Most alarm dealers ask this question the way a contractor would: revenue target, divided by job value, divided by close rate. That model is wrong for your business, and it is wrong in a direction that will leave you short every single month.
You do not sell jobs. You sell subscriptions, and subscriptions leak. The number of leads you need per month is not a revenue equation, it is a leak equation, and until you subtract what you are already losing, every lead plan you build will be roughly half the size it needs to be.
Here is the arithmetic, with real 2026 benchmarks, and the three levers that change the answer more than any budget increase can.
The short answer, and why the usual one is wrong
The standard formula everyone borrows from the trades looks like this: revenue target, divided by average job value, gives jobs, divided by close rate, gives leads.
Run that on an alarm company and it produces a number that quietly assumes your existing account base is static. It is not. Acquisition and Funding Services, which finances and brokers alarm account portfolios, puts industry standard gross attrition at around 10% a year and says keeping it at or below that level is a requirement for building company value, not a stretch goal.
Ten percent a year on a subscription book is not a rounding error. It is a hole in the bucket that you are obligated to refill before a single dollar of growth appears.
So the correct model has one extra line:
- Net RMR growth target for the year
- Plus RMR lost to attrition over that year
- Equals gross new RMR you must create
- Divided by average RMR per account, gives accounts needed
- Divided by close rate for that lead type, gives leads needed
- Checked against your creation multiple, gives whether the plan is fundable
Line 2 is the one nobody publishes. It is also the one that doubles the answer.
Working example: a 1,200 account dealer
Take a representative independent: 1,200 monitored residential accounts at $45 average RMR. That is inside the $30 to $60 monthly monitoring band that LeadGen Economy's 2026 market guide reports for professionally monitored security, and it matches what real customers are paying, which we will come back to.
- Current RMR: 1,200 × $45 = $54,000 per month
- Growth target: 10% net RMR in twelve months = +$5,400
Now line 2. At 10% gross attrition you lose 10% of $54,000 over the year, which is $5,400 of RMR gone. Identical to your growth target, which is not a coincidence, it is what a 10% target against 10% churn means.
- Gross new RMR required: $5,400 + $5,400 = $10,800 for the year, or $900 per month
- Accounts required: $900 ÷ $45 = 20 new accounts per month
- Of those 20, 10 are pure replacement. 1,200 × 10% ÷ 12 = 10 accounts a month lost.
By the numbers
Half your install schedule is a treadmill. The dealer in this example books 240 installs a year and ends it with 120 more accounts than they started with. If your tech capacity plan says 20 installs a month and your growth plan says 20 installs a month, you have no growth plan.
Converting accounts into leads
Twenty accounts a month becomes a very different lead number depending on what you are buying. LeadGen Economy's 2026 benchmarks put booking rates at 5% to 10% for shared leads, 12% to 20% for exclusive, 20% to 35% for live transfers and 25% to 45% for pre-booked appointments.
Using midpoints against our 20 accounts a month:
| Lead type | Typical close | Leads needed / month | Typical CPL | Cost per created account |
|---|---|---|---|---|
| Shared (4+ buyers) | 7% | 286 | $30 | $429 |
| Exclusive | 15% | 133 | $110 | $733 |
| Live transfer | 27% | 74 | $125 | $463 |
| Booked appointment | 35% | 57 | $150 | $429 |
Two things fall out of that table that the lead vendors do not lead with.
First, the answer to "how many leads" is meaningless without the lead type. 286 versus 57 is not a rounding difference, it is a completely different marketing operation, a different phone system and a different number of people.
Second, the "premium leads are always cheaper" line is not reliably true. The common vendor argument compares a $120 lead closing at 18% against a $50 lead closing at 6% and concludes premium wins. Move both to the midpoints of their own published ranges and it flips: shared at $30 and 7% costs $429 per created account, exclusive at $110 and 15% costs $733. The ranges overlap enough that the winner depends entirely on where in them you actually sit.
