Between 2012 – 2015, the office equipment market was becoming increasingly commoditized. Printer and copier dealers within the independent dealer channel, like AIS, found themselves in the midst of a price war. Consumers were price shoppers and providers pricing solutions the lowest would ultimately win the business. It was not a winning game for anyone and bred heavy uncertainty about where the industry was headed. With growing pressure on margins and poor customer retention, it was clear office technology buyers placed little or no value on sales relationships.
AIS knew a race to the bottom was not a sustainable strategy for their business and it certainly wouldn’t empower them to best serve their customers' long-term needs.
The Path for Change
AIS began seeking out strategies to become stickier with their customers and differentiate in a highly commoditized space. At the time, AIS worked closely with GreatAmerica as a financing partner, so when the leasing company began providing education to dealers about the opportunity in entering the IT space, they were very interested.
Gary Harouff, President and Founder of AIS, recalls one session in particular, where Paul Dippell of Service Leadership spoke about how IT providers sold solutions for cash. This was a much different approach than the financing option dealers within the independent channel used almost exclusively. Dippell had a strong belief that there would be a convergence of telecom, copier, and network solutions that would result in a hybrid dealer selling an extensive variety of office technology solutions beyond the copier. He believed if office equipment dealers were to commit to adding in IT offerings, they would be well positioned to steal market share from IT companies through three key differentiating factors: selling a monthly payment option, direct marketing sales force and their consistent high service level. AIS knew they must move fast to claim this available opportunity, so they decided early on they would no longer go to market as a copier company but focus on evolving into a technology company.
Their first step was acquiring a telecom company; they hoped a strategic acquisition might give them a leg up in a new space and open the door to including other offerings like software or managed IT.
However, even with a favorable acquisition under their belt, they quickly ran into obstacles. They realized they lacked the processes and know-how to effectively deliver these new offerings.
They realized the journey would be long and difficult without the right programs and infrastructure in place.
Building a Financing Strategy for IT
AIS soon determined the best strategy was to model themselves after an MSP, which required a change in their billing approach and more education on the front end. GreatAmerica had a rental program called Hardware as a Rental®️ (HaaR®️) which made it easier for customers to make the decision to change and commit to a new technology environment, including computers, phones, servers, software and more.
Flexibility was built in through the GreatAmerica HaaR®️ agreement; it allowed new technologies, like telecom, software, managed IT services, or document workflow solutions, to be layered in as AIS grew, scaled, and innovated their offerings.
AIS also appreciated how HaaR®️ made technology upgrades so predictable. Prior to HaaR®️, upgrades required a large cash outlay from the customer, causing many to put off necessary upgrades to avoid a large expenditure.
But the HaaR®️ financing solution made this a non-issue. The master agreement provided through HaaR®️ included the full solution and services for a lower, more manageable monthly cost, with the intent to upgrade down the road for at or near the same monthly budget. This strengthened the relationships they built with their customers and helped increase retention.
Selling the benefit of HaaR®️ was easy because it included more than just financing hardware; it also included:
- software
- installation & project costs
- recurring service charges
- onboarding expenses
Implementing the Right IT Infrastructure
Though the HaaR®️ master agreement was a huge turning point in the AIS journey, they still lacked an infrastructure that would truly empower them to properly onboard a new deal. They knew if they wanted long-term success in this arena, they needed to seek out external resources.
With a strong partner on the financing side through GreatAmerica, AIS decided to extend their relationship beyond leasing. Collabrance, a Master MSP that was a wholly owned subsidiary of GreatAmerica at the time, had an infrastructure they could use to avoid missteps and accelerate their success in the IT realm. It was a logical next step in evolving their IT offerings.
Through Collabrance, AIS could leverage Collabrance’s network operations center (NOC) and service desk to help sell, grow and mature the IT side of AIS’s business. The NOC provided the processes and accountability needed to be successful within the IT channel.
Paired with the master agreement through GreatAmerica, they were not only able to seamlessly deliver these services, but they could also seamlessly bill for them. The master agreement enabled them to roll all services into one master document, which meant the customer would receive a simple consolidated bill for all services and hardware.
The Results
With the right financing programs and a transformed infrastructure, AIS gained a strong footing in the technology space. AIS became empowered to change the conversations they were having with their customers and were positioned as a true business partner and advisor.
Through this transformation, AIS realized the following benefits:
- Shorter sales cycle
- Predictable technology refreshes
- Improved service efficiency
- Higher customer retention
- Reduced administrative expense
- Increased cash flow and margins
- Growth in the enterprise value of their business
- Improved customer satisfaction and retention
