I have spent a good part of the last 30 years training the sales teams of my vendor partners on how to use equipment financing to help sell their products. While the product types have range from software to construction equipment, selling financing as part of equipment sale remains much the same.
Below are 10 tips to help your vendor’s sales rep sell more equipment:
- Control the sales process from beginning to end.
Many equipment sales are lost when the equipment sales rep does not offer financing and leaves it up to an outside party like the customer’s bank. If the bank turns the customer down, chances are the customer will look to the equipment company that offered them financing in their proposal to try to obtain the equipment. This loss of control during the sales process is an open door for the customer to entertain other proposals because the equipment rep did not keep control of the sales process from start to finish.
- Bring up financing early in the selling process.
The biggest mistake equipment sales reps make is to wait until the end of the sales process to bring up financing. Waiting until the end of the sales process leads to wasting time on customers that don’t qualify for financing and don’t have cash to pay for it. Another downside of waiting until the end of the sales process is that the equipment sales rep has stripped out any gross margin upside that could have been used to pay for a finance promotion like a 90-day skip or interest rate reduction, that would have put them over the top and win the deal.
- Ask these 3 questions.
Train your equipment sales reps to ask these 3 questions at the beginning of the sales process. It will help them sell more products:
- Do you plan on financing your equipment purchase? (Starts the equipment finance discussion on the front side of the sale.)
- How long do you plan on using the equipment? (Lets you know the term of the finance contract).
- What do you typically do with old equipment when purchasing new? (Good indicator of need for FMV financing if they typically trade it in or sell it).
- Include a monthly payment on every equipment quote.
At the beginning of my dealer training sessions I always ask how many of the sales reps use leasing to sell equipment. Many hands will go up, but very few hands remain raised when I ask if they offer a finance quote on every deal. While the excuses vary, most have to do with equipment sales reps fear/ignorance of being asked a question they can’t answer about financing from their customer. Including a finance quote on every deal at very least let’s your customer know that financing is available.
- Memorize the 36-month rate factor.
Great equipment sales reps are not afraid to ball park a monthly payment verbally during the initial part of the sale. This allows the equipment sales rep to judge their customer’s reaction to pricing.
- Sell the monthly payment, not the equipment price.
In the copier and forklift industries, where more than 50% of the equipment is financed, the best sales reps will quote a monthly payment without ever discussing the equipment cost. This allows them to maintain higher gross margins by using the flexibility of leasing to maintain pricing margins.
- It’s easier to justify productivity gains or cost saving with a monthly payment.
I am always amazed by equipment sales reps that will try to justify the price of their equipment through features and benefits, and completely ignore using a monthly payment to minimize the price shock. I once helped a dealer increase the sales of a $5000 add on by calculating that the cost was less than $5 per job when leased ($100/mo. lease divided by 20 jobs per month) The sales of this equipment add on jumped when the sales reps found out that it was easier selling $5/job than $5000.
- Get a credit app completed before you leave the meeting.
There rarely is any level of commitment if the end user is just window shopping. Getting a credit app completed increases the customer’s level of commitment to the sales process.
- A question that will help avoid any credit surprises.
Equipment sales reps can avoid the aggravation of not being able to get one of their customer financed by asking one simple question “Are there any problems in your history that I need to explain to the finance company?” You will be amazed by the number of companies that forgot they had a bankruptcy a few years back.
- Offer to get financials for bigger deals.
If there is one thing that intimidates an equipment sales rep more than anything it’s the fear of asking their customer for 2 years of financial statements. Alleviate this stress by telling the equipment rep to tell their customer that you will be calling them for some follow-up credit information. It will be easier for you to justify the need for the financials to the end user.