Which is the real point. Nobody can tell you your close rate. If you are still quoting an industry figure back to yourself, you have not measured, and every number downstream of it is decorative. We wrote more on this in why your security alarm leads are not converting, where the pitch, not the lead, is usually the failure.
The budget check most plans skip
The alarm industry has a purpose built metric for this and most dealers never calculate it. A creation multiple is the total cost of generating new accounts divided by the new RMR created in the same period. Alert 360's dealer guidance sets the formula as install revenue, minus direct install, sales and marketing costs, minus attributable admin plus half of remaining admin, divided by gross RMR created.
Their targets: 25 to 30 times RMR for traditional sales programs, and 30 to 35 times for well run door to door.
Now go back to the exclusive lead row. 133 leads at $110 is $14,630 a month to create $900 of new RMR. That is a 16.4 times multiple on lead acquisition cost alone, before a single panel, sensor, truck roll or commission. You have spent roughly two thirds of a 25 times budget on the top of the funnel and still have to install the accounts.
The shared and appointment rows come in near 9.5 times on lead cost, which leaves genuine room underneath. That does not automatically make them better, because shared leads carry costs the spreadsheet does not show, and we compared those directly in exclusive vs shared security alarm leads. It does mean the exclusive plan needs a close rate at the top of its range to survive contact with the creation multiple.
Watch out
If your lead cost alone exceeds about half your creation multiple target, the plan is not aggressive, it is unfundable. You will hit the lead number, miss the margin, and conclude that marketing does not work in this industry. What did not work was the arithmetic.
The treadmill scales with your book
Here is the part that surprises dealers who have been growing for a decade. Your replacement requirement is a function of how many accounts you already have. The bigger you get, the more leads you need to achieve nothing.
Accounts lost per month, and the leads needed at a 15% close rate just to replace them:
| Account base | 5% attrition | 10% attrition | 15% attrition |
|---|---|---|---|
| 500 | 2.1 accts / 14 leads | 4.2 accts / 28 leads | 6.3 accts / 42 leads |
| 1,200 | 5.0 accts / 33 leads | 10.0 accts / 67 leads | 15.0 accts / 100 leads |
| 3,000 | 12.5 accts / 83 leads | 25.0 accts / 167 leads | 37.5 accts / 250 leads |
| 6,000 | 25.0 accts / 167 leads | 50.0 accts / 333 leads | 75.0 accts / 500 leads |
A 6,000 account dealer at 15% attrition needs 500 leads a month to stay exactly flat. That is the plateau most established alarm companies hit and misdiagnose as a market problem. The market did not change. The bucket got bigger, so the hole did too.
We build this table with your actual account base, your measured attrition and your close rate by lead type, because almost no dealer has seen their own version of it. More than once the honest conclusion has been that the fastest path to the growth target runs through retention, not through more lead spend, and we would rather tell you that than sell you volume.
The lever that beats a budget increase
Attrition sits on both sides of the equation. Lower it and you simultaneously reduce the accounts you must sell and increase what each surviving account is worth.
Take the same 1,200 account dealer from 10% to 5% gross attrition:
- Annual RMR lost falls from $5,400 to $2,700
- Gross new RMR required falls from $10,800 to $8,100, or $675 a month
- Accounts required falls from 20 to 15 a month
- Exclusive leads required falls from 133 to 100 a month
That is a 25% reduction in required lead volume purchased with zero additional marketing spend. At $110 per exclusive lead it is about $3,600 a month, or $43,000 a year, that you no longer have to spend.
Then the second effect. CT Acquisitions' 2026 RMR multiple guidance tiers alarm valuations directly on attrition: sub 5% supports 40 to 50 times RMR, 8% to 12% supports 32 to 40 times, 12% to 18% supports 25 to 32 times, and above 18% makes most accounts unsellable to institutional buyers.
At $54,000 of RMR, moving from the middle of the 32 to 40 band to the middle of the 40 to 50 band is $1,944,000 versus $2,430,000. Roughly $486,000 of enterprise value, created by the same work that cut your lead bill.
No amount of additional Google spend does both of those things at once.
