As a technology solution provider, having a "box sale" mentality is doing a huge disservice to your profit margins. You have to capitalize on the opportunity to sell multiyear maintenance (MYM) at the point of sale if you are serious about growing your recurring revenue and profit margins. However, it is highly unlikely that you will be able to gain customer commitment for MYM when you present them with a cash purchase. Only 12 percent of cash purcahses resort in MYM, but 68 percent of financed transactions will commit to multiyear support.
This is what happens when you recommend a monthly payment with bundled multiyear support instead of offering a cash price out of the gate:
1.Upfront Revenue to Satisfy Distributor Costs
Equipment and associated charges are financed and paid to you up front, allowing you to address your costs due to distributors.
The union of multi-year maintenance and finance transactions creates a power duo that benefits both the customer and you, the solution provider or value-added reseller. The protection, flexibility, and budget-friendly features of a payment option like Shield mixed with the consistent monthly income, increased customer loyalty, and higher profit margins from selling multi-year support is a win on all fronts.