Jul 27, 2020 5:16:41 PM by: Jill Duran

How to build recurring revenue for IT solution sales businesses

Even the most successful technology integrators who sell audiovisual, security,  video, data, telecommunications, unified communications, and any other 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 and system integrators come and go since the mid-90's, a big differentiator between the best and the ones who are barely getting by has everything to do with their abilities to secure recurring revenue commitments. It has held true even more so with the pandemic. Those integrators who have been building their recurring revenue streams for some time now have been able to weather this storm a lot better than those who have only focused on transactional business models. 

The best way to help yourself now, if you haven't made the pivot to a service sales model is to begin doing so now before it's too late. So how do you do it? How do you secure monthly recurring revenue from selling services when equipment is still such a large part of the sale? 

Selling Multiyear Support Services

It's really quite simple in theory. Start selling more services and support contracts. 

Selling more support services is a simple common sense concept that is too often a missed opportunity to build that revenue and expected cash flow. It is a high margin sale that should be capitalized on. Over months, quarters, and years, technology integrators are able to count on those earnings for the course of the agreement. I would think that a definite and growing revenue stream would be beneficial to your business. 

Imagine if you could secure multiyear service contracts at the point of sale on all of your solution sales in a year. You'd be able to count on that revenue for years to come. So, how do you make this theory a reality? 

The Secret to Successfully Sell Services

Make the pivot to a services sales model. Make proposing monthly payments and X as a Service solutions part of your sales process. 

If you are an integrator who has always assumed your customers strictly pay cash and want ownership of their technology you have to take a different approach and shift your mindset.

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 an X-as-a-Service, fee for use, subscription-based approach. Organizations are more than ever after the use of their technology and are less focused on the need to own it. They want access and outcomes, the ability to remain competitive, and avoid obsolete, outdated technology that will bottleneck their growth. This makes offering a monthly payment option like TAMCO Shield, technology equipment as a service, with your technology solution recommendation a very logical and welcomed answer.

Therefore, we firmly believe the fastest route to sell more multiyear support services that builds recurring monthly revenue for your organization is by proposing an all inclusive monthly payment solution for your equipment and services.

In fact, industry statistics have proven that transactions which result in a cash sale will only secure a multi-year support commitment less than 15 percent of the time. However, we have witnessed around 65 percent of transactions result in capturing multi-year support and services when integrators recommend a monthly payment option, like technology equipment as a service, to customers. 

"transactions which result in a cash sale will only secure a multi-year support commitment less than 15 percent of the time. However, we have witnessed around 65 percent of transactions result in capturing multi-year support and services when integrators recommend a monthly payment option..."

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 support services on their av, security, data, access control, voice, video, etc. solution sales when sales teams recommend and propose a monthly payment option.

Why Does This Work?

Why do you think this is? The answer is quite simple. When you present a bundled, convenient monthly payment option that includes your support, services, and equipment already bundled into one payment it creates a much more palatable offering than asking customers to pay a large lump sum of capital.

You can take it a step further with a monthly payment offering like Shield, technology equipment as a service, which adds differentiation and value with the Solution Replacement Guarantee, natural disaster protection, and more. 

To learn more about building recurring revenue, selling more support and service contracts, or learning about TAMCO Shield, Technology Equipment as a Service, request a partnership introduction meeting or download or eBook on how our partner program can help you achieve RMR.

eBook CTA graphic on downloading how to create recurring revenue for technology solution integrators with TAMCO's parntership


recurring revenue / av as a service / technology as a service / AV integrators / security integrator / commercial integrator

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