5 Ways to Boost Recurring Revenue

Published: February 23, 2017
Recurring revenue is "king" for business models today, according to J B Wood, CEO of TSIA.

“Recurring revenue is king,” said J B Wood, CEO of  Technology Services Industry Association (TSIA), at this year’s PSNI Supersummit in Dallas during his session, “Shifting Business Models for the New Realities of Tech.”

Recurring revenue and the benefits it can bring integrators is not a new concept, but installers across the board are still finding it difficult to incorporate recurring revenue into their business models.

There’s no doubt there is a need for business models to transform within the AV industry. Simply installing a system isn’t enough anymore. As technology becomes more complex, clients are looking to integrators to assist with training, maintaining and updating systems.

That’s where providing services comes into play, and that’s where integrators will find opportunities to incorporate recurring revenue into their business models.

“There is a new wave of growth coming. The question is, do you want to jump on it, or not?” said Wood.

Wood shared five available revenue types that provide recurring revenue opportunities to integrators. Do you see an opportunity to “jump on the new wave of growth” and incorporate these revenue types into your business model?

1. Product

Payment for a technology asset (hardware or software)

2. Technology Subscription

Payment for access to technology, ie customer pays monthly or signs an annual/multi-year contract to lease the technology

3. Annuity Services

Payment for a service capability that is renewed on an annual or multi-year basis.

  • Managed services: Includes outsourcing day-to-day technology management to a third party
  • Support/Maintenance Services: Includes support, maintenance, repair, spare parts and warranty contracts

4. Project

Payment for project delivery

  • Professional Services: Includes implementation, integration, technology consulting and business domain consulting
  • Education Services: Includes training of customers and business partners

5. Transactions

Pay-per-use, transaction fee for an adjacent offering of complimentary modules or capabilities that extend or enhance the value of the core offer.

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