Can OEM dealers and other sellers of heavy equipment increase their sales by being more proactive about their available financing and leasing options? In my long experience in the equipment financing industry, the answer is a resounding \u201cyes\u201d.<\/p>\n
Whether it\u2019s a single OEM heavy equipment dealer who offers a financing program through the OEM, or a dealer\/retailer who sells multiple lines and\/or used equipment and has several financing options available, all can raise sales by simply making financing more visible to buyers.\u00a0 \u00a0<\/p>\n
Over the years, I\u2019ve worked with hundreds of heavy equipment dealers and retailers, and when it comes to offering payment options, they fall into two categories: Reactive and Proactive.<\/p>\n
The dealers and retailers who are reactive about offering financing generally rely on the financing program itself to do the advertising. Sure, they will outwardly offer a financing option when the OEM\/financing partner decides to have a special and sends literature or banners,. Otherwise, they are content to have a financing brochure on the table and let customers ask about monthly payments. On their websites, these dealers may mention financing somewhere, but it\u2019s usually limited to \u201cask us about it\u201d.\u00a0\u00a0<\/p>\n
Mind you, there is nothing wrong with this way. In fact, this hands-off approach is how a good number of dealers and retailers use financing. A prospect comes in, looks at machinery, and the salesperson sells the machinery itself. Financing might<\/i> be brought up if the salesperson asks \u201chow are you going to pay for this?,\u201d but otherwise, they are comfortable letting the prospect ask about it and\/or supply their own bank financing.<\/p>\n
Then there are the more proactive dealers and retailers. They (correctly) surmise that almost all new and used heavy equipment sales are financed in some form anyway and make it a part of their sales process.<\/p>\n
Whether they exclusively use the OEM financing program or have several different credit options, their websites will have their financing option(s) listed prominently. They might have a downloadable or interactive credit application online, or depending on their finance partner\u2019s capabilities, even offer instant payment quotes on a \u201cfinancing\u201d page. In their showrooms, some will have an \u201cas low as xyz a month\u201d sign on every piece of equipment. And perhaps even the same on the website.<\/p>\n
Many proactive dealers will have their salespeople mention financing every time. Some have reached out to the OEM\u2019s program or their third-party finance partner and worked out a typical payment their salespeople can quote every day (\u201cif you qualify, you can get this for XYZ a month \u2013 would you like me to check for you?\u201d)<\/p>\n
These dealers have taken a page from automobile dealerships and simply assume every customer is not only going to finance the purchase, but they are going to make the monthly payment a key part of the sales process. This is not a bad assumption in 2021, as nearly every company in existence is looking to preserve capital.<\/p>\n
\u00a0A 2016 Equipment Leasing and Finance Association study stated that 78% of equipment purchasing firms use some form of equipment financing or leasing. This shouldn\u2019t be surprising to anyone.\u00a0<\/p>\n
Anecdotally, I\u2019d put the number much higher, especially in 2021 as we emerge from a business-altering pandemic. In short, lessons learned, combined with an increasingly headline-driven economy that can turn on a dime (or a sneeze), have caused companies to look hard at their cash flow. Unless they cannot get financed at all, the thought is it\u2019s better to use someone else\u2019s money for capital expenditures and keep their own in the bank.<\/p>\n
This does bring up the question of why some dealers and retailers are not more proactive about offering payment options. The largest rebuttal I get is being proactive about payments seems \u201cpushy\u201d. But as I\u2019ve mentioned, financing is almost certainly happening anyway<\/i> on these purchases \u2013 it just happens away from the dealer\u2019s desk, or (much worse) with another dealer.\u00a0<\/p>\n
Personally, I say it\u2019s convenience, not pushiness.\u00a0 In my experiences in working with vendor partners over the past 30+ years, the more proactive they are about payment options, the more they sell \u2013 it\u2019s as simple as that. It makes it easier to buy, and let\u2019s face it, \u201c$XYZ a month\u201d always looks better than the full retail price.\u00a0<\/p>\n
Let\u2019s wrap this up with five tips that can help heavy equipment dealers and retailers be more proactive about financing. Whether you work with an OEM program or a third party (or both), doing one or more of these should help increase sales on both new and used heavy equipment.<\/p>\n
1)\u00a0\u00a0 <\/b>Make Sure Your Financing Option is Clearly Stated on Your Website<\/b><\/p>\n
\u00a0<\/b>Have a link in the main navigation, and a \u201cfinancing\u201d page. Even if that page only mentions that you have an OEM program available, the more prominent it is, the better.<\/p>\n
\u00a02)\u00a0\u00a0\u00a0 <\/b>\u201cAs Low As\u2026\u201d<\/b><\/p>\n
\u00a0<\/b>Ask your OEM or financing partner about offering an \u201cas low as $xyz a month\u201d right on individual models. It\u2019s a great sales tool.<\/p>\n
3)\u00a0\u00a0\u00a0 <\/b>Hard Copy Collateral is Helpful<\/b><\/p>\n
\u00a0<\/b>If you print your own brochures or similar, mentioning financing options there will not hurt you. And make sure anyone coming into your showroom knows financing is available.<\/p>\n
\u00a04)\u00a0\u00a0\u00a0 <\/b>Have Your Salespeople Quote a Payment Every Time<\/b><\/p>\n
\u00a0<\/b>Your salespeople would probably love quoting a payment to every prospect. If at all possible, encourage them to do so. Give them the tools to mention monthly payments, and even \u201cassuming good credit\u201d ballpark amounts.<\/p>\n
5)\u00a0\u00a0\u00a0 <\/b>Look Into Advanced Strategies<\/b><\/p>\n
Your OEM and\/or financing partner may have \u201cno payments until next year\u201d or \u201cskip your first payment\u201d capabilities. These can be attractive to buyers.<\/p>\n
<\/b><\/p>\n
Years of our own internal data tells us having a financing option is a proven winner, but to get the most out of it, it needs to be done proactively \u2013 the more ways a heavy equipment dealer or retailer can put monthly payments in front of buyers, the more they will sell.<\/p>\n
Chris Fletcher is the vice president of National Accounts at <\/i>Crest Capital<\/a> <\/a>which offers small and mid-sized companies financing for new and used equipment, vehicles and software, as well as offering equipment sellers a simple and risk-free financing program.<\/i><\/p>\n \u00a0 <\/p>\n \u00a0<\/p>\n<\/p>\n \u00a0<\/p>\n","protected":false},"excerpt":{"rendered":"