When we talk about multiyear services, it’s a natural to assume that a Cisco multiyear contract will cost more than an annual renewal. But in the longer term, multiyear contracts can actually cost less and deliver a host of other customer and partner benefits.
Selling multiyear contracts can benefit your business in a number of ways. But when we say that they add value to you and your customers, what does that really mean?
Let’s look at the end-customer benefits first. The following scenario may sound familiar: your customer does not see the value of a multiyear service contract and would rather have annual renewals instead. At the time of renewal, they find out there has been a list price increase and the dollar exchange rate has drastically fluctuated year on year. You now need to counter their objections to the overall price increase.
This could have been avoided by selling a multiyear contract in first place. On top of this, they could have benefited from incremental discounts of up to 23%, reducing the overall cost compared to annual renewals.
For you, as a Comstor partner, multiyear services contracts have a number of partner benefits.
- Increased customer loyalty: with a longer-term relationship you can engage with your customers more regularly and for a longer period, identify net-new, up-sell or cross-sell business opportunities, and play a key role in your customer’s success.
- Reduced admin and operating expenses: eliminating annual renewal cycles reduces the time spent by your employees tracking and renewing contracts, freeing up their time to focus on strategic objectives such as customer recruitment, business development or finding new business sales.
- Increased profits: increase your overall revenue with the same amount of effort as selling an annual contract, enjoy incremental discounts and protect yourself against exchange rate fluctuations, driving healthier front-end margins.
Additionally, through the Cisco Services Partner Program (CSPP) you could get a rebate of up to 5% just for selling multiyear services that can go directly to your bottom line.
Sometimes, budget restrictions come into play. But this doesn’t have to be a deal breaker as Cisco Capital can help finance multiyear deals. You can earn 1% rebate while your customers can improve their cash-flow and spread the payments across the service contract duration, all at a 0% interest rate.
Now you can see why multiyear services won’t increase the cost of a solution, what’s stopping you? Think big, think multiyear.