Street Smarts

No matter how large, there is no way for a telecommunications vendor to reach every prospective customer, especially at a time when you’re creating and selling myriad solutions and technologies.

Now that corporate budget-strangleholds have loosened, resellers are spending much of their valuable time waiting for approval on the many requests for proposal (RFPs) and bids they have in-play across existing and prospective customers. Depending on the size of the potential contract, the client’s level of comfort, or the complexity of the implementation, the sales cycle can take mere hours—for the download of software—to months. While some studies suggest B2B sales cycles are decreasing, it’s important that you further reduce the time it takes for customers to make their decisions in your favor. After all, even though the cycle seems to be shortening, it still takes 50 percent of customers between six and 12 months to make a B2B purchase decision, found Marketing Sherpa.

For many companies the purchase of IT equipment, telecom systems or software can be a challenging task.  First, you have to make the business case for the need and then you have to find the budget and finances to make the purchase happen.  For many companies this is where the initiative dies.  The costs of these equipment purchases can quickly cut into operating capital for many companies.  In today’s uncertain credit markets, it can be challenging for many companies to find the credit to make these purchases happen.  Of course, without the ability to fund growth how are these companies supposed to grow and improve performance?

The forecast is looking good for most data, networking, and communication equipment providers. Corporate profits are on the rise coming in at 7.9% in Q3 2011 over the same period in 2010.  Solutions such as VOIP, convergence of technologies as well as fiber provide the opportunity for most to see significant increases in 2012.  This is especially true since most of the marketplace has not been in a financial position to update aging technology due to cash flow or company budget constraints.  Tides are changing in 2012 and it’s the communications and data executives that place themselves ahead of the curve that will see the greatest positive change.

It is estimated that worldwide spending on enterprise technology, a driver of demand for computer equipment wholesalers, could reach $2.7 trillion in 2012, a 3.9 percent increase from the previous year, according to Gartner. It was the eighth consecutive month of year-over-year employment increases for the computer and software wholesale sector and the sharpest rise of 2011.  While the marketplace continues to grow, wholesale prices for computers and peripherals have steadily declined.  Prices charged by US manufacturers fell by 30 percent between 2003 and 2008.  Increasing reliance on cheaper foreign production can be expected to keep pushing prices lower.

Client Close-Up

So now the question becomes do I finance my equipment purchase with an operating lease or a capital lease? 

Although software has reshaped many traditional business practices, organizations continue to use the same, tired net-30 terms to finance their IT and software projects. Yet this approach forces your clients to pay in full for solutions that can take up to a year—or more—to deliver a return on investment. And this, in turn, can delay some customers’ purchasing plans.

By Dave Rhoads

Providing Customers with the Latest Products Without the Big-Ticket Costs