few short years ago, InfoComm International estimated that services made up more than 40 percent of the North American market for pro AV. It’s likely that number has grown quite a bit since then.
If you’re not already offering SaaS, now is the time to consider adding it to your business. A growing number of organizations are turning to cloud-based software because it offers lower up-front costs, simplified management, no licensing fees and other benefits. Consider starting your SaaS offering with video hosting for conference rooms and cloud-based digital signage platforms, which will appeal to a significant percentage of your AV customers.
2. Product refreshes.
Like many other fields of technology, pro AV advances rapidly. Today, more customers are demanding advanced devices and network-enabled capabilities, especially as consumer technology becomes increasingly digital, interactive and powerful. Newly released AV innovations actually give you an opportunity to create recurring revenue, while also ensuring that your customers’ deployments remain relevant and effective.
Now is a great time to consider adding product refreshes to your service offering. You can work them into the contract for each new customer, providing them a chance to upgrade their AV technology after a predetermined time frame, or as needed. Rather than having to pay for the devices outright, the refresh is included in their original contract and is paid for on a month-to-month (or quarterly) basis. This creates regular, predictable income for you, while also giving your customer peace of mind about their AV installation.
3. Content creation.
For customers using digital signage, whole-house audio and other technologies, there is a constant need for new, engaging content. That’s why many solution providers offer content creation as an ongoing service, providing video, audio, text and still images that will help get a customer’s message across and achieve their end goals.
Some solution providers actually create content for their digital signage customers, but the vast majority leverage subscription services to provide the audio and video materials that their clients require. If you’re considering adding content creation as a recurring revenue source, look into subscription services that offer a wide range of options, such as content packages and live streaming.
4. Service and support agreements.
Of course, one of the most widely adopted ways to improve recurring revenue is to offer service and support agreements. Your customers can pay a monthly fee to ensure that they will receive technical help any time their AV system encounters a problem. This helps maintain the customer–solution provider relationship over the long haul. Plus, it’s simply good business to support the technology systems that you know best.
What are some of the ways in which you plan to create recurring revenue for your pro AV business? What are some of your other techniques for creating cash flow?