Every customer must determine how to pay for their technology. Any technology; AV, surveillance/security, unified communications, video conferencing, data networking, etc. Whether they acquire a new solution, upgrade an old solution, or switch to a different solution, they are having a conversation about how to pay for it. You decide if you want to be a part of that conversation or not. As the sales rep, it's your responsibility to recommend a total business solution that not only works for the customer, but for you as well. Being involved provides you with more control within your sales process. Addressing how to buy is just as important as deciding what to buy.
It’s important to note that when you lead with a cash sale, your customer is quite literally sucking potential cash out of your business's pocket. It prevents you from reaping the benefits of recurring revenue from alternative methods of payment that offer a myriad of benefits to both you and your customer. Cash sales and recurring revenue just simply are not friends.
1. One & Done Cash Sales = One & Done Revenue
Technology like voice, audiovisual, security surveillance, cybersecurity, video conferencing, data networking or any other related equipment sales is a commodity. Literally any of your competitors can and will do a cash sale. So, to your customers, you're just a dime a dozen. Not only is a cash purchase ordinary, but recommending using upfront capital to pay for technology does not enable you to add any unique value to the overall solution being offered.
Recommending a procurement method, such as financing, creates manageable monthly payments that:
- Is typically a more palatable payment option
- Preserves capital for better use
- Produces an immediate return on cash flow
- Makes it 6x more likely to secure multiyear support when bundled in a monthly payment
Industry statistics have proven that transactions which result in a cash sale will only secure a multiyear maintenance commitment less than 15% of the time. However, 60-70% of monthly payment options capture monthly maintenance and support, which means more profitability (or, recurring revenue) for you. Selling more multiyear support contracts is a common sense concept that is often a missed opportunity to build expected cash flow, especially in a cash purchase.
2. You're Kissing Customer Loyalty Goodbye
With the one-time box sale, it's often that the customer won't feel the need to return to you for any future sales. A cash sale does not have any mechanisms to create a meaningful bond between the customer and the sales rep, technology integrator or IT solution provider for your future business. This doesn't provide any value to the customer, and certainly doesn't help you in terms of future sales and recurring revenue.
When positioning a financing alternative, the payment option has conditions that tie the customer to you for any future transactions, such as renewals, add-ons, or upgrades of equipment. Combined with the bundled monthly maintenance, this contractual customer loyalty will continually funnel recurring revenue in your pockets for years to come.
Don't Wait The Time Is Now
The marketplace is giving obvious signals that you should be taking advantage of. With the technology trends moving towards the adoption of cloud or hosted models, more and more customers are expecting that "X as a Service" fee for use, subscription-based approach. This makes offering a monthly payment option with your technology solution recommendation a very logical and welcomed answer.