When our company first decided to expand from exclusively providing equipment rentals to also providing equipment financing, we struggled to generate interest and were surprised by the low volume of applications received. So, we did some market research in an attempt to identify the problem.
At the time of our research in 2018, the Equipment Leasing and Finance Association reported 78% of U.S. companies leveraged some type of financing for equipment acquisitions and 63% of investments in equipment and software were financed. In contrast, our own survey from KWIPPED, across a wide range of equipment industry verticals, revealed fewer than 10% of equipment sellers were proactively presenting and promoting financing as a payment option to their customers. Many survey respondents did not offer financing at all, but even among those who did and had one or more lending partners, a significant percentage told us they didn’t mention financing unless the customer asked about it.
We were shocked to find this massive market gap and massively missed market opportunity, which is available to all financing solutions providers but requires two things:
B2B Equipment Points of Sale
Different equipment sellers have different sales processes, and the variations depend on a number of factors, including:
These factors determine the various points of sale a customer will encounter with a particular seller. A point of sale occurs anywhere a prospect or customer engages with your business, your brand and, especially, your specific products. The most common points of sale in business-to-business (B2B) equipment sales include:
Present Financing as an Option
When talking with our prospects and customers about the value of presenting financing (especially with specific estimated monthly payments) at the point of sale, we use a pretty profound analogy: ”Diners in a restaurant rarely order something that isn’t on the menu. But, show a dish on the specials board and have the wait staff promote it, and you’ll sell out of that dish.”
We’ve already established that most businesses prefer financing over a straightforward equipment purchase, so letting buyers know immediately that financing is available moves that buyer one step further down the sales funnel and delivers an instant advantage over every competitor that either does not offer financing or does not communicate its availability to the buyer.
When we started presenting monthly finance payments next to product sale prices on our website, the ELFA study statistics held true: Well more than 60% of buyers were clicking the ‘Apply for Financing’ button instead of the ’Purchase’ button.
Capturing Larger Market Share
There are five types of buyers when it comes to financing options, including:
So, regardless of which bucket a buyer may fall into, offering point-of-sale financing is always positive and typically delivers a significant competitive advantage. More directly, here’s a list of reasons to start proactively presenting and promoting financing and affordable monthly payment estimates at every point of sale:
Use Technology to Present Options
Every equipment seller does business in their own way. Some rely heavily on e-commerce transactions on their website, others use a more traditional quoting process with formal custom quotes for each buyer RFQ and some just type up an email.
If we, as financing providers, really want equipment sellers to embrace point-of-sale financing, we must empower them to do so with as little interruption as possible to their existing sales processes. Technology is the best way to achieve this goal. With a good development team, or the help of third-party resources, it’s possible to create innovative ways to present financing payment options at literally every possible point of sale. Once features such as financing website plugins, digital quotes with clickable financing options, mobile device applications and links to web-hosted applications that can be shared via emails or texts have been integrated into a seller’s sales funnel and processes, buyers will see affordable monthly payment options everywhere and applications will flow effortlessly.
Commit to the Power of Financing
Businesses and, more specifically, salespeople within businesses want to make sales and are willing to adopt new habits that demonstrate positive results. For whatever reason, a surprising number of businesses (and their sales teams) perceive financing as a hindrance to sales rather than the powerful sales tool the data proves it is. If we want to drastically increase finance applications, partnering with new equipment suppliers isn’t enough, especially if those suppliers don’t recognize the sales-generating power of financing and wait for their customers to ask if they offer it. We must educate our supplier partners about the competitive advantages gained through the proactive promotion of financing and convince them it will be worth their while to commit to presenting financing options at all points of sale.
Of all the equipment suppliers using KWIPPED’s financing solutions, the ones that have truly changed their perception of financing from being an afterthought to being a point-of-sale introduction have experienced incredible success and sales growth. These partners commit to integrating financing on their websites, quotes, store signage, product spec sheets and everywhere else their customers see their products. And they also train their sales and marketing teams to present financing options early and often to prospects and customers. The results don’t lie: Businesses that leverage financing consistently close far more sales and drive more revenue than those that do not.
Let’s work together to educate equipment suppliers about the value of presenting financing payment options at every point of sale and change their perception of financing from an afterthought to a powerful sales advantage.
Robert Preville is the co-founder and CEO of KWIPPED, a tech firm that develops solutions for B2B equipment sales. Preville is a serial entrepreneur and investor, having founded and led several companies in the B2B arena. Prior to KWIPPED, Preville founded and sold GlobalTestSupply.com, a provider of test and measurement equipment that ranked No. 800 on the Inc. 5000 fastest growing companies list. Prior to that, he was the founding employee and vice president of sales for MFG.com, an online manufacturing marketplace and a portfolio company of Jeff Bezos’s Bezos Expeditions.
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