Being in the equipment leasing industry for a number of years, I cannot tell you how many times I have heard business owners, sales managers, and sales representatives make the comment, “My customers don’t lease!”. I will then follow up with the question, “How do you know that?”. The answer is most often something like, “It never comes up”, or “They never ask for it”.
Well the truth of the matter is, the reason they don’t ask for it is quite simply that they do not know that a lease option is available, or they just don’t think of it. If you don’t ask you don’t know…
Most companies lease something!
A photocopier, their premises, vehicles, or some piece of equipment where a monthly payment option was provided in the sales process. In fact, all types of organizations lease equipment. Small and large, public and private, and profit and non-profit, and governments and related organizations such as hospitals, school boards, and municipalities. If that is the case, there is no reason that they would not consider leasing the equipment you are selling.
You can’t assume that a prospect does not lease or would not lease, given the opportunity to do so. No one has ever lost a sale by providing a lease payment, but you have to ask yourself, how many sales have been lost by not making the monthly option available. It takes very little time, and costs nothing to incorporate a monthly payment into a sales presentation or quotation, however, doing so can a substantial impact on sales.
Think about this…
If you only provide the customer with the outright purchase price, his or her options are limited to buying or not buying the product. If they choose to purchase, they have to determine how they are going to pay for the equipment.
• Will it come out of cash flow, where it will tie up working capital?
• Will they draw off of their line of credit, which may require approval by their bank?
• Do they have to approach their bank for a term loan or attempt to request a higher line of credit limit?
These are hidden objections which are not often shared with a sales person. By offering a lease option, you are solving these problems for the customer, and in effect creating a new credit facility for them.
In addition, a monthly payment is likely considered to be an operating expense and can often be approved at a lower level within the organization. On the other hand, an outright purchase is likely to fall within the capital budget, which generally has a longer approval process.
By managing the financing aspect of the acquisition, you as a sales person is actually controlling the sales process. How often has we left a quotation in the hands of a customer, thinking the sale has been made, then for no apparent reason, they change their mind. Usually, this has something to do with money.
Finally, after you have completely answered all objections about your product, leasing can be an effective closing tool as it provides you with powerful closing statements.
“Mr. Customer, based on conversation, I believe that our ABC widget will save you the time and money it is designed to do. Would you agree? If the answer is no, ask more questions about the concerns with the product and handle the objections. If the answer is Yes, use a closing statement like “Mr. Customer, that just leaves the question of your investment in the product. We discussed a purchase price of $23,167, or a monthly payment of $791 per month. Which would you prefer?” On the other hand, if the customer has committed to lease option, a great closing question would be, “Mr. Customer, would you like us to prepare the documents on a 3-year term at $791 per month or do you prefer the lower payment of $612 per month over a 4-year period?
In summary, leasing is a time tested and proven method of increasing sales. It is simple to implement and the results can be astounding. No matter what product you sell, or what industry you are in, leasing will help your business grow.