As part of a company in the office imaging space, you’re likely familiar with how financing works. Selling a monthly payment is business as usual for imaging providers because they’ve long realized the potential for increased margins on transactions that include a financing component as compared to cash transactions. Additionally, a good financing company can help you implement strategies that simplify the experience for your end-customer, protect the customer relationships you’ve worked so hard to earn, drive efficiencies in your business and support your overall growth in business valuation.
The Environment, Players and Consumers are Changing
That said, it’s no secret the industry is changing, and business as usual is starting to look different. Print and imaging providers are evolving, and diversification only seems to accelerate. Many providers that were previously focused on imaging or print offerings are now adding software, IT hardware, VoIP, security or cloud offerings into their solutions catalog. The world of IT and network offerings continues to collide and combine with the imaging space, leading to more activity in terms of mergers and acquisitions.
To help navigate these changes and speed up the journey to diversification, many imaging providers are aligning themselves with businesses focused on the IT and network side. These organizations have the specialized talent, subject matter expertise and experience needed to sell and implement IT and network offerings successfully. While this strategy has many benefits, there are some things to consider, including the difference in go-to-market strategies between a traditional print or imaging-focused provider and a traditionally IT-focused provider.
Specifically on the IT and network side, solutions are still often sold for cash. This means you can expect acquired customers and IT sales talent to have little or no exposure to the idea of buying or selling their technology via a monthly payment. You’ll likely encounter hesitance toward a monthly payment on the IT side when it comes to your new sales counterparts and when interacting with IT decision makers. As these two worlds collide, how does this change your view on financing?
I argue that it shouldn’t change at all. Acquiring new technology on a monthly budget will always be a much easier pill to swallow for your customers when compared to making a large cash outlay. It’s better for you, and it’s better for them. But that doesn’t mean you won’t encounter resistance.
Changes to who you’re selling to and who you’re selling with may require you to take a purposeful pause and remember the “why” behind a financing option. Imaging businesses should take these opportunities to convert IT sales from cash to monthly recurring revenue, and education will be key when convincing all parties that a financing payment is a better long-term play for the customer and the business. Whether you’re selling printers or IT solutions, working with a financing company to offer a monthly payment on the solutions you sell can have a plethora of benefits.
Financing Creates Stable and Predictable Recurring Revenue
Cash purchases are almost always unpredictable in nature. Financing, on the other hand, offers a convenient way to create predictability as far as payments flowing into your office technology business. This is particularly true in two areas: cash flow during installation and at the time of the technology upgrade. By leveraging financing to develop strong monthly recurring revenue, your business can enjoy a more consistent and reliable stream of income. This is good for your businesses’ cash flow and allows for better financial planning. It’s also easier to forecast sales since it reduces the overall amount of variability from month to month.
Monthly Recurring Revenue Creates Increased Business Valuation
Businesses that prioritize recurring revenue not only enhance their financial stability, but also increase the valuation of their business, making it more appealing to the market. Recurring revenue is a critical component in assessing the overall health and value of a business. It represents predictable income streams that occur at regular intervals, such as monthly or annually. Businesses that generate recurring revenue—often through subscription models, financing, service contracts or ongoing product sales—tend to be more attractive to investors and potential buyers because they recognize the value and importance of sustainable, predictable earnings.
A Customer-Centric Sales Process Creates Stronger Relationships
In today’s competitive landscape, you must learn the art of balancing customer needs with closing sales. The ability to adapt your sales process to prioritize customer satisfaction ensures a win-win situation. Offering a monthly payment not only benefits your business, but also enhances the overall experience for your customers because it addresses both their immediate and long-term needs. Instead of pushing for a one-time sale and convincing them to buy new technology every couple years, you’re empowered to take a more customer-centric approach and offer a refresh option. Doing so acknowledges the fact that technology evolves rapidly, and your customers may require updates as it advances to stay efficient and competitive.
You also provide a payment solution that fits their budgetary needs so they know exactly what to expect each month. When upgrades are incorporated into the payment structure, customers won’t have to face the pressure of large unplanned expenses when it’s time for a technology refresh, which encourages loyalty. It also frees up the focus of your team; it can be less immersed on securing the next big sale and more engaged in adding value. Whether it’s personalized support, training or customized solutions, more attention can be shifted from transactions to service excellence. This approach fosters trust, builds lasting relationships and keeps customers satisfied.
A Well-Equipped Finance Company Can Help Your Business Grow and Scale with Bundling
Finally, working with a good finance company can bring value beyond a financing program. Bundling your technology, hardware, services and supplies on a single, easy-to-pay invoice can have a big positive impact on the customer experience and your operational efficiency. Look for financing companies that have invested heavily in specialized billing expertise and technology integrations with the billing platforms you use. Bundling can be complicated, but teaming with a financing company that helps you automate the steps involved in bundled invoicing can save time and differentiate.
In Summary
Whether you’re selling shredders, copiers, printers and scanners or computers, software, VoIP and IT solutions, working with a financing company to position a monthly payment option aligns with the needs of the modern buyer and proactively addresses the long-term objectives of both you and your customers. When it comes to providing a financing option, we cannot emphasize enough how important it is that you’re strategic and thoughtful in your selection. Working with a financing company can bring so many benefits to your business, but not all finance companies are the same. Align with a financing company that operates with the same level of integrity you would expect from your team to ensure that same level of care extends to the customers you serve.
