As more security integrators shift to offering managed services, are you ready for this new business model?
NSCA’s most recent Financial Analysis of the Industry research reveals that the average percentage of recurring revenue sales jumped from 10.83% in 2018 to 17.32% in 2020. We’re excited to see what that number is in 2023 when our updated report is launched this fall.
In a joint survey conducted by NSCA and PSA Security, 61% of successful MSPs say the fiscal impact of recurring revenue from managed services offerings has significantly improved their bottom line.
GreatAmerica Financial Services, an NSCA Business Accelerator that develops customer financing for integrators, has also seen record-breaking numbers when it comes to new integrator partnerships.
What’s holding you back? If your team hasn’t been successful at selling services yet, this could be why …
1. You’re Attempting a DIY Approach
“Whenever you’re making a decision to do something new in business, you have three choices,” says Ian Pugh, director of strategic partnerships at GreatAmerica Financial Services. “You can choose to build, partner, or buy. When as-a-service first hit the industry, people tried to build out their own programs by themselves. But now there are options for partnerships that can expedite the process for integrators that want to take a solid run at this.”
There are platforms available to develop as-a-service and financing options. For example, GreatAmerica Financial Services helps integrators build custom financial plans, create recurring revenue, eliminate budget barriers, and bundle recurring contracts with product lease payments. Sometimes, all it takes is the right partner to show you where and how it can be done.
2. Conversations with Customers Aren’t Headed in the Right Direction
Customers may not be asking you for monthly payment options yet — but that doesn’t mean they’re not interested.
The trick, says Nick Nielsen, vice president of sales for GreatAmerica Financial Services, is to offer it — not force it. Simply providing the choice gives customers a chance to explore the idea. He points to an RBC Capital Markets study as a good reason to do so: Making customers aware of BNPL (buy now, pay later) plans has been shown to increase conversion rates by 20% to 30% — and increase sales as well.
“Perseverance pays off,” says Pugh. “It may take weeks, months, or even years of having these conversations. It takes time for end users to figure out how things work, but it will happen — and, when it does, it will help you win.”
When you provide options and let the customer choose how to make a technology investment, you may be surprised by their decision.
3. Sales Still Operates at Status Quo
“Compensating salespeople from a recurring-revenue perspective isn’t something that integrators have had to do before,” explains Mike Abernathy, NSCA’s director of business resources. “Changing the behavior of sales reps is really difficult to do without also requiring changes to compensation plans and quota attainment.”
In addition to compensation, sales teams likely need some coaching to handle the new types of conversations they’re having. When discussing as-a-service, they’re no longer leading IT procurement conversations or solutions-based discussions with end users — they’re having financial discussions with CFOs, finance directors, and controllers. The value proposition now needs to be compelling for these top finance leaders, which requires a different talk track and skill set.
4. Your Marketing Doesn’t Hit the Mark
Even though your salespeople should have these discussions with clients, the burden doesn’t rest solely on them. In many cases, Nielsen says buyers need to be 90% of the way to deciding about as-a-service before they talk to sales.
“The integrators that are winning right now are the ones that have marketing campaigns in place to educate their end users about as-a-service,” says Pugh. “If the marketing is done right, then you can have some customers salivating over this type of offer.”
Creating as-a-service demand starts letting your customers know it exists through emails and e-newsletters, blogs, videos, webinars, white papers, social media, etc. In other words: Don’t keep it a secret that clients can purchase technology via a monthly payment.
When marketing takes the lead, the customer already knows about the program by the time a salesperson sits down with them — so it doesn’t come as a complete surprise. To get your marketing started, GreatAmerica Financial Services offers a toolkit with resources you can customize and build from.
You Don’t Have to Be Overwhelmed
Don’t sit on the sidelines because you don’t think you’re ready or don’t have the ability to monitor 24/7. To get started, you can sell services when customers need them — and you can finance hardware purchases.
It all comes down to making buying easier for clients by selling technology via monthly payments. Where it goes from there is really up to you. For integrators, the as-a-service model is just getting started.
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