Tech products are purchased if they’re affordable – Dr. Muneer Muhamed

Did you buy that villa in Galle with a bag full of cash? How about when you picked up your new car? And did the landlord ask you for a year’s rent in advance when you signed the rental agreement for your apartment?

In each of these situations, you probably calculated a reasonable monthly payment before determining the price you could afford. In essence, you developed a cost-benefit or value analysis based on your monthly expenses and worked out the affordability factor.

This affordability analysis is not dissimilar to the financial analysis many of your customers could undertake (but often don’t) when planning to invest in new computer technology or IT equipment. Instead, they often check the annual capital budget, see what’s in it and settle on a price they can afford.

The client then becomes fixated on the price.

Imagine that you want to buy a car. You touch, feel and test drive it before deciding on the vehicle of your dreams. You approach the salesperson apprehensively about the impending negotiations and the first question he or she asks is: ‘What are you considering as a monthly payment?’

By simply practising the art of affordability selling, the salesperson is getting you to think about value on a monthly basis instead of the total cost.

However, affordability selling in the case of technology is somewhat different.

The primary concerns of buyers today are obsolescence and ROI. In many cases, the technology becomes obsolete by the time it’s been implemented throughout an organisation. This makes the art of affordability selling of technology more challenging.

In the tech industry, this process lets you position the price of a solution rather than a product so that your clients can easily relate to monthly operating expenses.

The key to successful affordability selling of technology is to shift the conversation away from the price of the product early in the sales process. Instead, focus on the value of the business solution, clarifying whether or not it fits your customer’s needs.

Many buyers of computers seek to assess the bottom line, which includes service, tech support and training. By shifting the focus away from the price of the box, software, and education and training, and concentrating on offering a monthly price for a customer’s computer needs, you’re adding a level of sophistication to your selling.

And you can expand and broaden your product offering, elevate the discussion and talk about the concerns of the business in question.

Statistics suggest that it’s five times more costly to acquire a new client than it is to maintain a business relationship with an existing customer. By virtue of its terms and conditions, affordability selling – and leasing in particular – creates a relationship between you and your client that a simple sale can’t achieve.

With upfront sales, the buyer purchases a product, walks out and ends the relationship with you. The engagement was successful and you sold your product… but the relationship was brief. With financial selling however, you create an ongoing relationship with your customer.

Establish regular communication with your customer base through monthly billings, which you can use as mini-newsletters to keep clients informed about your latest product offerings. Your billing statements then become the foundation for a database from which you can sell add-ons, upgrades and additional product families.

Unlike a traditional product sale, you know when your client will need new computer equipment – i.e. at the end of a lease. By establishing relationships with your customers and communicating regularly, you have greatly reduced the chances of them turning to competitors the next time they’re ready to purchase.

The benefits of financing tech solutions are that customers can upgrade their technology without having to sell their existing equipment, they have a single source to turn to for support and supplies, and can have a solution to their computing needs based on a monthly operating expense – without having to tap into their capital budgets.

One of the primary benefits of leasing or financing is flexibility, which a cash sale cannot offer.

Let’s say your client is launching a business and needs computer equipment. Cash is tight and will be for a while. But according to the business plan, growth will be steady. Your client can’t afford the outright purchase cost but can manage a monthly payment.

But even the monthly payments will be difficult for the first few months. A balloon lease enables your customer to gradually increase the instalments over the term of the lease in step with the company’s expected growth.

Indeed, leasing provides flexibility to tailor a plan that meets the needs of your client. And this process is suitable for any business.

The best companies have shifted their thinking away from being solely manufacturers of products to producers of value-added solutions.