Make It Easy For The Customer To BuyCED Magazine, July 2006
Article Date: 07-01-2006
Copyright (C) 2006 Associated Equipment Distributors. All Rights Reserved.
Increase customer satisfaction, improve the bottom line with more financing options.
"Healthy" might be the best way to summarize the construction industry these days.
In general, contractors are enjoying an upswing in construction spending. While commercial, residential and public sector building are all strong, the Commerce Department is reporting increased total spending on construction projects. This good fortune means many construction companies are investing more money, adding to or updating their fleets to respond to new opportunities.
However, in an industry known for being unpredictable, experienced equipment dealers know now is not the time to take the customer for granted. Smart distributors are finding ways to position themselves as true partners to their customers in order to maximize profit potential.
As contractors become more and more savvy and margins continue to be squeezed, it’s more important than ever to look beyond closing the deal to the real task at hand: becoming a resource your customers count on repeatedly to meet their equipment needs. Likely, this means offering a complete package of equipment, parts, service and financing.
Improved Customer Relations
Equipment dealers are looking for new ways to close more deals, increase account control and, ultimately, add to the bottom line. While increasing sales is part of the strategy, companies often overlook a simple method of accomplishing this objective – making it easier for the customer to buy.
Are you maximizing your profitability on every customer or are you leaving money on the table? Controlling customers’ financing options is one way to help improve the bottom line for many equipment dealers.
Customers reap many benefits from working with a dealership that offers flexible financing. In addition to one-stop-shopping, financing packages that include extended warranties, insurance and maintenance add value by enhancing the customer’s buying power, providing greater flexibility and offering convenience that, ultimately, adds to your bottom line.
It also increases customer satisfaction by allowing them to leverage their budgets to acquire the equipment they need without a large outlay of cash.
The Big Picture
In addition to providing many benefits to the customer, equipment financing offers big rewards to the dealer. Equipment financing programs can:
On the sales side, any customer who expresses interest in a product seems like a good lead. However, there are many times when the question of how to pay for the new equipment prevents the sale from happening. Time lost on dead-end deals can be eliminated when financing is part of the sale, as the ability to pay is immediately considered in the equation.
- Generate larger, more profitable sales faster
- Increase account control
- Improve sales efficiency and productivity
- Improve cash flow
- Convert rental customers
- Differentiate your company from the competition
- Provide complete solutions for customers
- Control the after-market of used equipment.
Many finance companies now offer fast, easy credit and documentation processes, so you can complete a sale quickly and avoid costly processing delays. And flexible and deferred payment options can help convert rental customers who can’t be wooed by maintenance programs or extended warranties.
One easy way to establish your dealership as a true partner to your customers is to seek out the lease options that best meet your customers' needs. These days, equipment dealers don't have to look far to find a finance company, but what should you look for.
Because your customers are your most valuable assets, it's essential to choose an experienced equipment finance partner - a reputable finance company with service levels that reflect your company's ability to meet your customers' expectations.
When searching for a finance partner, consider asking the following questions:
How familiar is the finance company with the industry and your business needs?
Because every industry is different, select a finance partner that is experienced in the construction market, preferably one that has a dedicated staff to handle construction equipment financing.
Is the finance company flexible and willing to work with your management team to develop a program that will meet your financial objectives?
The best finance partners will ask questions about the goals and financial objectives of the dealership prior to entering an agreement. Be sure to select a partner that is flexible and willing to work with you to meet those goals.
How quickly can the finance company approve a credit application?
Many finance companies can approve credit applications within hours, so you can help your customers quickly respond to new opportunities.
Does the finance company require direct access to your customers?
Some finance companies prefer to work directly with your customers to close a transaction and require direct access, while others allow you to maintain account control while providing your sales team with the support they need to close the transaction by themselves. Be sure to consider whether you're willing to provide a third-party finance company with access to your customers.
Is the finance company willing to provide marketing and sales support for your sales team?
A new trend among some finance companies is marketing and sales support to help dealers promote and explain financing.
Is the finance company a financially stable, long-term business partner?
Many finance companies are affiliated with some of the nation's leading financial institutions. Be sure to select a reputable partner that is financially stable and has a history of successfully working with companies similar to yours.
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