ADD THAT SERVICE! WHY RECURRING SERVICE REVENUE IS IMPORTANT
Dimitri Mavromatis, 8 August, 2017
As the market is evolving towards vendors selling a wider range of products services and solutions, so too is the way finance contracts or managed services contracts are structured. SaaS is not a new concept, nor is financing via this model, however the focus on developing recurring revenue has never been greater or more easily achieved.
SER encourages its vendors wherever possible to include a service/recurring revenue component in their Managed Services Plans.
This service component can include:
- Help Desk
- On Site Support
- Future Licencing
- Included Prints, Scans, Uploads,
- Software upgrades
Building your business’s recurring revenue via a Managed Services Plan has the following advantages:
- Allows an income stream for the vendor for the life of the contract
- Takes revenue reliance away from just hardware sales
- You get your service income month by month rather than having to manage the income up front for the entire contract
- Capacity to increase the vendor’s bottom line with increasing revenue
- Vendor has the opportunity to increase the service by 10% annually to counter any increase of servicing due to equipment wear and tear.
- SER bills the end-user for the total amount and remits the service to the vendor along with all additional excess charges.
- The customer gets one bill for all their needs: hardware, software, solutions, maintenance.
You may ask why SER is promoting our partners to finance less and build more into a recurring revenue, there are 3 reasons:
- A strong recurring revenue model paired with good hardware and software growth is in the best interest of our vendors partners. It means they get stronger and as such so do we.
- It is best for the customer. It is significantly cheaper and more flexible as they are not financing the service revenue.
- For SER we are just financing the hardware, software, professional services and installation which is our preference.
The enabler of all of this is SER’s Managed Services Plan. There is increasing interest in Managed Services Plans as the days of standard rental agreements are fading away and the technology world is rapidly moving towards managed services.
There are currently a range of benefits in signing end-users to Managed Services Plans. These include:
- Managed Services Plans allow for the finance of a diversified range of equipment such as copiers, IT hardware & Software; all on one contract.
- Benefit of adding recurring service revenue, excess charges, IT and software costs on one bill solution.
- The end-user is provided with full disclosure of the excess prints and excess copies along with the total monthly payment.
- Able to offer a one bill solution to all vendors in allowing for excess service and sundry expenses to be added through the SER Portal. This enables the vendor to pass over the billing to SER without the added headache of chasing the end users for outstanding excess service and costs. SER does all the work!!
If you have a solution that you think may suit this Recurring Revenue model give SER a call to discuss how we can help.
Team Leader-Collections, Systems Development & Administration, S.E. Rentals
S.E. Rentals are the finance as a service specialists that will help you grow your business by providing finance solutions in an 'all things technology' future. We provide you with the flexibility, scalability and agility to help you achieve your Managed Service objectives, and our unique in-house software platform automates the process for you with a One Bill Solution - your bill - your document - your branding.