It’s been proven by IT sales experts that financing and monthly payments can make great sense in ANY economic environment. Let’s break it down …
When times are GOOD
Monthly payments remove capital constraints that a typical IT budget would include. If your customer can pay monthly vs. large upfront cash, they can do more projects with that budget during good economic times. (Example: growing the sales staff to scale.)
Monthly payments also make it easier for your clients to get approval and start consuming your product. There are often fewer resources required for the spend decision as compared to cash payments.
Financing also enables you to proactively manage equipment obsolescence. And since tech depreciates quickly, cash buyers are almost always more likely to have outdated (or vulnerable) equipment compared to those who finance.
When times are BAD
Whether it’s the 2008 recession or a global pandemic, most companies are forced to make massive changes to their budgeting, buying, technology, remote working policies and headcount during fragile economies. It’s the job of tech sales pros to meet these new needs. Your role is to provide the tech to run their business, protect them and stay within their budget.
Enter monthly payments.
An economic downturn creates the perfect storm for smart financing. If a company is fighting to stay alive, making large, upfront cash purchases is rarely in the cards. Financing and monthly payments enable your clients to remain in “cash conservation” mode while getting the equipment they need.
The recent pandemic created a massive demand for remote tech, including connectivity, hardware, meeting applications, security solutions and much more. Companies invested in these needs, despite uncertainty, but often did so with smart financing to keep upfront payments at zero—and monthly payments low. Savvy tech resellers stepped up to make it happen.
Leading with financing
The #1 reason companies make large upfront payments to own tech is because financing was not offered on the proposal. Experts give 2 suggestions when it comes to offering financing:
What can be financed?
- Option 1: When offering both ownership and leasing options on the same proposal, always lead with leasing (and clearly list the monthly payment amount). This gets your client thinking of saving upfront cash, and the little number looks much more attractive than the big number that comes with purchasing.
- Option 2: ONLY propose monthly payments. This may sound like a risk, but it really communicates your #1 recommendation for your client. If they ask for a purchase option, have it in your back pocket to meet that request.
If prospects aren’t being offered financing options by your competition, they certainly aren’t aware of what can be financed. Depending on your distribution partner, you can finance:
- IT projects
- “As a service” models
- Subscription services
- Professional services
- Software only
- Hardware (workstations, servers, backup devices, etc.)
Bottom line, leading with monthly payments provides your clients with predictable tech budgets—without surprises. It also makes it easy to refresh new tech when equipment gets old or warranties expire. (After all, your client is used to monthly payments by that time, and you can often keep them similar.) And don’t forget—cash purchases often take years to recognize ROI, while financing frees up cash like no other opportunity in the industry.
Ready to talk financing? Ingram Micro’s financial solutions team can help you win with your clients.