After the Sale: How to Achieve a Return on Existing Lessees

by Linda P. Kester January/Feburary 2018

The day a deal closes is the end of the line for many sales people, but Linda Kester warns this can be a mistake. She provides several ways for sales reps to build their relationships with clients after the sale to ensure satisfaction and repeat business for years to come.

Linda P. Kester,
Writer & Professional Speaker,
Institute of Personal Development

When my Saab 900 needed new brakes, I took it to a local auto repair shop. I gave them my work number and asked them to call me when it was done. While paying for the service the guy behind the counter grumbled, “You work at Advanta Leasing? I leased my brake lathe through them, and there were four different fees on my first invoice. I figured that if this is how I got treated in the beginning, it’s only going to get worse. So I called up and cancelled the whole dang thing and just paid cash. Advanta is the worst.”

I stood there, mortified. I loved my company, and it was painful to stand face-to-face with a disgruntled customer. I apologized and got out of there. How did this happen? The sales rep was probably afraid to tell the customer about fees involved, such as the UCC filing fee, the interim rent and the property tax. What a waste. The customer had a lousy start and wouldn’t receive the benefits of leasing. Advanta incurred the costs of credit investigation and booking and was now getting negative reviews.

Build Trust From the Start

Informing customers upfront about fees might seem like a bad move. But here’s the thing — when you lay everything out — the positives and the negatives — you build trust. When prospects know up front what they’ll be charged, they will be less likely to become upset when they see those charges on the invoice. Setting proper expectations gets the financing relationship off to a smooth start.

It seems pretty simple. The sales reps know which fees will be charged, and they inform the lessee. But with sales departments under intense pressure to originate, they might be scared to bring up anything perceived as unfavorable. They make the financing seem easy breezy. Also, they might be brokering the deal, so they might not even be aware of the policies of that particular funding source. This makes customer service the barer of bad news.

To inform a lessee about interim rent, the rep could say, “On what day of the month would you like your payment due? Let’s try to schedule the equipment delivery close to that date, because similar to an apartment lease, if you move in half way through the month, you have to pay for those days before the regular payments start. It’s the same way with equipment finance.” The expectations are set from the start.

Customer Onboarding

Next, the deal goes to the operations department. The first interaction that a customer has with someone other than a sales person is usually during the verbal verification process. This is when the funding source calls the lessee and makes sure the equipment has been delivered and is in good working order before payment is released to the vendor.

Instead of treating verbal verification as an operations checklist, think about it as the start of the customer onboarding process. Imagine the new lessee being welcomed, thanked and educated about what to expect over the course of the term. Then mention all the different types of equipment that can be financed as the lessee may think that you will only finance one type of equipment. This is also the perfect opportunity to find out if their preferred method of communication is emails, texts or phone calls.

Return on Existing Lessees

Equipment finance relationships, just like personal relationships, need nurturing. There’s a lot of talk about ROE (Return on Equity) and ROI (Return on Investment), but what about ROEL (Return on Existing Lessees)? When you deliver a quality financial product and fabulous customer service, you should be able to obtain significant repeat business from your existing portfolio.

One method I use to increase repeat business is to ask the lessee to fill out an evaluation sheet when the transaction is booked. I ask what they liked, what needs improvement and, “In one sentence please summarize your enjoyment of the financing experience. Be careful, I may use it in some future promotional materials.” Then I scan the evaluations into my computer. Once an appropriate amount of time has passed, I send him a copy of the evaluation form and write a message at the top that says something like “Peter! Can you believe it’s been a year since we put this deal together? I have some new ideas to share.” The customer sees his own handwriting expressing his pleasure at dealing with you. This is an easy and inexpensive way to stay top of mind.

I always love to look through a file of a booked deal. I like to read the credit history and see what kind of equipment the customer is using to grow her business. I never understood how a rep could go to all the trouble of booking a deal and not follow up for more business. Existing lessee files are filled with gold, and there are so many ways to stay in touch and provide value over the course of the term. I see many organizations turning a blind eye to customers after booking. Inattention leads to unhappy customers and disappointing results. It’s a real disconnect.

Adopting proactive communication at the beginning and continuing it during the term prevents lessee neglect. Reach out to the customer and let them know how many payments are remaining on their lease. Share success stories about how businesses are using financed equipment to expand and prosper. The common saying “knowledge is power” is incorrect. Knowledge is not power, implementation is power. Using and sharing the information in your files is what brings about ROEL.

Anticipate the Evergreen

Are you unsure about the level of service you’re providing to existing customers? Simply Google your company name with the word complaints after it. Many financing complaints have to do with an evergreen clause. The evergreen clause is a statement within a financing agreement that says something like, “this agreement shall automatically renew, unless either party provides notice to the other of its intent to terminate this agreement not less than 90 days before the end of the then current term.” An evergreen clause can be worded in many ways, and they all have the same common characteristics. If triggered, they keep the contract alive longer than the agreed-upon term.

A proactive financial professional will know if there’s an evergreen clause in the agreement and work to ensure the lessee has ample time to exercise their buyout option, upgrade or return the equipment with no penalty. One idea is to schedule a post card to be mailed six months before the contract is up. There are lots of prescheduled direct mail services available.

Today’s social media savvy lessees know how to use the internet as a platform to quickly and rapidly communicate about their financing experience. If they are disgruntled about fees or an evergreen clause, they will not hesitate to write a negative review. But if their problems are resolved satisfactorily, lessees may reward a positive encounter with repeat business, enhancing your ROEL. A customer who complains, and whose complaint is resolved, is more likely to become a long-term customer than the customer who never provides any feedback at all.

Stop focusing on just booking one deal. Focus on creating a relationship. Do this by learning the client’s needs, meeting as many of their team members as possible and being a value-added resource. You are not just pushing for a repeat deal, you are partnering with them so both of your businesses can grow together.

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Terry Mulreany
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Frank Battista
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