The world’s spoiled for choice these days. Everywhere, where there used to be one or at most a few options, there’s a half dozen, dozen, or more choices laid out like candy.
Funding business equipment acquisitions is no different. Not that long ago, cash was the dominant means of acquiring equipment for many businesses, followed by loans and revolving credit.
Those days are gone for a clear majority of businesses. Consider this: according to the Equipment Leasing and Finance Association, plant, equipment and software investments amount to nearly $1.5 trillion in economic activity each year. 62% of that, around $900 billion, is financed, a figure that rises annually.
Cash used to be the smart kid in class, the one with its hand up all the time. Then financing came to school, sat in the front row and became the teacher’s new pet.
Leaving the reasons for that shift aside, the immediate takeaway is that dealers and resellers need to at least offer some form of financing if they hope to compete. But just a token effort at making financing available isn’t enough in the world where option after option is a click, tap or call away. Dealers and resellers now need to integrate financing into their complete offering.
Customers today see financing for what it is – a valuable budget management tool. Financing is no longer the last one picked in gym class, an alternative you grudgingly accept only when you’ve got to have it now and cash is off playing for someone else.
Rather than looking to cash first, customers are laying all of the funding options on the table and choosing the one that’s best for a particular application at a particular time and place. Sometimes it’s cash. Sometimes it’s a loan. In many cases, it’s a fixed rate lease.
So what? What difference does it make for dealers and resellers? You just want to sell equipment, regardless of how a customer pays for it or who ends up financing it.
If you took that position – many dealers and resellers still do – you’d be missing an opportunity. Actually, you’d be missing several:
- The chance to stay on your customer’s side of the table. By giving your customer an array of financing options, you expand your consultative role. You’ve been a trusted advisor on equipment; now you’re also a trusted advisor on fitting it into the budget. You’ve been on the customer’s side of the table during requirements gathering, solution design and equipment selection. Why leave it and walk around to the far side of the table in the payment phase? Why not stay on the customer’s side by offering a variety of financing options and helping to figure out which is best for the situation? Do that and in the customer’s eyes you’ve gone from a source of equipment to a source of the entire solution
- The chance to keep your customer’s eyes on you. Your customers want financing options. If you don’t offer them directly, they’ll find those options somewhere. Even if just for convenience’s sake, they’d rather not go looking, but it’s a forced choice. And every time your customer loses focus on you to hunt for outside financing, there’s a chance you’ll lose the sale, just when you thought you had it locked up. The customer may have had every intention of simply securing financing and then coming back to you with it, but their search too often uncovers not just financing options, but another dealership that’s integrated them into a complete solution offering that’s hard to pass up. The deal slips away and the customer’s probably not coming back in the future
- The chance to create another bond in your relationship. By offering a variety of alternatives to cash, you help the customer afford not just the equipment itself, but the total cost of a long-term productive solution. Delivery, installation, ongoing maintenance, service, training and everything else can be financed for a single monthly figure. Customers know where they’ll go for everything needed to keep the equipment humming over its lifespan. And they know how they’re paying for it right from the start, which can be a huge contributor to their peace of mind. And the chances are good that when the equipment is used up (or has been surpassed by new technology), the customer will come back to you for a replacement. Why not? They’ve been dealing with you all along. It’s the path of least resistance. And assuming the service and support has been outstanding, there’s no reason not to come back. The solution is solid and the relationship is solid. Why mess with success?
Today’s equipment buyers want financing options. More than that, they need them to stay competitive. And in many cases they prefer to get those financing options from you. So make the options available. Become not just a source of equipment, but a source of complete, affordable solutions that make customers’ lives easier now and keep them coming back again and again.