It seemed like a simple enough question when I was asked to write this article. There are independent equipment leasing brokers all over this country working on vendor-originated business; of course there’s a market for them!

And yet, the number one thing I’m asked for help with — 
through the training and consulting side of my business — by brokers both big and small, is marketing and sales problems they’re having with equipment vendors. And they’re largely the same problems I dealt with when I entered the vendor market more than 25 years ago. Problems with rates, with loyalty, with kickbacks and storied credits are the most frequent. So what kind of market is it where day after day, over years and years, so many brokers continue to face the same objections again and again?

It’s a stale, stagnant one, that’s what kind of market it is — and it’s not the vendor’s fault. I’ll go further. Brokers who don’t recognize that, who aren’t honest with themselves about it, and who aren’t willing to make changes to themselves and how they work, will continue to struggle in it because it’s not going to change until they do. Maybe some will actually find a measure of comfort in knowing in advance what the rest of their working career is going to be like — 
but it sure doesn’t need to be that way.

It’s a stale and stagnant market because the vast majority of brokers are still trying to work that market with stale and stagnant sales strategies. There are some very successful exceptions, to be sure, but the majority of brokers, to the degree they could articulate their strategy in the vendor market at all, would be describing their own understanding of some version of “using-leasing-as-a-closing-tool.” Many are trying to do so without even meeting their vendors. They’ll never have a face-to-face opportunity to actually teach their vendors the sales principles those vendors need to know to really use leasing effectively as a closing tool, even if they knew how to teach them. Lacking that opportunity or ability, they try to compensate by loading their vendor kit with the widest possible array of rates and programs and then just start “dialing-for-dollars.”

If you think I’m criticizing them, you’re dead wrong. They’re doing exactly what they know how to do; what they saw the brokers before them do. To the degree they’ve had any training at all, most are doing exactly what they were trained to do. There’s a horrible lack of any practical, meaningful, effective training available to newcomers to this business. I save my criticism about that for the part of the business that has the most to gain by solving that problem, the underwriting side of the business (but that’s a whole other article).

No, I’m not criticizing the struggling brokers, quite the contrary. The fact that so many of them are able to make a living at all in such a highly competitive marketplace using such stale and stagnant strategies is an incredible testament to their persistence and their underlying toughness. I’d like them to know there are easier ways for them to leverage their entrepreneurial skills to make their businesses easier, more valuable to their vendors and more productive for themselves.

While leasing is, in fact, a good closing tool when used properly by a vendor, building on it as a sales strategy for brokers harkens back to the dark — the pre-Internet — 
ages when many brokers themselves came from vendor backgrounds and most worked markets where the goal was to personally conduct sales training meetings in their vendor’s offices. Frankly, that’s just not true today. Fewer of the brokers entering this business today come directly from a vendor sales background. Now, I happen to think that’s a good thing, overall. I think the variety of backgrounds bringing newcomers into this business is beneficially broadening our industry’s reach to, understanding of and credibility with, more and more of today’s increasingly sophisticated lessees. But it also makes that particular strategy less potent.

Fewer and fewer brokers today are meeting and working with their vendors in person. I don’t happen to think that’s a particularly good thing, but, again, that’s also a whole other article. It’s a fact that, with the continued explosive growth of the Internet, the growth of our industry itself, and the proliferation of national directories and searching services, most vendors now have contacts with leasing sources well beyond their own neighborhoods. Most brokers also find it convenient to prospect well beyond their own neighborhoods. That further dilutes the effectiveness of old sales strategies designed to serve the different needs of earlier times.

Here’s the good news, though — those old strategies don’t even address the biggest problem the vendors face today, anyway. Why is that good news? It’s good news because it creates a good opportunity for brokers willing to understand it. Those that can successfully re-invent themselves — remember, I said the stale and stagnant market wasn’t going to change until and unless they changed — in order to help their vendors with their biggest problem will become indispensable to those vendors, will permanently leave the standard vendor complaints and problems behind, and will take more control over the operation and profitability of their own businesses.

With all of the Internet and search services available today, how hard is it to find a worthwhile vendor who doesn’t already have a leasing service? Pretty hard isn’t it? Beyond just finding a vendor, how hard is it to get a foot in the door without having to cut rates, take problem credits or pay out kickbacks? Even harder, isn’t it?

The single biggest opportunity in the vendor marketplace for independent brokers today is to understand that it’s just as hard for their vendors to reach, and to get their foot in the door with, the customers they’re looking for. Their vendors don’t need anywhere near as much help in closing sales as they need in opening doors. Being a broker who does that for them is hugely beneficial to them. Just as importantly, it also creates three huge benefits for the broker.

