If a customer asks you about financing, do you have a plan?
Inteconnex – an NSCA integrator member based in Cedar Rapids, IA – was working closely with its client, Strategic Print Solutions, a print management company in nearby Hiawatha, on a complete upgrade to its IT infrastructure, totaling approximately $120,000 in equipment. To avoid incurring 100% of the expenses upfront, the client was interested in financing the project (an option that more customers are now looking for, whether it’s an AV, IT, security, or communications project).
After hearing about NSCA Business Accelerator GreatAmerica, Inteconnex President Marc Meyer did some investigating to learn more about how its financing services worked – and then decided to complete the company’s first GreatAmerica financing deal.
How it Works
The process, he says, was simple. The Inteconnex accounting team created an invoice that was sent directly to GreatAmerica. Billing for 60% of the project upfront, Meyer says he received the money instantly. “Getting paid that fast is unheard of in our world,” he explains. “It’s really critical to improving cash flow.”
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GreatAmerica then started the process of billing Inteconnex’s customer (Strategic Print Solutions). Once the IT project was complete, Inteconnex invoiced GreatAmerica for the remaining 40% of the project. “I think we had money in our account the same day we sent the invoice over to them,” he says.
Based on his experiences, Meyer indicates that small and medium-sized enterprises seem to be the most interested in financing options. “That’s the key to getting the deal in some cases,” he says. “We wouldn’t have been able to upgrade all of Strategic Print Solutions’ IT equipment without that financing piece.”
Inteconnex has started to include a security-as-a-service purchase option on its quotes; Meyer thinks this will help the company close even more deals. “It also helps ensure that our customers are aware of the option without our sales team remembering to bring it up in a meeting.”
He plans to bundle those recurring services via GreatAmerica’s as-a-service model as well. In this model, GreatAmerica bills the customer every month for services provided by the integrator, and then sends residual checks to the integrator each month. “We have a deal coming up where we plan to do just that,” says Meyer. “We’re going to bundle alarm monitoring and hosted access control – hardware and everything. Then we give one monthly price to the customer.”
It will work like this:
- Inteconnex prices out a monthly payment option for the project, including the hardware, software, installation costs, and first year of maintenance. A five-year (60-month) finance agreement is a good place to start.
- The maintenance contract costs for years 2, 3, 4, and 5 are added together, and the total is divided by 60. This is now Inteconnex’s RMR.
- The monthly finance payment is added to the four years of RMR for the customer’s grand monthly total.
“Our first deal with GreatAmerica was awesome,” says Meyer. “If I could route every deal through them, I would.”