SPECIAL REPORT Reasons why fi nance opt
In these challenging economic times leasing has emerged as a proven solution to help resellers capture more business, overcoming what is often the biggest obstacle to any sale, an upfront cash investment.
arrangements,” added Fazakerley. “To a busy customer this can be time and resource intensive whereas the reseller will be working with a finance company who really
understands the telco market, equipment and customer requirements, so it will be much quicker and simpler for the customer to use the reseller’s financier.”
Paul Fazakerley T
he credit crunch has resulted in many banks and financial institutions having
reduced appetite for lending, so many end customers are increasingly looking to their suppliers to also offer financing as part of their value proposition. This is a key way for suppliers to differentiate themselves from their competitors, points out Paul Fazakerley, European Program Director, Avaya Financial Services. Additionally, there is significant independent evidence that shows the deal value on a financed deal is typically 30 per cent higher than on a cash sale. “This is because resellers are able to spread the cost of the
new solution over a longer term such as five years, enabling the reseller to up- sell additional equipment and/or services, and the customer to overcome their budgetary constraints and acquire the technology their business really needs, not what their budget dictates,” explained Fazakerley.
While customers will always push for the most competitive price from their suppliers, resellers must be able to demonstrate how they add value to their customers. “Financing is a key way for them to achieve this, as they are taking the hassle away from the customer having to make their own financing
Fazakerley has seen an uptake of leasing in two important areas. “Many large customers, especially contact centre operators, adopt leasing as their preferred method of acquiring Avaya telco solutions as they can maximise the value of the solution for the lowest possible outlay, and can potentially treat the solution off balance sheet,” he said. “The SMB market is increasingly demanding finance offers alongside the solution sales as their previous lines of credit have either reduced, or the cost of them has increased. So SMB customers are expecting the resellers to provide financing options as an integral part of their solution sale.”
Distributor Nimans says it’s not just big ticket items that can be covered,
but peripheral items, maintenance and network services – as well as non- telecoms-related commodities such as cars and office furniture. “If you are not offering leasing then ultimately you are letting yourself and your customers down,” said Tom Maxwell, Dealer Sales Director at Nimans. “You could to be missing out on thousands of pounds worth of business. For many of our customers leasing is a no brainer.”
Dedicated division He highlighted how Nimans has invested in a dedicated financial services division, offering a range of flexible finance options across up to seven years, including zero per cent. “In these prudent economic times it is even more imperative that resellers can take the financial heat off their customers who are often reluctant to make any financial outlay unless absolutely necessary,” Maxwell explained. “Leasing provides them with a far more palatable alternative to continue to invest in their businesses – allowing resellers to not just clinch more sales but land bigger orders.”
Maxwell says leasing allows customers to have the
equipment they need rather than what their budget can accommodate, offering resellers the opportunity to maximise sales. “The ability to add onto a lease at any time gives the customer the ability to update their technology in line with market and individual expectations,” he added. “It’s about building close working relationships and equipping customers with a continual opportunity to improve and progress.”
Maxwell says some businesses are forced to keep equipment past a point at which it is viable for their IT department to maintain. But leasing allows the customer to include any settlement for a current lease into a new agreement, fund it over four-five years to keep the repayments low, and upgrade on a continual basis to update equipment and software. He points out how the desire from resellers to provide a complete leasing programme continues to grow: “Resellers are looking for a full solution which is why we have worked hard with our funders to allow them to include all systems and software in a single lease agreement, offering their customers a complete
Instant Ethernet & EFM pricing from Virtual1. Find out more at
www.virtual1.co.uk or call us on 0844 884 0800. Total Network Freedom.
54 COMMS DEALER DECEMBER 2011
www.comms-dealer.com
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