The global AV and digital signage industry is experiencing slow but steady growth, and solution providers across the nation are challenged to differentiate themselves during these highly competitive times. As a solution provider in this dynamic market, you’re likely considering the best ways to build your business, either by finding an underserved niche or outpacing the competition. Either way, you should look into the effects that strong recurring revenue could have on your company.
Like any technology field, pro AV experiences its own peaks and valleys. You likely know when you expect slower times in your local market, especially if you work in verticals such as education, which typically conforms to an annual calendar for technology upgrades. But some years, it’s difficult to anticipate when a slow period might hit. That’s when recurring revenue can help your bottom line stay in the black, even if new business slows to a trickle.
Here we examine four of the top recurring revenue opportunities for pro AV and digital signage:
1. Service contracts.
Pro AV and digital signage technologies are becoming increasingly advanced, which means that more of your customers will require your assistance in making sure they work as they should for years to come. This gives you a perfect opportunity to add service contracts to your product offering.
A service contract lends your customers the peace of mind that you will be there to help when something goes wrong. From your perspective, it ensures that your clients stick with you, rather than going to another solution provider for service and troubleshooting, while also creating steady income every month.
2. Content creation.
In order to be effective, digital signage requires fresh, relevant content on a continual basis. For your customers, constantly creating new content can become time-consuming and may even fall by the wayside. Unfortunately, if their target audience starts to see old, outdated content, the overall goal of the digital signage installation might be compromised.
In order to help simplify content creation, many solution providers are starting to offer it as an additional service to their customers. You can partner with a third-party content firm or even provide streaming video or audio services as part of your contract. Your customers will be able to put the day-to-day hassle of content creation out of their minds, and you’ll increase your monthly income even more.
3. Software as a service (SaaS).
SaaS is a fast-growing trend in many technology industries, and it’s really starting to catch on with pro AV and digital signage installations. SaaS enables you to offer cloud-based AV software to your customers, rather than requiring them to buy it outright.
SaaS offers both you and your customers significant benefits. From the client’s perspective, cost savings are the No. 1 selling point. Instead of spending $2,000 or more up front for a full software package, your customer can pay you monthly installments—often as little as $50—for a hosted solution. The customer also enjoys simplified management, which is ideal for small and new companies.
In turn, SaaS provides you with a steady, reliable source of recurring revenue. Spreading out the cost of software in this way can help your business weather the slower months of the year and enjoy long-term income.
4. Technology refreshes.
New pro AV and digital signage innovations emerge every year, promising advanced features, lower energy consumption and other benefits to your existing customers. With a technology refresh agreement, your customers won’t have to wonder what they’re missing out on.
Product refreshes enable you to replace your customer’s AV hardware or software after a predetermined length of time, or on an as-needed basis. This helps them ensure that their installation never looks old or outdated and remains as effective as ever. In return, you collect monthly payments that help cover the cost of the new systems—creating yet another win-win for you and your clients.
What are your main sources of recurring revenue? Do you plan to focus on creating additional monthly income throughout 2016?