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2010 Business Trends Include Recurring Revenue

2010-q1-mib.jpg

Latest NSCA Research Reviews Services Commonly Associated with Systems Contractors
CEDAR RAPIDS, IA, February 10, 2010 — NSCA’s latest Market Intelligence Briefing™ (MIB) report, Recurring Revenue – Selling Service, analyzes six key recurring revenue streams for systems contractors.

Contractors acknowledge that the financial health of the business is not measured by total annual revenues, but rather by the timing of those revenues against the outlay of expenses. This fact underscores the benefit of recurring revenue streams.

Contractors identified six major categories of service when surveyed for this report, including:
o Service agreements/contracts – more than 74% offer this service in the corporate/industrial, educational and government facilities
o Preventative maintenance agreements/contracts – 62% of contractors find this a profitable service in the education, corporate and healthcare markets
o Managed service agreements – while remote monitoring of systems is relatively new, 21% of those surveyed are involved in it and attribute it to 5.9% of gross revenue
o End-user training agreements – 21% of respondents provide product training, 24% of which just began in 2009, showing recent growth
o Security, life safety or fire alarm monitoring services – 24% of contractors are involved in this specific section of the industry; almost half of this group has offered these services for more than 16 years
o Content supply and creation – it’s no surprise that of the 20% of companies, mostly small businesses, are involved in this extremely niche market.

Chuck Wilson, NSCA executive director, said the effect recurring revenue services have had during the economic downturn over the past couple of years was significant.

“The benefits of recurring revenue streams go far beyond cash flow and revenue contribution,? Wilson said. “Many contractors increase their service business – recognizing that service is a ‘product’ that companies should strive to make tangible and easy for customers to understand.?

These services lead to an enhanced, ongoing connection to decision-makers by building on customer relations and creating better brand recognition.

NSCA’s quarterly MIBs provide NSCA members with current data on key industry issues, complete with statistical results, interpretation, implications, market knowledge and implementation goals. For more information or to view the report, visit www.nsca.org/MIB.

About NSCA
NSCA is the leading not-for-profit association representing the commercial electronic systems industry. With more than 2,500 member companies worldwide, the National Systems Contractors Association is a powerful advocate of all who work within the low-voltage industry, including systems contractors/integrators, product manufacturers, consultants, sales representatives, architects, specifying engineers and other allied professionals. NSCA is dedicated to serving contractor members and all channel stakeholders through education, advocacy, outreach and member services. NSCA University offers a variety of courses on topics such as project management, business, sales, design and technical knowledge. Courses are delivered through a variety of methods including conferences, regional trainings, online learning and webinars. NSCA works in conjunction with a variety of industry partners to provide relevant and meaningful education and certification programs. It also provides leading industry research and market intelligence, insurance solutions, the industry’s most comprehensive manual of practice, Essentials of Systems Integration™ and other business tools. For more information, visit www.nsca.org.

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