What are the key sales KPIs for the Home Security industry in 2027?

Question

Pulse RevOps · The Machine · Accepted Answer

### Direct Answer

The nine KPIs that decide whether a 2027 home-security operator is building a billion-dollar exit or a depreciating service truck are: **(1) New Customer Adds per Month**, **(2) RMR (Recurring Monthly Revenue) in dollars**, **(3) Cancel/Attrition Rate %**, **(4) Average Monitoring Rate**, **(5) DIY vs Pro-Install Mix %**, **(6) Cost-to-Install (Subscriber Acquisition Cost)**, **(7) Account Multiple (RMR x trading multiple)**, **(8) Cross-Sell Attach Rate (cameras, video doorbells, smart-home)**, and **(9) Customer Lifetime Value (LTV)**. RMR and the account multiple together set enterprise value. Attrition silently eats it. The other seven tell you which lever is bleeding.

> **TL;DR:** Home security is a subscription-and-multiple business disguised as a hardware business. ADT, Vivint, and Brinks trade portfolios at 30-50x RMR — meaning every $1 of monthly recurring revenue is worth $30-$50 in enterprise value. A 12% gross attrition rate combined with a $1,500 cost-to-install destroys that math fast. Track RMR, attrition, and cost-to-install weekly; everything else is downstream.

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## 1. Why home security works differently from any other industry

Home security looks like a hardware sector — panels, sensors, cameras, sirens — but the financial engine is pure subscription economics. The hardware is loss-leader; the contract is the asset. Operators sell or refinance their RMR books to PE buyers and strategic acquirers at a **trading multiple of 30-50x monthly recurring revenue** (SDM Magazine 2026 Top 100 report). That means a $50/month monitoring contract is worth $1,500-$2,500 the moment ink dries on the agreement. No other home-services industry has this asset-multiple dynamic at this scale.

Five structural realities shape every KPI in the category:

**Account multiples = exit value.** Unlike HVAC or roofing where the company sells on EBITDA, home security companies sell on RMR multiple. ADT's 2024 portfolio was valued at roughly 35x RMR. Vivint sold to NRG Energy in 2023 at an implied multiple in the same range. This is why operators tolerate negative first-year unit economics — they're manufacturing balance-sheet assets, not P&L profit.

**Alarm-monitoring economics are brutal but durable.** Central station monitoring costs $1-$3 per account per month to deliver. Customers pay $30-$60. The gross margin on monitoring is 70-85%. But the cost to acquire that account — equipment, install labor, sales commission, marketing — runs $1,000-$2,500 (Parks Associates 2026 Smart Home Tracker). You pay back in 24-36 months. Attrition above 13% means you never pay back.

**Summer-knock door-to-door still drives Vivint, Brinks, Alder, Aptive-style operators.** Memorial Day to Labor Day generates 60-70% of annual installs for D2D-heavy companies. This compresses the year operationally and inflates Q3 cost-to-install. It also produces higher first-year attrition (buyer's remorse, college-student reps) than retail or inbound channels.

**The DIY disruptor — Ring, Nest, SimpliSafe, Wyze, Arlo — broke the moat.** Amazon-owned Ring sold 12M+ doorbells through 2025. SimpliSafe ships self-install kits at $0 install cost and $20-$30 monitoring. The old MSO (monitoring services operator) playbook — long contracts, expensive truck rolls, $50 RMR — now competes against $15 self-install RMR. The KPI implication: monitoring rate compression is the slow leak that ate Monitronics/Brinks margins from 2020-2025.

**3-year and 5-year contracts are increasingly under regulatory pressure.** The FTC's 2025 negative-option rulemaking, plus state attorney-general settlements with Vivint and APX, make 60-month contracts harder to enforce. Expect contract length to shorten to 24-36 months by 2028, which directly raises attrition and pressures the account multiple.

```mermaid
flowchart TD
    A[New Customer Add] --> B[Cost-to-Install $1,500]
    A --> C[RMR added $45]
    C --> D[Account Multiple 35x]
    D --> E[Asset Value $1,575]
    B --> F{Payback 33 mo}
    F -->|Attrition under 12%| G[Profitable Subscriber]
    F -->|Attrition over 13%| H[Negative Unit Economics]
    G --> I[Cross-Sell Cameras +$15 RMR]
    I --> J[LTV $3,200]
    H --> K[Portfolio Writedown]
```

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## 2. The nine KPIs, deep-dive

**(1) New Customer Adds per Month.** Gross new monitored accounts activated. Top-100 dealers add 200-2,000/month; ADT adds ~50,000/month corporate plus dealer; Vivint adds ~25,000/month. This is the top-of-funnel pulse — when it falls two months in a row, RMR growth turns negative within a quarter because attrition keeps running.

**(2) RMR (Recurring Monthly Revenue) — dollars.** The single most-quoted number in the industry. ADT reported $355M RMR exiting 2024 (10-K). Vivint reported approximately $158M RMR pre-acquisition. Track *net new RMR* (gross adds minus attrition minus rate concessions) weekly. RMR growth of 5-8% annually is healthy; 0-3% means the book is aging out faster than it's being replenished.

**(3)

What are the key sales KPIs for the Home Security industry in 2027?

Direct Answer

1. Why home security works differently from any other industry

2. The nine KPIs, deep-dive

3. Real operators — how the leaders use these numbers

4. Failure modes — how home-security operators get this wrong

5. Reporting cadence — what to look at when

6. The 30/60/90 — implementing this scorecard

FAQ

Sources

What are the key sales KPIs for the Home Security industry in 2027?

Direct Answer

1. Why home security works differently from any other industry

2. The nine KPIs, deep-dive

3. Real operators — how the leaders use these numbers

4. Failure modes — how home-security operators get this wrong

5. Reporting cadence — what to look at when

6. The 30/60/90 — implementing this scorecard

FAQ

Sources

What does the score mean?