By: Taylor McDonough on June 9th, 2021
Best Practices when Presenting a Monthly Payment Option
Congrats! You’ve finally gotten a prospect or existing customer ready to make a technology upgrade. At this point, you’ve likely had a few conversations about their current environment and have provided recommendations to the upgrades they need within their current IT infrastructure.
As a sales rep, I understand you may feel like you’re walking on thin ice not wanting to make a wrong move. You want the deal to keep moving forward as seamlessly as possible. In the back of your mind, you may wonder how they will react to the total cost of the upgrade and if it’s something they have the budget for this year.
I can’t promise you that this article will lead you to a close, but I can tell you this: I’ve had customers tell me they were able to win a deal from a competitor because they offered a finance option – their client was able to upgrade their technology sooner because a finance option was presented.
In fact, in a survey, 64% of technology buyers stated it was easier to make a decision to purchase when a monthly payment or finance option was presented.
If you want to shorten your sales cycle, decrease DSO, and make it easier for your customers to say YES – keep reading for best practices that will enable you to do just that.
Best Practice #1: Bring up Financing Early and Often
Don’t wait to mention financing until you’re at the time of proposal. Make sure your prospect or client is aware upfront that financing is an option. This is important for a major reason, demonstrated by an example I recently experienced:
I was looking to purchase a stationary bike and took to Google to look through different options. Most sites only listed a total cash price, and I had thrown the reality of purchasing a bike out the door, as I couldn’t justify the cost. That was, until I came upon a site that offered a cash and a monthly payment option. Now that a payment option was on the table, I started to think through my monthly budget. The monthly cost of the bike was similar to what I was currently paying for a gym membership. Quickly I realized through a monthly payment, owning a stationary bike was realistic.
Differentiate from competition. For a long time in the IT space, offering financing was a differentiator from competitors. At this point, presenting financing may be what’s needed to level the playing field. Your competitor may be offering a monthly payment, and you don’t want that to be the reason you lose a sale.
Long story short – make sure your clients know it’s an option by bringing up financing early and often in your sales process.
Best Practice #2: Utilize Strategic Questioning to Position Financing
As your clients’ trusted technology advisor, you likely facilitate strategic conversations with them to learn more about their business and growth goals so your team can best align technology solutions that supplement their initiatives.
That said, when positioning a finance option in your conversations, there’s no fancy lingo or talk tracks you need to learn. You can continue facilitating similar discussions and tee up the finance option.
The next time you want to bring up the finance conversation with your clients, skip the questions “How do you plan to pay for this?” and “Do you want to lease or pay cash?” These are straight, to the point questions, but do not necessarily position you as their trusted technology advisor.
Instead, consider using a few of these impactful, needs-based questions that will differentiate you from competition. Here are some ideas.
What are your growth expectations over the next three to five years?
If your customer is looking to grow, you can provide finance recommendations that will grow with their plans. Financing will allow them to conserve cash and utilize it in areas that supplement growth; such as, hiring employees or advertising.
Optional talk track: “In our previous conversations you outlined your growth initiatives and the areas you plan to invest in, like advertising and hiring employees, in order to meet those growth goals. That said, we’ve added a finance option to your quote as we know it’s important to preserve funds cash for areas of growth.”
How important is cash or working capital to your business? Why?
Confirming how important cash or working capital is to the business is a crucial step in the sales process. If you already established it is important to them to have working capital, you can say, “I understand working capital is important to your business, which is why we’ve added a finance option to your quote. Financing will allow you to preserve your cash and keep your technology up to date.”
What are your greatest concerns for making this decision?
You need to understand the customer’s mindset going into the transaction. This final question will help you overcome objections before the concerns become objections. If one of their concerns is cost, you can emphasize how financing will allow them to conserve their cash/bank lines and allows them to get up to date with the technology they need today instead of waiting until a system is down.
Best Practice #3: Don’t Overwhelm Clients with Too Many Options
Have you ever sat down at a restaurant, opened up a menu and were paralyzed with too many choices? It’s great having options, but too many of them can overcomplicate the sale. With financing, here’s a rule of thumb: if you are quoting financing, stick to one or two options. Select the options you recommend and talk through the options and why you selected them. For more on quoting best practices, check out this hub of information.
For example, you may present your client with a 36 month, Fair Market Value option. When presenting this option, state you are presenting a 36-month agreement because 36 months align with the usable life of the technology and the length of the equipment’s warranty. You can also explain you’re presenting FMV as it provides them flexibility at the end of the agreement to either return the equipment, buy the equipment, or upgrade into new gear.
Best Practice #4: Educate Clients on their Purchase Decisions
Educating your clients on their purchase avenues will not only position you as their trusted advisor, it may also help shorten the sales process as it allows your clients to easily navigate the best route to acquire their new technology.
Your clients will likely need to decide between these three options when purchasing technology; lease, bank loan, or cash.
For a comprehensive look at the advantages and disadvantages to each purchase option, check out this blog.
More Sales Tools for Financing Success
In tandem with utilizing the best practices highlighted in this article, I encourage you to download the Sales Enablement Toolkit, where you can have access to:
- The benefits of financing
- A comparison between a lease, loan, and bank purchase
- 12 questions to differentiate your sale
- Talk tracks and objection handling tips
Visit our Resources page for more tools to help your team master the monthly payment strategy.
Taylor McDonough is a Director of Vendor Relationships in our IT and Communications Unit, where she also directly supports the IT Nation Evolve community. Taylor started at GreatAmerica in the marketing department, where she identified her passion for helping customers reach their business goals.