Sep 28, 2015 3:00:00 AM by: Jill Duran


How to build recurring revenue for IT solution sales businesses

The Key to Recurring Revenue

Even the most successful technology solution providers who sell telecommunications, unified communications, and related technology equipment see peaks and valleys in their cash flow over the course of any year. If you have not had this experience, you must have the magic potion for ensuring your sales team hits home run quotas each month. And if that’s the case, you should have retired a long time ago. After witnessing technology solution providers come and go for a couple decades now, a big differentiator between the best and the ones who are barely getting by has everything to do with monthly recurring revenue commitments.

Selling more multi-year maintenance is a simple common sense concept that is too often a missed opportunity to build that revenue and expected cash flow. Over months, quarters, and years, technology solution providers are able to count on those earnings for the course of the maintenance agreement. Don’t you think that a definite and growing revenue stream would be beneficial to your business?

The Trick to Selling Maintenance

If you are a solution provider whose customers strictly pay cash, you are kind of missing the ball with maintenance and this concept of additional stable cash flow. There is an old adage, if nothing changes, nothing changes. So to make this multi-year maintenance model work, you have to be willing to adjust your sales process just a smidgen.  The trick has to do with how maintenance is presented in the sales process.

Industry statistics have proven that transactions which result in a cash sale will only secure a multi-year maintenance commitment less than 15 percent of the time. However, we have witnessed around 65 percent of transactions result in multi-year maintenance when customers choose to finance their unified communications solutions.

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READ MORE ABOUT FINANCING vs CASH


That is a huge difference. Can you imagine the possibilities with all of that added revenue? Just think, over four times more customers will opt for maintenance on their technology solution sales when sales teams recommend financing. Why do you think that is? The answer is quite simple. When a sales rep or an account executive (AE), presents a bundled palatable monthly payment option that includes maintenance as opposed to having to use a large lump sum of cash, it becomes a much more attractive offer.

IMPORTANT: The marketplace is giving obvious signals that you can take 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.

LEARN MORE: Interested in learning more about growing your profit margins, pulling in more multi-year maintenance on your transactions, and utilizing a distinctive financing partner who can set you a part from the competition? Download our free ebook:

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OpEx / Value Added Reseller / Unified Communications Equipment Leasing / Leasing & financing / Telecommunications Leasing / UC Lease & Finance / TAMCO / technology leasing / Unified Communications / TAMCOnnect Plus / technology solution provider

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