A few years ago, I developed a relationship with a specialist point of sale equipment provider, who had not effectively incorporated the use of leasing as a tool to help their clients overcome budget constraints.
One day I was talking to a sales representative, Paul, over a cup of coffee and I asked him my usual question: “How is business doing?” After crying and blaming everyone but himself for his poor sales results, he told me that he wanted out of sales and felt he was better suited for a job that would provide him with a regular paycheck.
Sensing his frustration, I asked Paul what attracted him to sales and if he really, deep down, wanted to leave the profession. He responded by telling me that he enjoyed the freedom, the potential to earn a lot of money, and most importantly, the tremendous sense of satisfaction he received from making a sale. And then he proceeded to say that he really didn’t want to pack it.
Having been involved with the sales staff for several years, I offered to take him under my wing and work closely with him for the next month.
My intention was to condition you to start using leasing proactively and to show you how it can be used to close sales. The first thing I asked him to do was generate a list of “sitting down” prospects, you know, the ones who were in the mindset or putting the purchase on hold for a future date. The second thing I asked him to do was start making appointments with these companies where he would accompany him on the sales call. I gave him a week to do this and contact me.
Three days later, Paul called saying that he had made an appointment for Tuesday at 10:00 a.m. M. With a business owner where he had previously provided a quote for 10 systems totaling $ 280,000. He proceeded to tell me that we are probably wasting our time as he won’t be buying any point of sale equipment until next year.
The company was a retailer that sold feminine beauty products, including specialty soaps, body soaps, and other skin care products. The company had 10 locations throughout western Canada and wanted to replace its current outdated system. It was September, the Christmas season was approaching, and the client made the decision to suspend the acquisition until next year.
So we met with the client and his opening statement was, “I don’t know why we met again. I thought I had made it clear that I will not continue until next year.” I looked at my protégé and saw an I told you smile on his face, however, the prospect’s comment was music to my ears. However, I knew we had a lot to research and with the right strategy and questions we could probably turn this into a sale this year, not next.
I took control and started asking questions.
That was how the conversation went …
I: “So how long have you been thinking about replacing your current POS system?”
Client: “About six months.”
I: “It seems like he’s invested a lot of time in the process.”
Client: “Sure you do. I have met with several suppliers and it is not easy to do a full analysis of the different products available.”
I: “Have you chosen a supplier or are you still looking at the specifications of more than one product?”
Client: “No, I’m definitely going with Paul’s product, but like I told him, I won’t do anything until next year.”
I: “I see. What is your reason for updating your current system?”
Client: “We have a large number of products and our current system cannot handle the amount of small ticket inventory. Paul’s system will allow me to better manage ordering procedures and tell me which items are not moving.”
I: “Are you telling me there would be substantial cost savings from installing the new system?”
Client: “Absolutely. It’s September now, and I don’t think it’s feasible to have it up and running, with fully trained staff in time for the Christmas season, which by the way starts in early November. I wish it had started earlier in the year.”
I: “Paul, is it feasible to have your system fully operational with trained personnel by November 1st?”
Paul: “Absolutely! We have a dedicated team of service technicians and customer care trainers at all Western Canadian locations. Additionally, we will assign a project-specific IT specialist who will be available 24/7. weekdays”.
I: “It seems clear to me that Paul can meet his deadline and will, in fact, go the extra mile to ensure that the transition is seamless. Do you have any reason to doubt him?”
Client: “No. I’ve checked their references and they seem to deliver on what they promised. $ 280,000 is a lot of money, you know.”
I: “I acknowledge that, however, he stated that there would be substantial savings by replacing his current system.”
Client: “Yes, however, we opened three new stores this year, and I don’t really want to go back to my bank to ask for a loan or an extension of my line of credit. To be prepared for the Christmas season, I have to use my line for a huge amount of inventory. “
I: “If we put you on a 4-year lease for about $ 7,300 per month, would you be prepared to go ahead and have the new system up and running by November 1?
Customer: I really prefer to own my team. “
I: “With all due respect, if a purchase is secured by a bank loan or line of credit, you don’t really own the equipment. With a lease, you are in effect creating a separate line of credit outside of your conventional banking relationship. Payments of the lease are fully tax deductible. “
Client: “In this business, 70% of my income is generated in November and December, and with a lease, I would be stuck with that payment of $ 7,300 all year long. In months where my income is low.”
I: “I appreciate that and in fact you are not the only one. We have many clients in similar situations and have addressed the situations by providing what we call custom cash flow leases. We could provide you with a lease where 70% of your Payments were made in November and December, and the remaining 30% was distributed during the rest of the year, would you be willing to go ahead with the new equipment today, instead of waiting until next year? “
Client: “Can you do that?”
I: “Absolutely.”
Client: “Sure. I think that would work.”
I: “In that case, I will prepare some exact numbers for you and will return this afternoon to obtain credit information, as well as your current financial statements.”
Client: “Sounds great. Can you be back here around 2:00? I’ll have my information ready for you.”
I: “Perfect. See you then.”
There you go!
A win-win situation. Paul got the sale, the client got the much needed point of sale system sooner rather than later, and not to mention I got the lease.
Why was this sale made?
First of all, Paul, the sales representative, was willing to leave the sale today and wait until next year. He did not realize the opportunity was still there, yet he was not aware of the tools and resources available to be able to close the sale today. As with many prospects, the client hid the real objection. In this case, the real objection was financial in nature and, due to the expansion during the year, he was reluctant to approach his bank again.
By bringing in a leasing specialist, Paul was able to add a new dynamic to the sales process and ultimately solve his client’s financial problem. This particular situation took a lot of creativity to first identify customer needs and second to come up with a solution that would close the sale.
Naturally, a sales rep like Paul would not be expected to have the same level of knowledge as a leasing specialist, however to be properly equipped you need to know what kind of leasing flexibility is available.
This provides an excellent example of how leasing can be used to monitor and close a sale. Be sure to involve Keltex Financial early in the sales process and let us help you.