I conducted a poll of over one hundred Fire Alarm and Sprinkler firms on the best ways to improve profit margins in service. The participants were a cross section of my clients, and non-client firms that are in my database.

1. Focus on RMR (Service Agreements)
2. Raise hourly rates and minimums
3. Service Sales training
4. Dedicate someone to selling service agreements
5. More full coverage agreements and less inspections and repair

 (Other items: Improve customer service skills, manage manpower, etc.)

In follow up conversations it’s clear there’s a rising uncertainty the installation business will continue to be strong. Economic indicators, especially interest rates and vacancy rates, point to a cooling off in new installation and retrofit activity as early as Q4.  For those in business during the last business downturn, post mortgage crisis, they’re aware how quickly things can change. Adapting their business model to focus on RMR seems like the best preemptive measure to ensure ongoing financial stability and growth.

From my experience I know RMR revenue opportunities are overlooked by firms in the industry daily. Of particular concern is margin lost when people are not properly trained in service sales.  Too many unsold proposals given to the wrong people, too much money left on the table due to underpriced agreements, and most common a haphazard approach lacking in direction and strategy.