Commercial Fire: The Importance of RMR with Andy Boyd, IPS

When IPS, a commercial fire integrator based in Ohio, began as a company with just three employees in 2000, they overlooked how essential securing recurring monthly revenue (RMR) was. “We didn’t realize how important RMR was to our business in 2000, so we let a lot of easy monitoring and testing go to other people. We didn’t go after that early, which was a huge mistake,” says President Andy Boyd.

 

That’s why the first piece of advice he gives to anyone looking to enter the commercial fire market is to develop RMR as soon as you can. Despite the early struggles, IPS has since grown to a $24 million business with 80 employees and offices in Cincinnati and Columbus. About one third of the company’s business is in commercial fire, with another third coming from access control and the final third coming from CCTV.

IPS spun out of an electrical contracting company and providing stellar customer service was where they aimed to stand out. “We thought we could do commercial fire better than the big boys, at least locally. We felt we could deliver better customer service. That was our niche,” Boyd says.

 

Because about 70 percent of commercial fire in the Cincinnati and Columbus areas is decided by electrical contractors and IPS spun out of an electrical contractor, they also had to do some initial work to help their customers understand that they weren’t a competitor. Part of that was convincing the customer that the new company would be around to continue providing service, which Boyd says was especially important when specifying a new product to an engineer.

 

Creating good relationships with customers and electrical contractors is not the only way IPS focuses on building relationships. Making sure a commercial fire company understands the viewpoints of all the fire marshals in the different jurisdictions where they work is important. For that reason, IPS fosters relationships with fire marshals through lunch and learn events. IPS will invite a manufacturer to give a presentation, provide lunch and even offer continuing education credits to encourage fire marshals to attend. “Whatever you can do to help educate and keep them informed is going to help your business. They really want to learn more, but they’re not always given the opportunity to have those classes,” Boyd says.

After nearly 20 years in the business, Boyd has seen a few things change in the industry recently. One of those changes is the increased competition for smaller jobs. Manufacturers are making it easier for smaller companies to install equipment, and that has resulted in falling margins for smaller buildings, Boyd says. “We’re not totally leaving that area, but we’re definitely winning less and at some point, we’re going to have to make some hard decisions on whether or not we even bid on it,” he says.

 

One area that’s emerging is cellular monitoring, Boyd says, which presents an opportunity for growing RMR. Upgrading an existing customer from a landline to cellular monitoring is relatively easy, he says, but you can go from an account that includes just monitoring to a cellular account plus the monitoring, which increases revenue.

Overall, the most important thing to a sustainable commercial fire business has been finding, hiring and keeping great employees, Boyd says. “Our biggest challenge today is finding talent—good talent—to stay with the pace of our growth,” he says.

 

Part of that is that fewer people are interested in getting into the commercial fire industry. Boyd underlines the importance of providing training to new and current employees and always recruiting. “Even when we’re not looking to hire, we’re always looking to hire. If the right guy came along, we’d probably hire,” he says.

 

He explains their overall personnel philosophy as pretty simple: “Our philosophy is that you hire the best people you can, you empower them to do their jobs and you pay them the best you can. It’s pretty simple, and it works.”