The trap in raising your rate
The obvious counter-lever is to raise average RMR. Push $45 to $55 and you need 16 accounts a month instead of 20. The arithmetic is real. The behavioural cost is where it gets expensive.
A homeowner in r/homesecurity this year described being with SafeMart, then LiveWatch, then Brinks after acquisition, and watching the rate climb: "Since 2021, it's climbed from $29 to their new rate this month of $50." Their post was titled "Thoughts on switching alarm companies". That is a churn event being authored in real time by a pricing decision.
The replies show what they were being pushed toward. One recommended EyezOn at $8.50 a month for IP monitoring or $12.50 with cellular. Another pointed at Alarm Grid at $15 for basic. A third laid out DIY Alarm.com dealers at $19 including professional monitoring with no long term contract.
Your rate increase is not evaluated against the market rate. It is evaluated against a $15 floor that is one search away.
Tip
Model rate increases as a two variable change, never one. If pushing average RMR up 20% pushes gross attrition from 10% to 13%, you have added $1,620 a year to the hole while removing four accounts a month from the target. Run both lines before the price letter goes out.
The same threads point at where local dealers actually win. In a thread from a restaurant owner leaving ADT after a break in was mishandled, the top advice was to "reach out to a few locally owned alarm companies" who will keep existing wired sensors instead of ripping them out, with one commenter warning specifically about dealers who "sell your contract to brinks or ADT." Being the local company that does not sell the account and does not force a hardware rip out is a retention position, and retention is the cheapest lead source in this table.
Run the calculation per segment, not per company
One blended number will mislead you badly, because residential and commercial are not the same business wearing different hats.
LeadGen Economy puts commercial security leads at $200 to $500 each against $20 to $150 residential. Sticker shock, until you weight it by RMR. Ten commercial accounts at $150 RMR create $1,500 of new RMR a month, more than 20 residential accounts at $45. You need half the accounts and a fraction of the lead volume to hit the same RMR line.
Commercial also lands in better valuation territory. CT Acquisitions puts small commercial monitoring at 32 to 45 times RMR and fire and integrated security accounts at 45 to 55 times, with lower attrition characteristics because code compliance and inspection cycles keep the relationship active.
So build the worksheet twice. A dealer whose growth target is $900 of new RMR a month might satisfy it with 15 residential accounts and 2 commercial, which is a completely different lead plan than 20 residential.
The six line worksheet
Do this once a quarter, per segment, on paper:
- Current RMR. Accounts × average RMR. Use billed, not contracted.
- Attrition RMR loss. Current RMR × your measured gross attrition. Measure it the way buyers do, as trailing 12 month RMR lost as a percentage of starting RMR.
- Gross new RMR needed. Net growth target + line 2. This is the number your sales plan is actually for.
- Accounts needed per month. Line 3 ÷ 12 ÷ average RMR per new account. Use the RMR of accounts you are selling now, not the legacy book.
- Leads needed per month. Line 4 ÷ your close rate for that specific lead type. If you have more than one type, do a row each.
- Fundability check. Total monthly acquisition cost ÷ monthly new RMR. If that number is heading past 25 to 30, the plan needs cheaper channels, a higher close rate or a smaller target.
If line 6 fails, the honest fix order is: close rate first, because it costs nothing and improves every row above it. Attrition second, because it shrinks lines 2 through 5 simultaneously and pays again at exit. Channel mix third. Budget last, and only once the first three have been tried.
The question behind the question
Dealers who ask how many leads they need per month are almost always asking a different question underneath: why does my account count barely move when I am busy every week?
The answer is usually sitting in line 2. You are working hard, installing steadily, and spending half of that effort standing still. The lead plan is not too small in the sense of ambition. It is too small in the sense that it was built without the leak in it.
Put the leak in the model and two things become obvious at once. You need more gross activity than you thought, and the cheapest way to need less of it is to stop losing what you already sold. For the cost side of the same equation, we broke down current pricing in how much security alarm leads cost.
Everything else is division.