Resellers in today’s marketplace are facing a decline in sales revenue. In the present economic environment, many companies are cutting back on cost by holding off on new purchases. Also, as technology advances and better machines become available, businesses’ need to spend less money on their hardware and software purchases. The new equipment is more powerful, with larger storage capacity, enabling one machine to take the place of as many as 10 of the older models. Thus, when companies need to replace their old equipment, they are able to buy one machine to take the place of multiple units. It has an impact not only on the reseller’s sales, but also the OEM who is also selling lower quantity of equipment.
One way of offsetting the industry’s topline revenue decline, brought on by the new technology and a poor economy, is to turn to service and maintenance contracts. Because of the economic downturn, businesses are looking to extend the life of their equipment, whether existing or new. This presents a great opportunity to capitalize on the higher margin maintenance services.
Research has shown that up to 50% of the potential service contract business is left untapped. Selling your customers service contracts will enable them to keep their equipment longer while bringing you, the reseller, additional revenue. It is easier to sell to an existing customer and you are providing them with something they really need. Business partners should review their customer lists to look for contracts that are expired or will be expiring; also warranties that are coming to an end, and then try to sell them maintenance service contracts. It will protect their IT investment and provide price increase protection for the life of the contract, resulting in long term savings.
There are many types of maintenance service contracts. IBM, for example, in an effort to offset the loss of revenue in equipment sales, has expanded their maintenance service contract offerings. In addition to Base Support and Hardware Maintenance, there are custom options such as Account Advocate, Enhance Technical Support, Microsoft Support and Storage Solutions. These contracts provide more personalized service, designed to reduce business impact and maximize return on IT investment. With the many options available, you, the reseller, can offer customizable maintenance contracts in scope and price based on your customer’s needs, from small businesses to large enterprises.
Take a look at these comprehensive videos, by IBM, to get detailed information on their available offerings, start looking at what your customers’ might have out of, or coming out of, warranty and talk to them about purchasing a maintenance service contract. You will become a valuable partner to your client and maintain profitability in your business with the annual revenue stream that Maintenance Service Contracts provide.
Enhanced Technical Support:
System x Solutions: