If you plan on moving to an AVaaS model, you’ve got to get comfortable selling a monthly payment. This could be a major hurdle for your sales team if they are accustomed to only presenting a cash option. Some sales reps may object saying things like, “it adds interest to the project” or “my customer’s don’t finance”. Neither of these are true. Yes, financing does add interest to the project, but the returns the customer could gain by investing the cash into other areas of their business like marketing or adding headcount far outweigh the cost. In the words of oil mogul and billionaire Jean Paul Getty, "Lease that which depreciates, buy that which appreciates."
Next, the belief that your customers don’t finance is false. Your customers are financing other technology purchases like copiers, phones, furniture and IT infrastructure. Over 90% of phone systems are financed while over 95% of copiers/printers are financed. With the advent of the Cloud and Software as a Service, or SaaS, in the IT world, more customers are consuming IT as a monthly payment.
So why are you still making customers pay cash for AV systems? Even though financing does add interest to the project, it makes the buying decision easier for your customers. At least give the customer the option of turning a large capital expense into a budgetable, monthly payment. Customers are never offended by options…especially good ones. Plus, the process of selling equipment leasing to getting the deal finalized is easy. How easy? Much easier than you think, especially when working with a company like GreatAmerica that understands the AV industry and is a member of NSCA.
After speaking with hundreds of systems integrators, I am shocked at the low success rate of those selling maintenance agreements. Every time I go through the check-out at Best Buy, they try to sell me an extended warranty. So why isn’t your sales team selling maintenance agreements? Or at least adding maintenance agreements to every proposal, every time? What is your success rate of selling an annual maintenance agreement on a cash sale? 10%? 20%? What about multi-year maintenance agreements? I’m guessing even lower.
It’s much easier to sell multi-year maintenance agreements when you sell a monthly payment instead. It simply becomes part of the monthly payment as a single invoice. Imagine if you could sell a 3 year maintenance agreement on 20% of your projects. How would that affect the profitability of your business? Now imagine selling multi-year maintenance agreements with other managed recurring revenue on 40-50% of your projects when selling Audio Visual as a Service or AVaaS. This is the success rate in many other technology verticals like IT and Telephony, and could be yours too.
See a webcast recording below on how to answer the most common objections partners receive when offering monthly payments.
In my opinion, you can only sell a true AVaaS solution after your sales team has conquered selling monthly payments and including service agreements in the sale. The next step in the transition is actually bundling everything As-A-Service. That means leading with an all-in monthly payment on every deal, every time. Don’t breakout the equipment cost from the maintenance service. Also, do not give the customer a purchase option unless it is absolutely necessary. For best practices on how to make your quotes more appealing to customers, download this eBook.
This is a completely different sales concept that requires a different set of skills. If your main point of contact with your customer is the IT Director or Facilities Manager you are not going to be successful with AVaaS. You need to be talking to the C-Level… CFO, Director of Finance, etc. This is a financial discussion about your customers’ best use of their funds. The conversation is no longer about price but about Operating Expenses and monthly budgets. It’s entirely different from the one your sales team is currently having with the Facilities Director.
The As-A-Service model is nothing new. You don’t have to invent the wheel because it already exists. The copier, telephony and IT spaces have been selling As-A-Service models for years, and they’ve been doing it very successfully and at very high margins. Your customers will not be “shocked” when you offer them AVaaS because they are already consuming other technology in this manner. You simply have to package your projects and services to the customer in an easy to consume monthly budget. Instead of making your customers cough up large sums of cash for their AV needs, help them budget a monthly expense for the technology and services you provide.
There a few variations to the traditional As-A-Service model. To learn about the GreatAmerica program, Audio Visual as a Monthly Payment, or AV AMP, which helps you offer an As-A-Service program without any of the financial burden, click below.
