Paul Dippell, the CEO of Service Leadership says a company’s IT budget is made up of 20% acquisition and 80% keeping the technology running. That is exactly why product resellers of the past are increasingly making the leap to Managed Services. They want a larger wallet share of their customers’ IT Budget.
Solution Providers and industry experts agree: when you move from just selling technology to managing the technology, it becomes vital the network is up to snuff.
Imagine you are managing a fleet of cars for a delivery service. The cars are between 10-15 years old and all different makes and models. Your service tech needs to be familiar with all the different makes and models, and older vehicles are bound to have more problems. Now imagine instead you are managing new to 3-year-old cars and all are the same make and model. Issues will be minimized and easier to fix.
The same concept applies to technology. When you manage the same “make & model”, your techs know the products inside and out, and as a result it’s easier and cheaper to fix. You aren’t spending as much time and labor, and as an added bonus you gain bandwidth to take on more customers or better serve the ones you have.
Keeping It Fresh
The real trick to standardization is getting your customers to approve a capital expenditure every 3 to 5 years for updated technology. We know the IT Director hates having the budget fight with the Controller and CFO; just imagine when the economy is hitting rough patch. That budget fight could become a brawl.
There is an easier way! Instead of selling the technology for cash, offer a monthly payment. Even if the customer has the cash lying around, a monthly payment is the long game.
Upgrades: A Long Game in Action
When your customer makes monthly payments of $1,000 instead of paying cash for their technology you create a decision point down the road. Instead of having the budget fight when the equipment needs refreshed, you can just rip and replace the technology and go another 36 months right at or around $1,000 per month.
Why Upgrades Are a No-Brainer
The monthly payment is in your customer’s budget; you have 36 months of evidence proving that. In the above scenario there is no difference in their cash flow. The customer paid $1,000 last month and they’ll pay $1,000 this month. If you rip and replace the technology, have the customer sign a new 36 month agreement, they will pay $1,000 next month and not feel the sting of a new purchase.
From standardization to ease of refreshing the customer’s equipment the value to you and your clients is clear. You are making technology hassle free.
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- managed services
- recurring revenue