By: Mark Conrad on December 18th, 2020
Are Your Prospects and Customers Not Asking for Financing?
One Sales Rep’s Advice on Introducing the Monthly Payment Option
Two of the most common misconceptions in the technology space are:
- Your customers don’t currently finance their equipment.
- If your customers don’t ask for financing, they don’t need it.
The truth of the matter is, by making those assumptions; you may be hanging your customer out to dry by forcing them to figure out how to pay for your solution on their own. Instead, we urge you to add value by offering a monthly payment before a customer asks for it (or maybe doesn’t ask for it).
In this blog, I offer a proven strategy and share best practices I’ve learned in the many years I’ve worked with technology companies just like you.
Don’t Wait for Them to Ask, Introduce the Monthly Payment as Part of Your Process
I often hear customers say they had not considered financing an option simply because it was not offered. With project delays due to financial constraints, there are still solutions you can present to encourage customers to move forward with their IT projects, including proactively offering the monthly payment option.
80% of companies in the United States utilize financing within their businesses. Consider today’s consumption trends: many services and products guide you to a monthly payment option. Spotify, the iPhone, and Netflix are just a few examples. Rather than commit to a large, upfront expense, these service providers offer everything up on a convenient, affordable monthly payment platter.
Lead With the Monthly Payment Option
Rather than offering financing as a secondary route for your client to consider, save time and lead with it first. Your client won't feel pressured to make a cash option work by rearranging their capital budget or making business sacrifices. You can save the day by encouraging the monthly payment option. Check out this article on why the monthly payment option provides value in any economic state.
Make Financing the New Normal
Customers need technology. Technology needs to be updated. Offering a monthly payment gives your clients a predictable technology budget that allows them to get the technology they need today, and refresh to new technology as it becomes available. Once you’ve introduced the concept of monthly consumption early on in the discovery, you can continue to refer to it throughout the rest of the sales process. The end result? No surprises – just one happy customer enjoying a full scope of technology and services with an affordable and convenient monthly payment.
Three Questions to Help You Position the Monthly Payment
If you’ve decided to take this route, the next step is to begin positioning financing. Here are three questions your most successful peers are asking during the discovery to lay the groundwork for a monthly payment option.
1. How important is cash or working capital to your business?
Most companies say they use their capital to invest back into the business and help it grow. Even if their growth expectations are modest, they are still going to invest in marketing, headcount and maybe even inventory. If you establish that working capital is an important leg of their growth strategy, you can successfully position the monthly payment option.
2. What are your growth goals for the next three to five years?
If your client is growing, you can provide scalable financing options to align with their goals. Even better, once your client is accustomed to the monthly model, they can expect budgetary predictability for years to come and won't have to overcome the capital budget obstacle – all while their technology stays up-to-date, fully supportable, and aligned with their business growth strategy.
3. How would your company be impacted financially if your systems were down for a day?
Most companies rely on technology to keep their business running. Even a temporary loss of functioning technology could be costly. The prospect of downtime is a strong way to position the cost of a new system today against potential loss. It also presents the importance of long-term service contracts that protect the customer.
How Financing Impacts Cash Flow for You and Your Customers
Monthly payment options enable you and your clients to make better use out of your cash, and allow customers to allocate their on-hand cash to other areas of the business.
How Financing Impacts the Solution Provider’s Cash Flow
You, the Solution Provider, are paid upfront for the cost of the hardware, software, and installation services.
As the finance provider, we are equipped to bill, collect and remit to you the monthly Managed Services portion if applicable.
How Financing Impacts the End User’s Cash Flow
By consuming an affordable monthly payment, as opposed to a large upfront capital expenditure, your client significantly frees up their available cash. Your customers can invest that cash in other areas of the business, like marketing, hiring, or sales initiatives.
Mark Conrad is a Vendor Relationship Manager for the Communications and Data Group at GreatAmerica Financial Services. He focuses on developing strong relationships within the technology space, educating new partners and creating programs that drive reoccurring revenues and strengthen their long term business strategies in an ever changing market space. Mark has been a member of the GreatAmerica team for over 5 years, developing relationships with GreatAmerica Partners in both the Healthcare and Technology markets. Previously, Mark worked within the Healthcare industry as a orthopedic device sales representative.