“Our industry is at an odd crossroads. Commoditization is killing us – eating margins. Most customers don’t understand or value managed services. IT capabilities are a slow go. Customers don’t need the approach we’ve built our businesses on, change is slow, and margins are disappearing.”
– CFO of a national dealer that has acquired 15 smaller dealers in the last seven years
Change is inevitable and certain, yet somehow almost completely unpredictable. Old ways of thinking can’t preserve office technology revenue streams for too much longer. Now is the time for new ideas and bigger thinking in almost every functional area of your business. Now is the time to rethink what a customer finance program should be.
“Fast, cheap, easy financing with online tools from a financially strong provider, and the next guy can approve more and be more flexible than the one we have. That’s every sales pitch in the industry.”
– Sales manager from a Midwest regional dealer
And it’s also the first thing dealers and manufacturers look for in a program alternative. But it’s not what you’re looking for. Listen to these dealers:
“They must treat our customers like each lost dollar of revenue is a real impact felt. Because for us– it is like that. When you find one of those lease companies, let me know will ‘ya.”
“They must demonstrate that they can bring unique and disruptive growth ideas, solutions, or products to the table. Without that, it’s simply not worth changing because the transition is too hard, and they all look alike.”
You want more, but after years of seeking alternatives, providers are still talking about fast, easy, cheap, and approving everyone. So in the absence of a real alternative, you default to the commodity aspects of evaluation and end up staying with your incumbent because transitioning the relationship is too hard when no real value has been demonstrated. Here are some alternative measures:
- Evaluate their willingness to integrate their systems, people, and solutions with your systems, people, and customers
- Evaluate their ability to offer new solutions, expanded finance alternatives for your customers, and even funding for your own business to make them a more valuable part of your capital stack
- Talk to their customers. Get references
- Understand how easy they make the transition. If changing to their platform is too hard, operating within their platform will likely be too hard
- Ask them for disruptive and breakthrough ideas for your company. Put pressure on them to be a problem solver out of the gate
Isn’t it time for finance providers and finance programs that offer more? Isn’t it time for your own business to take advantage of strategic counsel and solutions from the finance company that offers your customer financing?
If you don’t dare to elevate the expectations of your providers, you might stay on the path of old thinking and commoditization.
At LEAF, we help office equipment dealers think bigger and offer solutions that reach far beyond customer financing.