Published September 21, 2015 | Updated July 30, 2020
Not that long ago, cash was the preferred means of acquiring equipment for many businesses, followed by loans and revolving credit. But when pressures on cash are greater than ever, more and more businesses are looking to financing first on at least a portion of their equipment and software.
Today’s businesses want financing. Many depend on it. And they’re doing business with dealers that offer it. So especially in times like these, dealers need to offer at least some form of financing if they hope to compete.
But merely making financing available isn’t enough in the world where option after option is a click, tap, or call away. Dealers now need to integrate financing into their complete offerings.
Customers today see financing for what it is – a valuable cash management tool. Financing is no longer an alternative you grudgingly accept only when you’ve got to have it now, and cash is limited.
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 difference does it make for dealers? 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 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. Many would rather not go looking, but if they have to, they will. 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 also 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.