First, the broker’s business immediately becomes more productive. When the broker is in the door-opening role, the broker’s only going to bother opening doors with a good chance of credit approval and ultimate funding. The broker no longer works on just any prospect the vendor throws their way and no longer commits to working on prospects before they know the prospect’s credit. When wasted efforts go down, and approvals go up, productivity improves quickly and dramatically.

Second, when the broker’s involved in the transaction from the very beginning, from the very earliest prospecting stages, the broker can control how and what pricing is presented. When lease pricing is presented first, rate objections are minimized. The transaction is no longer a “gift” from the vendor to the broker, either. When that’s turned around, no longer is the broker expected to cut their rate to make tight deals close. When a broker can quote the prices the broker wants to quote — and do so without pressure from the vendor — profits go up immediately, too.

Third, the broker becomes unique and indispensable. Every time a broker helps open a door for a vendor, that’s a new and unique selling opportunity for that vendor. It doesn’t matter how many other leasing sources that vendor knows or works with. There’s no threat to any of them. Not only is the broker not identified as “just another one of them,” the broker’s identified instead with something those sources didn’t provide. When a broker becomes identified in a vendor’s mind with new and unique selling opportunities, that broker becomes indispensable and is, for all practical purposes, immune to competition.

Sounds simple, doesn’t it? It’s not. Oh, the actual work part, what it takes to become an effective door opener for equipment vendors, is relatively easy. It’s certainly no harder than chasing down every lead a vendor calls in — good credit or bad — all the while with the clock running and the vendor pushing and pushing on the rates to go down or to get a kickback. That’s what I call hard work.

For me, once I was willing to look at my own business differently, willing to see what I could be in the eyes of my vendors, rather than just what I always assumed I should be, transitioning from traditional old-style selling strategies to more powerful and productive ones was actually fun. Once I became willing to take responsibility for my own leads, it was inspiring to discover how natural a role being the door opener for vendors is for our business. I discovered effective new ways to use direct mail, telemarketing, trade shows and business networking functions, and I simply quit hearing the traditional vendor objections that had dogged me for so long. None of that was hard at all.

The hard part about what I’m describing is that it doesn’t depend on the vendor or the market to change. It requires the broker to change. That may be the hardest kind of work of all: self-directed, internal change.

Real, constructive change requires the ability to imagine things being better than they are; to imagine things working better than they do. Then — and perhaps this is the most critical part — it requires a level of confidence in that vision sufficient to summon the courage to commit to moving towards it and away from what’s not been working as well. Think about sometime you’ve had to step over a pretty large ditch, or a stream or ravine. It’s very often easier to reach out and put that first foot across than it is to follow through and leave the other side by picking up that second one. We all like to have one foot firmly planted on ground we know; even if it’s a place we’d like to leave. It’s the same with our work habits. There’s something comfortable about what we know, what we’ve been doing, even when we know the sales strategies we’re using continue to generate the same objections over and over again, year in and year out.

The payoffs, though, for brokers in our business, who are willing and able to take that step, can be both liberating and profitable. Those that won’t can only expect more of what they’re getting now. I’m fond of repeating a saying from Dale Dauten’s book, Taking Chances, Lessons in Putting Passion & Creativity into Your Work Life. In it, he says, “Different is not always better, but better is always different. You can’t be better by being the same.”

Brokers in our business, who want to see a much better vendor market, won’t see it by being the same, either. They’ll see it when they’re different — when they become the difference. For brokers that wonder how critical this is; who wonder whether or not they should be trying to re-think their business and their sales strategies, I have an easy answer. Anyone who’s heard me speak probably knows what I’m going to say next. All those brokers have to do is ask themselves one simple question: Would they rather sell this way, or would they rather compete against the brokers who do?

So the original question here was: Is there a vendor market left for independent brokers? The answer is definitely, yes. Unfortunately, for far too many brokers it’s the same stale, stagnant market. For the brokers who can re-imagine their businesses, who can re-invent themselves and their strategies, and who can re-introduce themselves to their vendors on a totally new and more productive basis, there’s a wonderfully bright market of limitless potential just waiting for them. I say, go for it.

Gerry Egan has been arranging equipment leases for more than 30 years, starting as a vendor, then working for a direct funder, and for more than 16 years as owner of TecSource, Inc. TecSource® brokers leases, holds its own leases and manages the leasing portfolio of a private, business-only bank. Egan is a past-president of NAELB and a frequent presenter at industry conferences. He recently wrote, presented and produced the first three of NAELB’s online video Distance Learning programs. A previous contributor to the Monitor, Egan also does private consulting, and offers a variety of sales training programs. He appreciates feedback and can be reached via e-mail at [email protected] or through his training site at www.RealWorldSalesTraining.com.