As an equipment dealer, your goal is to sell more equipment. But, this isn’t always easy. That’s because customers can’t always afford new equipment, despite the advantages it may bring to their business.
Thankfully, financing is an option. It shrinks a significant investment into affordable installments that fit within your customers’ budgets. So, if you want to sell more equipment, equipment leasing will help.
Check out these 11 tips from JLG Financial™ and its lending partner in Canada, CWB National Leasing, to help you utilize leasing to its full potential — and bolster your bottom line.
Tip 1: Take the focus off price
Let’s say your customers need to upgrade their equipment. They know what equipment they need but the upfront cost scares them away; this is also known as sticker shock.
Paying upfront for equipment can deplete cash reserves or tie up lines of credit, but with financing, you can spread the equipment cost over years so it fits within your customers’ monthly or seasonal budget. Another added bonus: taking the focus off price eliminates the price barrier and leaves your customer free to focus on the features and benefits of your equipment.
Tip 2: Close sales with options
When closing a sale with leasing, suggest two different leasing plans to your customers and ask which one they prefer. This will bring any uncovered objections to the surface and you can better tailor a lease to fit their needs.
Tip 3: Make add-ons affordable
Including additional features to your equipment sale with leasing won’t scare away customers. For example, a $500 equipment feature could add less than $10 to a customer’s payments over the term of a lease.
Tip 4: Offer skip payments
Some equipment lessors offer payment plans that delay your customers’ payments for a few months, sometimes known as Skip Payments. Here’s how it works: customers get your equipment now, you’ll get paid from the lessor and your customers will make payments when they put their equipment to work in a couple of months.
Tip 5: Frame your questions — ask for an opinion rather than a decision
Framing your questions makes a difference. We’ve found the best way to know if the customer is ready to buy is to ask a series of opinion-based questions. Then, entertain a buying decision when a customer’s answer implies they’re ready to purchase.
For example, the question could be: In your opinion, would a monthly payment plan or a semi-annual payment plan work better for your business?
An answer to the above question will provide insight into your customer’s cash flow cycle. From there, you can structure lease payments to better match revenue stream. The goal here is to glean as much information as possible and then make equipment acquisition seamless.
Tip 6: Upgrade more frequently
Wouldn’t you love to have a device installed on your equipment that notifies customers when it’s time for an upgrade?
Lessors structure lease terms based on the age and/or the condition of the equipment and will speak with customers as leased machinery nears its lease expiration. This enables customers to get newer equipment more often and usually have similar lease payments. This means more repeat customers and increased sales for your company.
Tip 7: Able to pay as they go
Customers acquire new equipment for one of two reasons: To generate revenue or to reduce costs.
But, there’s a financial disconnect here. Customers use equipment over time, generally years, yet some customers would rather pay for this utility in advance with capital or lines of credit.
Leasing allows your customers to match equipment costs to revenues. Payments are fixed for the term of the lease, and your customers get to keep their cash for other opportunities to grow their business.
Tip 8: Offer financing instead of purchasing
You likely won’t lose sales because you quoted a customer a lease payment; however, you may lose a sale if you limit your customers’ financing choices.
Here are a few reasons customers may want to finance rather than purchase:
- Customers might not want to pay cash if equipment quickly becomes obsolete
- Leasing does not impact borrowing power with their bank and may provide tax advantages; however, always consult with your accountant before acquiring equipment
- Convenience – customers can pick the equipment and secure financing all at once if you offer financing
Tip 9: Meet your customers’ needs
Your goal is to provide the right equipment solution to your customer. Shouldn’t you give them access to the right financial solution, too?
With leasing, you can offer various solutions to meet your customer’s specific financial needs. Here are a few:
- Lengthen the lease term to decrease the cost of payments
- Offer different end of lease opportunities
- Offer flexible payment plans to match unique cash flows, like snow plow companies that earn most revenues during winter or landscapers who generate more revenue in the spring and summer seasons
Tip 10: Show customers the savings
Show your customers how new equipment will improve their business. Newer, more efficient equipment could decrease costs and increase output. The money they save by having the latest technology may cover or exceed the cost of a monthly lease payment.
Tip 11: Work with JLG Financial
Now that you’re familiar with how leasing to your customers can benefit your business, it’s time to put them into action and start selling more equipment. Contact the JLG Financial team about customizable programs that will meet your fleet or customers’ specific needs. We offer competitive interest rates and tailored payment structures to maximize cash flow, and we can help you manage your whole fleet with 100% financing of any make or model of machine, new or used. We’re always just a phone call or an email away.
- In Canada, customers can contact JLG Financial by calling 1-833-385-0264 or emailing retailcanada@jlg.com.
- In the U.S., customer customers can contact JLG Financial by calling 888-346-5543 or emailing retailfinance@jlg.com.
Still doing research? Visit JLG Financial online to learn more about how we can help you with customer financing opportunities.
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