Let’s face it, financing is not the most exciting to talk about, especially for a managed services company. We frequently like to focus on the technology versus the ways you can finance and sell your solutions.
But, financing can add significant value and benefit to your MSP business. Here are 5 simple benefits your MSP practice could receive from adding simple financing options to your sales process.
“As a Service Options
Everything today is sold “as a service” and this trend is not slowing down. Customers are being conditioned to purchase many things in a “as a service” model and the same is true of managed services. MSPs who cannot incorporate hardware, software, and other capital expense items into a “as a service” model will face increasing difficulty and resistance.
Eliminate 3rd Party Threats
MSPs who primarily focus on services, even those who may recommend or influence hardware/software purchase but do not sell them, can expose their clients to 3rd parties who may become dangerous to the managed services relationship. Many MSPs do not “sell” hardware or software because of the lack of value it has to their business. Instead, they influence the gear their clients acquire, wanting to manage the objects, not necessarily sell them.
By incorporating a financing/leasing program, many of these 3rd party threats can be eliminated.
Risk Based Pricing
I’ve talked a lot about risk based pricing in the past and we are starting to see MSPs adopt this model. Aside from the obvious benefits previously mentioned, risk based pricing fits in nicely with different financing models you can use in your MSP practice. Whether you are leasing, doing HaaS, or some other financing model, risk based pricing can easily wrap around that financing idea and maximize your profits while minimizing your risk.
Customer Budgeting
Customers like knowing what their IT costs will be. Financing is a great way to help customers afford IT, as well as plan for their upcoming IT costs. By having a financing platform, MSPs greatly increase their chances of signing and maintaining customers who have (from time to time) capital intensive IT needs.
Keep the Lifecycle Fresh
MSPs don’t like managing out of date hardware. Keeping IT environments updated and current is a very important element of eliminating risk for the customer and MSP. Financing programs are incredibly useful to offering customers the ability to maintain a consistent product lifecycle. Doing so will help the customer maintain stable operating hardware, and help the MSP deliver their services in a more consistent manner.
If you’re not already offering financing options to your customers, why not? The benefits are there, and not doing it could be costing you a lot more than you realize.