District Computers struggled to remain within its customers’ tight budgets while still delivering the best solution. The firm often eliminated beneficial but non-essential pieces from its projects or cut into its profits in order to close deals. By taking advantage of Microsoft Financing, District Computers has increased average sales by 50 percent, accelerated the sales process by weeks, improved cash flow, and deepened customer relationships.
District Computers is a Microsoft Gold Certified Partner and Small Business Specialist. The firm’s owner and six consultants provide technology consulting to customers ranging from one-person businesses to companies with almost 100 employees.
District Computers maintains strong relationships with its customers. “Our average customer has been around more than seven years,” says Steve Hall, Chief Executive Officer for District Computers. “I encourage my customers to make their decisions based on where they want their companies to be in a few years. Our goal is to be our customers’ long-term technology partners.”
Budget is a primary concern for the firm’s customers. “Most small businesses don’t have money set aside for things like new hardware, and it has been tough for people to find financing,” says Hall. Customers who did procure financing could finance only the hardware portion of their projects and still had to find the money to cover the software and services costs. This has resulted in longer sales cycles, and Hall found himself paring projects down to the bare essentials. For example, most of his customers would decline Microsoft Software Assurance, which provides valuable benefits such as upgrade options, because they could not afford the extra cost. At times, Hall cut into his own profit margin in order to close deals.
Hall carefully considers before taking on larger—and more lucrative—projects because of the risk of investing too much of the firm’s own operating capital into any single project. “We struggled for almost three months while we waited to be reimbursed by a customer,” says Hall. “If you can’t pay your contractors, you have to do all of the work yourself. I never want to have that happen again!”
District Computers considered leasing options and bank loans for its customers but found the choices unsatisfactory. “If it’s difficult, or slows the sales cycle, why would we do it?” Hall says.Solution
In February 2010, Hall visited the Microsoft Financing Partner Network online and learned that he could offer his customers financing with PNC Equipment Financing through SmartPay. Hall was particularly interested when he learned that he could offer financing options to customers that could cover the cost of hardware as well as licenses and his firm’s services.
||We had one customer who was deliberating for six months on a project. We introduced Microsoft Financing into the conversation and they signed the deal two weeks later.
Chief Executive Officer, District Computers
The timing was ideal. One of the firm’s customers needed to replace its network but did not have the U.S.$15,000 needed to pay for the project. “They didn’t have any cash on hand, but they had great credit and great receivables,” says Hall. “We ran it through Microsoft Financing and my customer found that they could get everything they needed for under $300 a month.”
Hall was impressed with how quickly he was able to include Microsoft Financing quotes in his bid process, and he has found the approval process to be equally smooth for his customers. “I can go to the Microsoft Financing site and get a quote in 10 seconds,” he says. “It’s very simple to offer a monthly cost to my customers. I can run the numbers quickly and ask them, ‘Well, instead of $20,000 upfront, would you rather pay $400 a month?’, or whatever the cost may be.”
District Computers has financed seven deals through the Microsoft Financing program. “The projects that we build a financing deal around tend to be the hardware refreshes, and the sales that we add as a result of using Microsoft Financing are typically ancillary servers and software licenses.”
The financing deals that Hall has arranged tend to be divided fairly evenly between hardware, software licenses, and his firm’s managed services. Hall now includes Microsoft Financing in his standard bid process. “One of my initiatives this year is to lead with solution and value and close with cost and financing,” he says. “We’re going to make sure that Microsoft Finance is embedded in our bidding process.”Benefits
District Computers has seen significant results from including Microsoft Financing in its bid process. Hall attributes the program with helping his firm to close more sales at a faster rate, improve the firm’s cash flow, and deepen the relationship with customers.
Hall says that deals he completes through Microsoft Financing tend to be 50 percent larger than non-financed deals. “Microsoft Financing enables our customers to get the whole solution, instead of doing half now, half later,” says Hall. He points out that he has been able to add Software Assurance to every financed deal.
Speeds Sales Process
For District Computers, deals that include financing close weeks faster than non-financed projects. “We had one customer who was deliberating for six months on a project. We introduced Microsoft Financing into the conversation and they signed the deal two weeks later,” says Hall.
Drives Greater Cash Flow
Being paid in advance has enabled the firm to pursue bigger projects without the risk of becoming over-extended. “Microsoft Financing allows us the flexibility to go after business that we couldn’t even consider previously,” says Hall. “Because I can close deals more quickly, I’m no longer hedging my deals and squeezing pennies out of my own pockets. I’m able to stick to our value a little more.”
Strengthens Customer Relationships
Since incorporating Microsoft Financing into its payment options, District Computers has developed stronger relationships with customers. “With Microsoft Financing, we can get people to look at us differently,” says Hall. “Being able to talk about how our customers are doing their purchasing—it positions us as an overall partner. We’re not just an IT partner, but an advisor to the business.”
For more information about other Microsoft customer successes, please visit: