Shrink the Gap Between Cash & as-a-Service Quotes

posted by Jackie Schmid on Tuesday, December 29, 2015 in Unified Communications and IT Blog

The Scenario

This plot may sound familiar to you:

You’ve recently adopted the HaaR® (Hardware as a Rental) or UCaaR (Unified Communications as a Rental) model to augment your cloud sales. The potential impact to your business is thrilling; more managed service contracts, stickier customers and higher margins. Unfortunately, the new concept is terrifying to some of your sales reps. What if they ask for the cash price? The customer will see a big gap between the cash and the monthly payment amounts. You’ll be kicked out the door holding your precious as-a-Service quote.

I had a chance to sit down with Sound Inc.,  a customer who has “been there, done that” and has some sage advice to anybody struggling with this issue: Stop comparing apples to oranges.

The above scenario was right in line with what they experienced  when they rolled out their ‘Sound Decision’ program several years ago. “Sales reps would say, ‘Yeah, I gave them an option for the Sound Decision, but they wanted to buy with cash,” recalls Steve Kocimski, Director of Sales at Sound Inc., when sales reps were dabbling in the offer in the first year. “Through constant, consistent reinforcement we were able to shift them to leading with the bundled program,” Kocimski said. Through practice, the reps understood why the Sound Decision offer was better for their customers.

“Over time, the culture changed in the sales group,” added Kocimski. Now that they’re leading with the Sound Decision, Kocimski estimates their sales have increased five times over.

Stop Comparing Apples to Oranges

Even if you lead with the monthly payment, there are going to be customers who ask for the cash price. When they do, be sure your customer is getting an accurate comparison.

“We found the cash price only included one year of maintenance and one year of manufacture software assurance; the Sound Decision monthly payment has all five years’ maintenance and manufacturer software assurance built in, so it wasn’t a fair comparison,” Kocimski said. “When the customer took the monthly payment times 60 months and compared it to the cash price it was a significant delta.”

Shrink the Gap

So what did Sound Inc. do to shrink the gap?

Instead of explaining how the two quotes were different, Sound Inc. built out a five year cash investment. The financial summary lays out the cash price for the equipment, plus five years of maintenance and manufacturer software assurance.

Once that delta between the two programs is significantly diminished, Sound Inc. folds in the advantages of having an operational expense vs. capital expense, shrinking the delta even further. Finally to close the gap, the sales rep talks about the cash flow benefits. Kocimski explains it like this, “Rather than writing us a check for $100,000, take that money and invest it in people, or a new printing press, or something that is going to generate revenue for your company and help you grow. Why would you give us that money when you don’t have to?”

Download the full case study to see how the Sound Decision has transformed efficiency, collections, sales and cash flow at Sound Inc.

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About The Author

Jackie Schmid is the Director of Strategic Marketing of the Unified Communications & IT Group at GreatAmerica Financial Services located in Cedar Rapids, Iowa. Jackie is responsible for building brand awareness and gaining strategic relationships through creative marketing. Prior to joining GreatAmerica, Jackie worked in the TV News industry as a producer and executive producer at the local CBS and FOX stations where she helped shape the programs delivered to the market. Jackie’s finance career began in 2011 when she joined GreatAmerica to support the sales team serving the Office Equipment space.

  1. case study
  2. cloud
  3. monthly payment
  4. quoting
  5. sales
  6. ucaar
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