Thursday, October 27, 2011

Selling Copiers & MFP's "1 Awesome SellingTip"

"Sell Quarterly Payments….today"

It's with great pleasure that Scott Murr allowed the Print4Pay Hotel to share "Sell Quarterly".  It's a good read and has it's place in our talk tracks about financing.  Enjoy!

In today’s market we have seen gross profits shrink and every deal is extremely competitive.  Price is a key component of every solution.  Sales reps often come in with similar solutions and look to win a deal based on being the lowest price.

The majority of sales professionals out there offer a custom solution in terms of products but then offer a cookie cutter lease product to go along with it.  While the product is critical, how the payments are designed can be the deciding factor on who wins the business.  You listen to your customer when it comes to the applications they need from their business solution, but do you ask the questions and craft solutions based on how they would like to pay for your solution?

What is a customer’s biggest pain point aside from an asset not performing to the customer’s expectations? The answer is billing.  If you sell a 60 month lease, that means you are taking 60 chances for your customer to have a bad experience with your solution.  60 times for cash to be applied wrong.  60 times for a customer to be billed incorrectly and incur late fees.  60 times for a bad experience with the lessor’s customer service department.  You can cut that down by simply selling quarterly payments.  If you go quarterly, now you only need the lessor to bill it correctly 20 times.

There is value in this as well.  There are studies out there that show it costs an average small business up to $44 to process an invoice.
This takes into account labor, set up, postage, etc.  With smaller companies, the cost is higher, with larger companies the cost is lower but they turn payables slower and as a result incur late fees more often.  You are providing a solution that saves your customer time, headaches, and money right?  What if we can agree it costs $10 per check for your customer?  A 60 month deal with 60 payments then will add $600.00 to the cost of the solution and $10.00 to the monthly payment.  Quarterly, that nets to $3.33 per month and $200.00. Couple the higher cost for montly processing of your lease invoice along with the time spent on cash applications and late fees and you have a pretty significant savings to offer by presenting a quarterly solution.

Want to make more money on the deal?  Quote the deal quarterly and collect the first payment in advance.  If you sold $195 per month for 60 months in arrears with a .0195 rate factor you fund $10,000.00.  But if you do the quarterly in advance with the same spend ($585 a quarter), that will fund you $10,144.00.  That makes you an additional $43.00 at 30% GP on a $10K deal.  Its not a lot, but these things add up.  The best sales reps do not make a lot off of a few deals, they find all of the little areas and maximize their profits.  If lower payment is what you need, you can sell a $576 quarterly payment in advance and still fund $10K, your payment is $192 vs. the competition who would be at $195.

Most customers would prefer to have 4 payments per year over 12.  Its easier, it costs them less, and you make more or can sell a cheaper payment.  This is only one of many ways you can set yourself apart from the competition in selling a total solution.

Special thanx to Scoot Murr for this!

You can visit his blog offsiteequipment and if you'd like to get involved in our discussion thread on this topic, please go here Question for everyone..... with leasing are any of
-=Good Selling=-

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