A Conversation With Kenneth B. Steinback, Chairman & CEO
With an eye focused on expansion and continued customer service, Kenneth Steinback is leading CSI Leasing to global recognition as an IT financier. Currently with offices throughout North and South America, UK, Spain, Portugal, Germany and Eastern Europe, the company experienced a 50.2% increase in foreign-related business volume, with much of the growth coming from operations in Mexico and Brazil.
“Most of the growth of the past year came out of our Mexican operations,” says Steinback. “Brazil also had a nice jump in activity.” The company focused on these areas in 2006 because, “they have been underserved and there has been a general increase in leasing as a means of funding equipment operations in those countries.” With a relative economic and foreign exchange stability in both markets, Steinback notes, “Brazil and Mexico have been tremendous growth opportunities for us.”
This year, CSI Leasing is concentrating on growing new operations in Central and Eastern Europe. The company has offices in Slovakia, Poland and the Czech Republic, and Steinback explains it is in the process of opening CSI China. “We are currently in the process of filing incorporation papers and obtaining government approvals,” and CSI already has hired a Chinese national with a US MBA degree to be the general manager for CSI China.
The company will continue its growth this year also by means of selected acquisitions. CSI has already completed a portfolio acquisition in Canada and another in the U.S. Steinback says CSI also closed on the acquisition of a Spanish firm as recently as May 11.
Looking Toward the Future
One of the company’s most important initiatives, however, is also one of its biggest challenges: expanding its U.S. sales force. CSI recently launched a new initiative to, train and develop new marketing talent. New hires will go through an intensive 18-month training program, known internally as the “Sales MBA Program,” designed to teach them the leasing business and prepare them to do business as CSI marketing representatives.
The program’s curriculum instills the goals and philosophy central to CSI Leasing. Since 1972, CSI has built its success on a basic philosophy for customer development— to build strong relationships on personalized attention, flexible options and superior service.
The goal of the program is to “put someone out there who understands the marketplace and builds a good relationship with the customer…”
According to Steinback, the IT leasing business is vibrant, but has its own set of challenges. “Revenue growth continues to be our biggest challenge because of the continued downward trend in unit prices… For the non-captive lessors like ourselves, our concern continues to be that manufacturers’ policies inhibit or practically prevent remarketing used equipment… We have to be very aware of that potential problem and know what we can remarket and what we can’t.”
CSI tries to overcome these challenges and achieve its goals by continually enhancing customer service. The company provides a variety of options for its customers beyond financing, and that is what is going to keep the company on top in the industry, Steinback believes.
First, when a potential customer considers leasing, CSI provides financing alternatives to meet their individual requirements. Customers don’t always know the full range of options available to them. CSI, as an independent lessor, remains an objective financier, providing options for any type or brand out there. To obtain the best overall deal, CSI advises customers to negotiate purchase prices of equipment prior to getting financing quotes. “We’ll give them our opinion about whether the pricing is reasonable and we’ll also tell them what other alternatives they can potentially have that manufacturers and captives won’t offer. That’s a service we provide. Being in the industry for 35 years, we are experts in our niche.”
Steinback himself co-founded the company 35 years ago after working as a sales rep of IBM-compatible memory for Fabri-Tek and computer hardware for Honeywell. He holds a bachelor of science degree in Business Administration from Washington University in St. Louis. From 1988 to 1990, he served as chairman and CEO of the Computer Dealers and Lessors Association, now known as ASCDI. Today, CSI has more than $1.1 billion in assets and employs more than 500 leasing and remarketing specialists worldwide.
It’s this knowledge of the industry that CSI relies upon in serving its customers. The company provides a one-stop shop by offering financing as well as a multitude of additional services, including data security processes and an online asset tracking program — which they call My CSI. With MyCSI, customers can access a password-protected Internet site to view or download information regarding their leased assets.
In the final stage of the process, customers can benefit from CSI’s end of lease services including disposal of assets as a remarketed product or recycling them. CSI performs data destruction as well as cannibalizations of equipment to either remarket or scrap it. “With our on-line system, customers can see the status of returned assets, including viewing photos of equipment damaged in transit. And they can obtain certificates of hard-drive sanitization, performed to Department of Defense specifications, to satisfy their data security compliance programs.” All of these services are performed in-house, Steinback says, and free of charge to all CSI lease customers. “I don’t know of any other leasing company that has the in-house capability to do it.” Customers, he adds, feel these options are a very strong part of the lease alternative and the leasing decision.
This cradle-to-grave service is what Steinback hopes will keep CSI Leasing apart from its competitors. “I think the ability to take charge of the hardware from the very beginning of the purchasing cycle all the way through to disposal is what they want us to do… I think that is one of the reasons why it’s going to remain a vibrant industry, because we feel very strongly that service and the relationship with our customer are very important… We’re relationship driven. We’re very conscious that our customers are most important to us, and we make sure our customers are satisfied. It is a very important objective of this company, it’s how we built the company.”
On the horizon, Steinback sees more consolidation of smaller players in the industry, and even more focus on service. “We’re enhancing our service offerings all the time.”
He also sees an improvement in image in the IT leasing industry as a whole. “The business has been a bit fragmented over the past several years, but, today, I think our image as an industry is starting to elevate. There were a couple of major leasing company failures that reflected badly on the industry as a whole. And everyone suffered some of the repercussions. But, I think today the industry has really rebounded and it’s a pretty vibrant business.
“We are the biggest company in the business by far and we recognize our leadership and we recognize that we’re not bulletproof. We want to stay there and we’re going to work hard to stay there… It’s a business that has matured and you have to run it properly and manage it properly and you have to treat people well, and that’s what caused us to retain our employees … and our customers for a very long time, and we’re proud of that.”