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5 Ways to Generate Recurring Business Income


4 Minute Read


Clients today are looking beyond installation to find a partner who will maintain and update their AV systems and equipment. If your AV integration business model excludes providing value-added services, you are missing out on recurring business income. If you’re still not sold on the need to generate recurring revenue from after-sales service, look at the many reasons why it is helpful:

  • Creates guaranteed profits: In the AV integration industry, companies are often hired to install a system that will be used for annual or ongoing events. This can include providing an AV integration system for tradeshows, lectures, and conferences. When installations like these are in high demand, this creates profits. However, these profits are not guaranteed to recur. Events are changing, and many companies are deciding against installing new AV systems in favor of hosting online events. Cancellations due to things like COVID-19, for example, are unexpected and can damage the bottom line of installation-only AV integration businesses. With recurring business income from after-sales service offerings, AV integrators can still have money coming in even if there isn’t a demand for new system installations.
  • Easier to plan: With consistent income coming in, AV integration companies are better positioned to plan for growth, expansion, training, and more -- unlike putting all your eggs in one basket with installations, for which the demand can be unreliable and present significant challenges in revenue forecasting.
  • Provides cushion for leaner times: Turnover due to a shortage of funds can lead to an AV integration business being understaffed or lacking employees with institutional knowledge right when they’re needed the most. Recurring business income and additional revenue streams can help integration companies keep experienced and productive staff members on board even during leaner times.
  • Cost of services is less than cost of sales efforts: Landing a new installation project can be expensive. It requires extensive time and effort on behalf of your sales team, and all that effort may only net you profits from one standalone event. With alternative revenue streams like recurring business income from services, you’re making a profit each month without the same level of effort required from your sales team. Thus, ongoing service contracts can help reduce operations and labor costs, while allowing you to grow your AV integration business.

With alternative revenue streams like recurring business income from services, you're making a profit each month without the same level of effort required from your sales team.

  • Monthly purchasing is growing popular: Subscriptions and monthly payment options are becoming increasingly popular. Companies want access to top-tier AV technology and services without having to make huge, up-front investments. In these instances, companies are leasing equipment and paying for it monthly. This creates an opportunity for AV integrators to offer equipment rental services to increase their recurring business revenue.
  • Opportunity for deeper partnerships: When you provide ongoing services and support, it’s an opportunity to build a strong rapport with clients. This rapport means they will be more likely to turn to you when they have new projects and needs, as they trust your expertise and are already accustomed to working with you. 
  • Brand building: By offering additional services, you can grow your brand. When people have more regular contact with your business, they will develop a greater affinity for you as a brand. This type of familiarity can also breed customer loyalty, essentially enabling you to create an army of brand evangelists.

D-Tools Insights: Why After-Sales Service is Important


5 Ideas for Recurring Business Income 

Now that you know how important recurring business income can be, you may be wondering what your company can do to develop consistent revenue streams. There are many things you can do to generate recurring revenue as an AV integrator, including adding or tweaking the following:

  1. Products: Currently, this is a way that many AV integrators make money — by selling equipment together with integrated systems installation work. However, these sales are typically one-offs or single transactions. Clients purchase the technology, and then they don’t update it for several years. They may even go with a different provider for that update, as they have not been in contact with you regularly. If you add equipment leasing and maintenance services to your offerings, you can develop multi-year contracts. This guarantees regularly recurring business income.
  2. Annuity services: These types of services are typically paid for annually or semi-annually. This payment schedule can help a great deal with planning. Annuity services could include day-to-day technology management as well as support services like maintenance, repair, spare parts, and warranty coverage.
  3. Ongoing projects: These types of contracts are typically paid on delivery. The projects vary in scope, and may include things like consulting, integration, implementation, and training. For example, training a client’s new hires on how the various integrated technologies work could be an ongoing education services project.
  4. Subscription-based technology services: This is a common and successful add-on many systems integrators use to increase revenue from existing customers. This can involve charging clients monthly access fees for cloud-based technologies. It allows integrators to continue to innovate and offer clients the latest and greatest options available, while also building rapport. These services allow for collaboration and instant implementation, which appeals to integrators and clients alike.
    D-Tools Insights: How to Increase Revenue from Existing Customers
  5. Transactions: This is another great way to boost recurring revenue for your AV integration business. You can offer adjacent services that bolster or improve your core offerings on a pay-per-use, transactional basis. This works well for products or services clients will need regularly, but perhaps not daily or weekly.

How to Find Even More Ideas for Recurring Business Income

Why stop at just five ideas for recurring revenue streams?! There could be even more options that make sense for your company. However, it can be difficult to know about these options without doing your due diligence. Before rolling out new product or service offerings for your AV integration business, consider taking action to:

  • Conduct research: Check out what your competitors are doing, and see how you can improve upon their offerings or adapt them into options that make sense for your company. You’ll especially want to scrutinize their pricing models to evaluate profitability.
  • Form an internal think tank: Gather key stakeholders in your company for a brainstorming session. They are subject matter experts and should provide a great deal of insight into what you should offer, and when you should start offering said products and/or services.
  • Check in with clients: If you have clients with whom you have great rapport, consider asking them a few questions about your offerings. See what they feel about your current products and services, and what you could offer them to improve their experience. 

Listen to your customers in order to deepen your relationships with them - which can transform your bottom line and business as a whole!

In conclusion, remember that every customer need is an opportunity for your business to generate income just by fulfilling that need. And, by truly listening to your customers, you can deepen your relationships with them, which can transform your bottom line and business as a whole. Estimate, design, install, and service with D-Tools Software for system integrators. Request a live demo today!