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The problem is, it costs what it costs, and can you
take the risk of financing your customer, in a competitive enviroment, where you
could loose the client on any given day to competitors?
Its not worth the risk to me. Another way to
approach the problem is the give free install, but make them pay upfront for the
year. No buddy cancels a service they've already paid for, and doesn't add
cost for them to keep using it during that term. That principle worked
well for DialUP. $9 a month for a 2 year contract. Few people flinched, most
people called it a benefit, because it cost them more than $9 a month in
time to write and mail a check every month. I'm never going to
finance the costs to get people installed, in a competitive market, without a
QUICK ROI for doing so, its jsut to risky. I'd finance Hardware in a heart beat,
it can be reused, and its value secures the financed dollar amount. The
customer has got to put skin in the game upfront, or they got you buy the
balls. They'll change in a heart beat. I believe a level
playing field needs to be created for the
provider/subscriber relationship. It fair to say, in order to collect
your monthly fee every month, I'm going to have to provide you good service
every month, so you keep subscribing. But its not fair to say, I (provider)
invested $200, and if I don't do every thing you (customer) asks, you (customer)
are going to cancel and screw me out of my $200 investment.
There is a time and cost to isntall labor, you need
to make sure you will be able to recover that cost upfront, or you are in a risk
situation. You can reword it anyway you want to the customer, as long as
at the end you are taken care of. For example, What if you said you were going
to charge them $200 for a down payment on the lease hardware, and give them free
install labor. Well, you could get a lease that did not require a down
payment, and put the down payment in your pocket instead to pay for labor.
Then gear gets financed in full. Thats a doable cash flow model.
If a customer won;t pay your costs with a prompot
ROI, you need to get in another business or market, is my personal opinion.
There is nothing wrong with getting your compensation over time, as long as it
is guaranteed that you will get that compensation over time. If there is a two
year ROI, and you have a 2 year Contract, that may be good enough to protect
you, but is it? If the broke the contract, what would you do about it? Go to
court or collection, over $200? Not likely.
Investment and risk, ONLY should be taken if
matched with equal potential. If the investment was for a 100 user complex,
well, the odds are now better the ROI will come and worth the
investment.
I sympathise, that $200 install may deter
prospects. You got to find a way to get it. The only thing that has worked for
me in those situations is given free years of service with it, as a REBATE, or
made them pay upfront for the year when I waived install fees. But even then,
I'd tack on an extra $10 a month to cover the rental fee of the equipment.
Or even if it was pay upfront for first 6 months, that may be enough to reduce
liabilty, if you lock them into a 1 year contract, or add a disconnect fee in
the terms. What I do is I turn away the work that doesn't pay my target
work, and then if there is a day, that my guys have nothing to do, (they are on
salary), I go down the list of cheap prospects and tell them I am doing a 1 day
special for free install, if they take it today. Sometimes I tell those
clients that I have a 30 install period, and they will be called within 3 weeks
to schedule install. And give them 24 hours notice when I can come. People who
pay the price get sent to the front of the list, and usually get installed
within 48 hours.
Tom DeReggi
RapidDSL & Wireless, Inc IntAirNet- Fixed Wireless Broadband
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