HOW WE DO IT?
Novation Vendor Services was formed to meet the need for proactive financing solutions in the technology marketplace. We offer financial solutions that put your products within reach of your prospects..
Our integrated leasing tools such as our online lease application and our integrated lease calculator both seem to fit well into your sales workflow. We would like to develop a financing tab for your proposals giving prospects important information on the benefits of financing their purchase. As a part of this integration, we will provide customization of these tools and training on their effective use. Web integration is also highly recommended as an effort to streamline the processes.
We highly recommend that you integrate payments into all your marketing mediums. In our research, we found that this could significantly increase your lead volume and ultimately your market share since most of your direct competitors do not tout payments in their advertising. We also recommend a press release as an effective tool that will attract customers to your company looking for a solution and an option to finance their project.
Although not all transactions will be approved for pre-funding, we propose that aligning your program with banking partners that offer pre-funding will significantly increase your cash flow. We will explain to propose lending partners your progress payment terms of 60/40. This program component will reduce your average DSO and open up your credit lines for more activity and growth.
Consultative Selling is arguably, the most successful way to sell a complete solution. We highly recommend, based upon our interview and needs analysis, that we have the opportunity to train your sales force on the effective use of the financing program. Many of our vendors’ sales staff have learned successful selling techniques as a result of our training.
Asking the identifying question at the beginning of the sales cycle, “What will be your method of payment, cash, credit card, terms or financing?” This question will be one of the leading questions that will help the sales team define the type of customer you will be working with. Once your team has identified the “language” your prospect is speaking, either cash or finance, they will know the appropriate place to apply the available discount to outperform the competition.
We are particularly optimistic about the promotional financing options through blind discounting to your customer. Below is a case study of a customer that recently took advantage of a subsidized rate offer by one of our vendors. In this case we will try to lay out clearly the value leasing brought to our customer. You will hopefully see the value in many of the areas this proposal has already defined.
Customer Profile: The customer is a professional motion picture film, HD + SD video rental, sales, service and repair center. They provide high quality equipment and service to a wide range of film and digital video cinematographers.
Leased Product: Sony Hi-Definition F35 Camera Package with HD Video Processor purchased from a Southern California Sony dealer.
Type of Lease: Corp. only capital lease with a 3 year term and no down payment.
Lease Value Proposition: Cash Flow Management, Ease of Qualification, Tax Advantages
This family owned business has been a loyal Sony customer for years. Being familiar with Sony products and understanding the increased business that this equipment would bring, the customer was eager to move forward with the purchase. The customer then contacted the Sony dealer to begin the proposal process.
After receiving the proposal from the dealer along with information about leasing options the customer inquired about how he might find out more about leasing. Upon introduction to the customer, the finance manager discovered that although the customer desired to pay cash for the camera, the customer realized that in this economy, it makes more sense to hold on to his cash and use leverage via a leasing product.
With this particular camera, Sony, the manufacturer provided a 5% interest dollar buy-down to Sony Financial Services which gives the customer a 24 month lease at 2.88% or 36 month least at 5.24%. (The customer would need to qualify based on the credit requirements for Sony Financial.) In this case, the customer is purchasing the camera at a locked in price provided by Sony. Since the customer is interested in the 36 month lease option, Sony will buy down the rate from 8.53% to 5.24% for the 36 month term.
Our finance manager took down some basic corporate information and asked a few simple questions. Within an hour of collecting the information without even having the customer fill out a lease application the customer was approved under the corp. only lease guidelines. The Company executive we were working with was very happy to hear back from us so soon with the good news.
Lease documents were emailed over to the customer later that same afternoon. Once we received signed documents back in our office the final processing tasks were performed and the lease was enacted.
In closing we hope to have laid out a clear picture of both the simplicity of process and extensive benefits associated with leasing. With the blind discounting that Sony provided on the equipment, the discount was only 5% as opposed to an average of an 10-15% discount that is generally given to customers on sales proposals. The promotional financing that the customer received allowed them to get the equipment required to take their business to another level, leverage a leasing product that gave them a monthly payment and kept the cash available for other business essential needs.
You might ask… How does this help the vendor? Offering a promotional financing product allows the vendor to buy down the interest rate to an attractive rate that grabs the attention of the customer. In most cases, vendors are discounting the product anywhere from 10-20% at the quoting phase. Instead of offering the complete discount to the customer on the price of the proposal, the vendor can apply a 10% cash discount to the proposal. Then take an additional 5% and apply that to the interest buy down on the lease. The vendor then retains 5% of the proposal cost as additional margin to the bottom line.