Longer MPS Sales Cycles Pay Off in the End

A VAR we connected with recently has an answer for sales people who complain about the longer sales cycles sometimes required to sell managed print services.

 

First, he points out that a service-based model has sustained the company’s short-term business and that contract-based recurring revenue has helped lessen the negative impact of the economic downturn. Then he asks sales people to think about life before some commissions were based on recurring revenues. “Remember the days when you started the first of every month at zero,” he says. That’s often enough to quell frustrations.

 

In this company’s case, all reps have a first-of-the-month billing for existing managed print services customers, which jumpstarts revenue. It’s also great for morale and the company’s overall financial health.

 

But this strategy does take a solid commitment by senior managers and sales people. According to research by channel researcher IPED, 20 percent of new mid-sized customers require an average sales cycle of less than five weeks, while another 47 percent take five to 13 weeks to sign the contract. Odds are better with existing mid-sized customers, with 41 percent jumping on board in under five weeks and 31 percent committing by week 13.

 

That’s not bad considering the IPED also found that average first-year revenues for MPS hit $22,700 for each deal.

 

Managed print veterans highlight some fundamental techniques for shortening the sales cycle:

  • Schedule multiple meetings to discuss end-user business benefits of managed print
  • Prove the MPS concept and your ability to deliver on it with a single, pilot device
  • Get an entrée to a high-level executive who can give a thumb’s up to managed print
  • Be persistent.

 

“With managed print, you get a fair number of people who initially say no, not now–and then all of a sudden they are ready,” says David Polzin, owner of BusinessWare Solutions, a Xerox Peak Partner in Hutchinson, Minn.