Re-selling alarm monitoring builds a more attractive business and earns you more money, writes Alarm Watch CEO Wade Coneybeer.
If you’re an alarm installer who doesn’t currently re-sell alarm monitoring, you’re leaving money on the table. Beyond just the initial install, alarm monitoring provides a steady stream of recurring revenue, strengthens customer relationships, and makes you look good.
One of the biggest advantages of re-selling alarm monitoring is the ability to generate consistent, repeating income. Unlike a one-off installation job, monitoring creates a revenue stream that grows over time.
Alarm monitoring providers offer wholesale rates to alarm installers, allowing them to set their own margins and invoice their customers directly. This is a fantastic way to build financial stability, especially during slower periods or economic downturns, such as during COVID.
Many alarm installers lose touch with their customers after the initial installation. Re-selling ongoing alarm monitoring keeps your brand visible and maintains a relationship with your clients. They’ll see your logo regularly, know who to call for technical support, and come to you when they need upgrades or system expansions.
This keeps your service front of mind, making it easier to generate additional business while also increasing customer retention. Clients who stay engaged with your services are less likely to switch to another provider, increasing loyalty.
By monitoring the systems you install, you get notified of any system faults. Instead of waiting for a customer to notice the beeping keypad and call you, monitoring gives you the opportunity to proactively reach out and schedule service calls like replacing the battery or improving the exit delay time.
This results in more technical work, helping to keep your techs busy. Plus, if a customer moves house or upgrades their system, you’ll be the first person they call, ensuring another install and ongoing monitoring.
The power of alarm monitoring is in the numbers. Even with a small client base, the income quickly adds up:
- 25 clients at $20 profit per month = $500 per month ($6,000 per year)
- 50 clients at $20 profit per month = $1,000 per month ($12,000 per year)
- 100 clients at $20 profit per month = $2,000 per month ($24,000 per year)
- 250 clients at $20 profit per month = $5,000 per month ($60,000 per year)
This ongoing income stream provides financial stability, reduces reliance on new installations, and creates long-term value for your business.
When it comes time to sell your business, a monitoring database adds significant value. Businesses with recurring revenue models are far more attractive to buyers. Predictable cash flow reduces business risk and increases valuation multiples, making your company more appealing when it comes time to sell.
Some installers don’t think long term, but a few clients each year start to add up. When it’s time to sell, the value of your monitoring database becomes clear.
Monitoring database buyers typically pay a multiple of the monthly invoice amount when purchasing monitoring accounts. Historically, this multiple has ranged from 15 to over 30 times the monthly fee.
For example, if you charge $40 per month per client:
- A 15x valuation means each account is worth $600
- A 20x valuation means each account is worth $800
- A 28x valuation means each account is worth $1,120
Over time, even a modest number of monitoring clients can lead to a substantial payout when you decide to sell your business. But beyond the eventual sale value, the ongoing profit from monitoring adds up significantly.
If your profit per client is $20 per month, that’s $240 per year. With the average client staying for seven years, that equates to $1,680 in total profit per client—before even considering the resale value. A few clients every year quickly becomes worth asking the simple question “Do you want monitoring?”
If you bring in just 10 new monitoring clients per year, after 10 years, you’ll have 100 clients:
- With each client generating $20 profit per month, that’s $2,000 per month or $24,000 per year in recurring profit.
- If you decide to sell, those 100 accounts at a 20x valuation would be worth $80,000 in a lump sum payout.
- When you add the ongoing profit earned over time, the total value of those 100 clients easily exceeds $250,000.
That’s the power of combining steady income with a valuable business asset. Even a small number of monitoring clients quickly turns into serious money.
Many alarm installers face challenges from clients who prefer self-monitoring. While self-monitoring has a place in the market, making it the default option means saying goodbye to your recurring income. Self-monitoring has several downsides: Clients must live on their phones, constantly checking alerts. Most notifications get lost in the noise, increasing the risk of missing actual threats. Insurers don’t recognise self-monitored systems for discounts.
If you focus on selling self-monitoring over professional monitoring, you’re cutting yourself out of long-term revenue. Instead, position professional monitoring as the primary option and offer self-monitoring only when it genuinely suits the customer’s needs.
One of the biggest advancements in alarm monitoring is video verification services. These services are breathing new life into professional monitoring by allowing both the monitoring operator and the customer to view live camera footage during an alarm activation. This significantly reduces false alarms and unnecessary guard callouts. Re-selling alarm monitoring builds a more attractive business and earns you more money. If you’re not already offering alarm monitoring, it is really easy to change that!
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