"But our customers all pay cash......"
Yes it is true this is still on of the most common phrases we hear from IT resellers. However, if this is still the mindset of the IT reseller then they run a high risk of losing a large amount of business. In the world of asset finance IT represents the fastest growing sector including software, hardware and services. This means that as an IT reseller it is now essential to be able to offer finance options to your customers in order to remain competitive in the market now and in the future. You can guarantee that if you don't offer a variety of payment options your customers will be speaking to your competitors that do.
In a recent interview with the Managing Director of Baker Leasing Ltd, Charles Baker gave his views on why IT resellers don't offer leasing,
“Many resellers will tell us that they don’t offer leasing because their customers don’t ask for it. It’s a typical chicken and egg scenario. If customers don’t ask for leasing, resellers won’t offer it. If resellers don’t offer leasing, customers won't ask for it. By proactively offering leasing as a finance solution and putting a leasing option onto every customer quote you send out, you are giving customers a real choice. We like to work closely in partnership with our resellers, whether or not they have offered leasing before. One of our resellers has seen it's leasing business increase by 300% in the first year of working with Baker Leasing and switching from another leasing provider.”
The billionaire business tycoon J.Paul Getty always worked by the rule, “If it appreciates, buy it. If it depreciates, lease it.” There are few assets that a company can purchase that will increase in value over their lifetime. All technology such as IT software and hardware continually develop and improve. The same is true of all manufacturing equipment, machinery and vehicles. Even the furniture and fit-out of your premises will need regularly updating and replacing.
Paul Getty went on to explain that it is the use of, not the ownership of an asset that is important to a business. In order to grow a business all they need is access to the latest resources, production methods and tools. Owning the asset is irrelevant.
Business that choose Baker Leasing as their finance partner benefit from:
- Increased sales: proactively offering a leasing option avoids price objections and allows you to up sell additional products and services with minimal increases to the customer repayments.
- Partner Portal: sales people can be allocated individual portal logins allowing them to email branded pdf quotes to customers, submit proposals and track their activity.
- Customer retention: leasing improves customer retention with increased control of renewals and upgrades, allowing you to be ahead of your competitors.
- Increased cash flow: invoices are automatically paid within 24 hours removing the risk of bad debt and the need to chase payments.
- Improved customer service: offering leasing as an alternative to cash demonstrates that you are considering your customers business needs assisting in developing long-term relationships.
So the question remains; do you offer leasing to your customers? If not why not?