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Profit from pro AV/digital signage recurring revenue

June 15, 2020

Profit from pro AV/digital signage recurring revenue
Many solution providers have caught on to the idea that more recurring revenue is a good thing. In fact, it’s a very good thing and well worth your time to pursue, especially if you’re in the pro AV and digital signage markets.

5 benefits of recurring revenue, subscriptions and as-a-service offerings
We could take an entire blog writing about the many benefits of recurring revenue, but here are a few details that should make this a worthy endeavor for you.
  1. Flatten revenue peaks and valleys–Monthly recurring revenue equals a stable and predictable revenue stream that can be used to make strategic business decisions with confidence. On the break-fix model, you don’t know what your revenue next month will look like. With recurring revenue, you have complete visibility.
  2. Increased business valuation–When it comes time to sell your business, having monthly recurring revenue subscriptions on the books can make your business worth 3x to 8x EBITDA or more.
  3. Opex vs Capex spending—Many organizations are hesitant to lay out large sums of cash for IT upgrades. The subscription model turns large Capex spends into more manageable monthly Opex spends.
  4. Subscriptions are the norm—People today understand the subscription model and enjoy its benefits on a personal level. It’s no surprise the interest followed to the corporate world.
  5. Always up-to-date hardware and software—With a subscription model, customers get up-to-date software and working hardware with no concern that failures will lead to a costly bill.
4 pro AV/digital signage recurring revenue opportunities
Knowing recurring revenue is good is only the first step. The next is to determine which service(s) you’d like to offer your customers. Consider these:
  1. Content management software as a service (SaaS)—The software that drives your customers’ digital content management solutions can be sold as a monthly subscription for each connected display.
  2. Content creation services—Many organizations need assistance in creating and managing a regular stream of content for their signage solutions. Offer this service for a monthly fee.
  3. Hardware as a service (HaaS)—Bundle displays, kiosk enclosures, speakers, microphones and other components into affordable monthly payments.
  4. Proactive management and support—Use remote management tools to monitor and manage customer pro AV devices efficiently, keeping them functioning correctly and alerting you before issues arise.
Sell everything as a service
Plenty of manufacturers today, especially those in the software business, already have subscription models established for their solutions. However, just because your preferred manufacturer doesn’t have such a program doesn’t mean you can’t still offer their solutions as a monthly service.

Ingram Micro understands the power of recurring revenue, so it should be no surprise that its finance team is regularly helping solution providers build bundles of hardware, software and services with creative monthly payment plans for customers.

If you’re ready to take advantage of pro AV recurring revenue, contact Tom Jones, Ingram Micro’s pro AV expert today.

 

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