The Biggest Leasing Myth in Managed Services
For as long as there have been rumors of a hairy, human-like creature roaming the woods of the US, there have been enthusiasts searching for the Sasquatch. Try as they might, these searches end with nothing but tall tales and grainy photos. In fact, the whole thing is based on a substantial lack of evidence. If only the same could be said of the myth we hear most from technology solution providers.
The Big Myth
So what’s the tall tale we’re hearing from our TSP customers?
“My customers don’t want or need monthly payments.” But unlike that pesky Sasquatch, evidence abounds to the contrary. Leasing happens a lot when it comes to tech gear, and we’ve got the data to prove it.
The Equipment Leasing and Financing Association (ELFA) reports more than $23 billion in “IT and related technology services” were financed in 2016. This is only what is reported to the ELFA from around 80 leasing companies, so there is a lot of additional IT gear that is financed and not accounted for in this report.
78% of companies surveyed in 2015 by the Equipment Leasing & Finance Foundation used at least one form of financing for equipment. If you consider yourself a trusted advisor to your clients, you’ll want to remove the obstacle of paying for solutions by offering a monthly payment plan for customers that need more flexibility.
Earlier this year, GreatAmerica conducted a survey of more than 500 technology buyers and discovered cash is not the preferred method for acquiring technology. In fact, just as many tech buyers view cash unfavorably as favorably, as shown in the chart below.
Why do they prefer leasing? The top reasons they gave were consistent budgeting, ease of keeping technology current and updated, and the affordability of equipment with a monthly payment.
“Most equipment and technology have short life spans. I prefer not to own the equipment but to rent it to maintain current tech at a manageable and regular cost,” says the Chief Technology Officer of one non-profit organization we spoke to.
Now that we’ve debunked the biggest leasing myth in the managed services space, what can you do with the information? Start by making it easier for customers to say “yes” to your proposals by adding a monthly payment option. ConnectWise Sell has made it simple by incorporating financing rates into their proposal tool.
MSPs set up with GreatAmerica can quickly place monthly payments on any quote they have already built. Then, using ConnectWise Manage, they can easily submit that monthly payment quote as a credit application to GreatAmerica. This makes the process of offering monthly payments as simple as a few clicks, and is helping MSPs like E2E Technology get monthly payments on their proposals.
“I love the integration with ConnectWise Sell. The functionality allows us to quickly quote leasing options on every project!” – Andrea Bacarisse, CEO of E2E Technology, L.L.C.
The stats don’t lie when it comes to financing. Most businesses use financing for equipment acquisitions – especially when it comes to technology to the tune of $23 billion last year. However, I think we can all agree we still need more evidence on the Bigfoot front.
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Lori K. Berry is the Director of Strategic Technology for the Communications and Data Group at GreatAmerica Financial Services. She began her career in the IT channel as an account manager for an MSP in Cedar Rapids, IA in 2003 before joining GreatAmerica in 2009. Lori has represented GreatAmerica at industry events, putting most of her focus on Life-Cycle Financing™, a strategy that combines financing solutions with IT business objectives. Lori also develops integration between GreatAmerica client portal tools and client software applications. Lori earned her BA in MIS (management information systems) from the University of Northern Iowa as well as a certificate in International Business.