IDC forecasts that demand for IT leasing and financing for the top 25 markets “will reach $434.6 billion by 2026 with an 8.4% compound annual growth rate (CAGR)*.” Just for comparison, the forecasted CAGR for total IT spending in the top 25 markets is 4.9%*. Now, how are you supporting this demand?
One way is by offering tech payment solutions.
Payment options, such as leases and longer-term payment agreements can complement your “total solution” — the software, hardware, or other tech you provide customers.
There are other perks too. Including payment options into your “total solution” often means you can:
- Increase your sales volume. In our experience, customers finance more when they can bundle hardware, software and services into one simple payment solution.
- Boost your competitive advantage. Adding payment options to your sales offering shows you understand your customers’ IT budget, spend strategy, and technology roadmap.
If you’re not currently offering payment solutions, adding leasing or financing into your sales stack is easy. And, like all good sellers, it's important to understand the process. Let’s demystify it.
Step 1: Find the right financing partner
A good finance partner is someone who specializes in technology, can provide flexible options, and will answer you and your customer’s questions from initial pricing inquiry to contract terms. They could even help plan today, for end-of-term options to obtain new technology in the future.
For example, if your customer wants to lease their devices with a three-year device refresh strategy, and they want to do it globally, the right financing partner could help with payment solutions to fit that strategy. This means you can focus on finding your customers the best tech solutions for their needs.
Step 2: Add payment options to your sales stack
With the help of your financing provider, include payment options in your quote. Offering payment options can help your customers think about how their tech budget aligns with their cost and revenue streams. In fact, most customers don’t realize their provider offers financing unless they quote it on their proposal. As an added benefit for you, offering payment options up front can help you bring in more consistent, long-term deals with refresh opportunities.
If you’re not sure how to introduce financing to your customer, read about our 5 tips on how to start a conversation about financing!
Step 3: Get your customer approved
Your customer might reach out with additional questions about your payment solution included in your proposals. A good finance provider will do the work for you. When a customer has a question, it's a great time to connect them with your finance partner.
If the customer would like to go ahead with the payment offer, your finance partner will do a credit check on your customer. In many cases, credit decisions can be made in minutes.
After a successful credit check, your financing partner will send your customer a contract to sign.
Step 4: Signed, sealed, delivered!
This is where all the “finish line” steps happen, including:
- Your customer and your financing partner sign the necessary documents.
- Your financing partner issues you a purchase order on behalf of the customer (this is where most solution providers book the sale).
- Your customer receives their technology (oftentimes, they’ll sign a “certificate of acceptance” to confirm they’ve received the technology).
- And, once you provide the financing partner an invoice, you get paid for the full price of the products and services. Your customer will pay for their technology directly to the finance provider, according to the pre-agreed instalments.
Repeat these steps at the end of the term: keep your customer happy.
When your customer’s lease contract is nearing end-of-term, a good finance partner will bring that to your attention.
Depending on the financing contract, your customer may have the option to:
- keep and own the equipment for the purchase option amount stated in the contract;
- return the tech if they don’t need it anymore;
- Or, refresh or upgrade the equipment.
Being familiar with the different end-of-term options means you can work together with your financing partner on technology resale, upgrades, or other options your customer may need. For example, you may determine that you could offer your customer updated laptops and potentially keep the customer's payment the same. It’s about showing your value to your customer and building long-term, trusted relationships.
Have questions?
Contact DLL’s tech financing experts to learn more! The team can explain the financing process and work together with you to find payment solutions to grow your business volume and support your customers.
References
*International Data Corporation (IDC): Worldwide IT Leasing and Financing Forecast, 2022–2026: Top 25 Countries Experience Steady Growth, 2022, doc #US49299922, July 2022, p. 3.
Disclaimer:
In making its decision to enter into a financial product, the customer shall rely upon its own accounting, tax, legal and other professional advisors. Without limiting the foregoing, the Finance partner shall make no representations or warranties regarding the accounting or tax treatment of the financial product.
