Every customer must determine how to pay for their technology. 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.
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.
One & Done Cash Sales = One & Done Revenue
Voice, video, and data technology equipment sales is a commodity. Literally any of your competitors can do a cash sale. So, to your customers, you're just a dime a dozen. Not only is a cash purchase ordinary, but recommending a cash purchase does not enable you to add any unique value to the overall solution.
Recommending a procurement method, such as equipment as a service, 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 multi-year support when bundled in a monthly payment
Industry statistics have proven that transactions which result in a cash sale will only secure a multi-year maintenance commitment less than 15% of the time. However, 60-70% of leases capture monthly maintenance and support, which means more money (or, recurring revenue) in your pocket. Selling more multi-year maintenance is a common sense concept that is often a missed opportunity to build expected cash flow, especially in a cash purchase.
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 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 leasing alternative, the lease 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.
Imagine The Possibilities
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 Shield, equipment as a service, option with your technology solution recommendation a very logical and welcomed answer.