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How VARS Can Achieve Recurring Revenue with Pro AV Systems

July 16, 2017

How VARS Can Achieve Recurring Revenue with Pro AV Systems

For value-added resellers (VARs) who are interested in adopting a monthly recurring revenue model, the possibilities are hard to resist. Consider the fact that some VARs experience growth rates of 100 percent or more in the first few years after incorporating recurring revenue streams – a dream for any VAR in the increasingly competitive digital signage or professional audio video industries.

Recurring monthly revenue can bolster your business with ongoing cash flow and upselling opportunities. From your customers’ perspective, continuing service and support lead to higher customer satisfaction and an edge over the competition.

If your company has considered adopting a monthly recurring revenue model, the transition might feel daunting. However, recurring revenue isn’t an all-or-nothing prospect; you can start by incorporating a few service and support offerings, and then build over time.

To get started, consider these options for achieving recurring revenue with pro AV systems:

1. Service agreements.

For customers with more complex AV systems, a service agreement is probably a good idea. As with any other technology, projection screens, projectors, conference equipment and displays can all have problems. By establishing a service agreement at the time of sale, you’ll earn ongoing revenue each month, and your customer will rest easy knowing that their devices are covered in the event of unforeseen issues.

2. Annual inspection/equipment warranty.

Another option is to create an annual inspection or equipment warranty schedule with each customer. They’ll pay a monthly or annual fee, and you’ll perform an equipment inspection based on a pre-determined schedule. This will also help them ensure that their technology warranties are still valid, and give you an opportunity to update or upgrade devices when needed.

3. Content packages.

Many VARs offer their customers digital signage and pro AV content packages in, for example, 10-, 20- or 30-hour increments. They charge a fee by package or by month, and the customer receives ready-to-run content that suits their company and space.

4. Monitoring/maintenance contracts.

Another option is to help each customer maintain content quality by establishing a continual monitoring and maintenance schedule. That way, you’re checking in on their devices regularly – not just when something breaks. You can price this contract based on the number of displays or AV systems, maintenance frequency and more.

5. Cloud video services.

Cloud services are growing as a recurring revenue source, and should for years to come. Your smaller customers might be especially interested in moving some of their AV services to the cloud, because it enables them to simplify their infrastructure and save money over time. Your role is to “manage” the service so that the customers don’t have to.

6. Subscription services.

Many VARs are tapping into the recurring revenue offered by subscription services. For example, Sonos offers customers a subscription service that provides new Internet radio stations to add to their systems each month. Similarly, you could offer customers streaming digital music subscriptions to link to their digital signage or, for video conferencing customers, you could charge a monthly phone service fee for their digital phone capabilities.

Are you planning to establish a recurring revenue stream within your VAR business? If so, what services will you offer?