Published July 30, 2013 | Updated August 11, 2020
When financing an equipment acquisition, try to include as many other elements such as service, support, installation, and supplies as possible. Successful equipment vendors understand the power of momentum. Getting a buyer to say “yes” is almost always the most challenging part of the sales process. Once that hurdle is overcome, things begin to change. The prospect is now a buyer, and the transaction is just about ready to be consummated. This is where momentum comes into play. A buyer who has already said “yes” is clearly in a buying mode, and this is the optimal moment to offer the needed equipment, supplies, and services before the documents are signed.
Effective salespeople know how to channel a buyer’s enthusiasm into momentum, leading to additional add-on products and services, which significantly increase the value of the transaction and, and in turn, the revenue it generates. This bundled selling approach is an important consideration for any equipment vendor seeking to accelerate sales.
The first step to bundled selling is to understand what the prospect is trying to achieve, or more accurately, what problem they are trying to solve. By digging deep during the sales process, an equipment vendor can identify not only the primary business drivers behind the purchasing decision, but other related peripheral issues as well. Finding and understanding these secondary factors is an important part of bundled selling.
Once all of the buyer’s needs have been uncovered, the equipment vendor can then structure a transaction that includes everything required to meet those needs. This approach has resulted in some major developments in the office equipment industry.
For example, it was the need to solve a major problem for buyers – the escalating costs of printing and copying – that initially lead to cost-per-copy (CPC) billing. As buyers’ needs became more complex and as equipment vendors became more adept at meeting those needs, CPC evolved into much more comprehensive solutions such as managed print services (MPS) and then on to managed services.
Regardless of what you call it, bundled selling is more about a creative approach to revenue generation from the perspective of inventory on storeroom shelves. Rendered services can be a major part of any bundled sales package in the form of a contract that locks the customer into those services over a period of time. Furthermore, not every product or service in a bundled sale must come from a single vendor.
By partnering with other solution providers that serve the same market in other capacities, an equipment vendor in the office equipment space can offer more complex bundled programs that solve a wide range of problems for customers. Granted, coordinating these solutions requires a certain amount of expertise. Still, for those equipment vendors willing to undertake projects of this nature, the approach can generate a significant amount of add-on revenue.
A finance company can often be an excellent resource in facilitating complex bundled sales packages and organizing the solution delivery team. Since finance companies typically handle a wide range of transactions across many different industries, they tend to develop significant internal expertise in many different – and often complicated – disciplines. Bringing your finance company into the early stages of bundled solution development is an excellent way to move the project forward quickly and profitably.
Another added benefit of this approach is that a finance company that has been intimately involved in structuring and planning a complex bundled sale package will also be very likely to fund it as well. Understanding who the customer is, their needs, and what they are trying to achieve and then working with the different solution providers who will be delivering the program are important steps in the financing process. This kind of interaction often shortens the time required to fund the transaction. Also, this involvement keeps everything moving ahead smoothly.
Bundled selling provides tremendous benefits to the customer by reducing the long-term Total Cost of Ownership (TCO) for the purchased equipment. Everything required to operate the equipment can be conveniently rolled into one simple monthly payment. The equipment vendor benefits from the approach, as well. Bundled selling helps to control a customer by establishing long-term contracts that include supply and service agreements as well as provisions that allow for upgrades over time and that lock-in the customer. By meeting all of a customer’s needs, the equipment vendor effectively locks out the competition.
The bottom line is this: a bundled selling approach can add significant value to any equipment transaction for both the customer and the vendor.