Sales & Marketing

Question 1

What is Marketing?

Answer 1

“the activity, set of institutions and processes for creating, communicating, delivering and exchanging offerings that have value for customers, clients, partners, and society at large.”

Question 2

Components of a Marketing Plan

Answer 2

Executive Summary
~ ESTABLISHES THE PURPOSE AND DIRECTION
Includes research highlights, company goals, and historical results.

Situation Analysis
~ EVALUATES FACTORS OF THE ORG AFFECTING STRATEGY
Includes market summary, environmental analysis, funding, opportunities/challenges, strengths/weaknesses, credit quality requirements.

Market Summary & Analysis
~ EVALUATES FACTORS OF THE MARKET AFFECTING STRATEGY
Determines the go-to-market strategy, key segments to target and identifies the size, scope and strength of the market.

Environmental Audit
~ HOW COMPANY FITS WITHIN THE TARGET MARKET
Forces a leasing entity to look at a variety of factors that may influence its success

Question 3

What are the 4 “P”s of Marketing?

Answer 3

Product
~What are you selling? Must be clearly & thoroughly defined.
Often you are not selling an actual product but the benefitthat the product / service provides

Place
~ Where will your product be sold? How will your product get to the customer / how does the customer get to you? In leasing, these are called origination channels

Price
~ What is the product worth in the market? Must consider price needed to produce vs. actual value vs. perceived value

Promotion
~ How can we educate the consumer about our product / how to get it? Differentiating from competition through a variety of channels

Question 4

3 Major Areas of Tracking Marketing Success

Answer 4

Engagement
Experience
Satisfaction

Question 5

Definition of Sales

Answer 5

matching the benefits and features of the lessor’s products to the needs of the prospect’s organization

Question 6

The Necessity of a Niche

Answer 6

Developing a niche allows you to tailor the benefit to the needs of the market. In leasing, typically breaks down by deal size, industry, entity type, or equipment type.

BSD, F&B, L&D, Healthcare, etc

Question 7

What does a proposal include?

Answer 7

Parties to the transaction
Type of transaction
Payment terms
Purchase/renewal terms at the endof the lease
Credit requirements
Residual Treatment
Tax/insurance requirements
Equipment description
Equipment cost and expected delivery/funding dates
Fees/miscellaneous transaction costs
Expiration date of the proposal
Documentation requirements
Any additional requirements (collateral, payment penalties, rate indexing)
Proposal disclaimer
Formal acceptance (often a fee is collected at this time – EX: Good Faith Deposits)

Question 8

Direct Origination Channel

Answer 8

Lessor’s staff works with the end customer throughout the entire origination lifecycle from proposal to credit application, through underwriting, documentation, and funding.

Lessor maintains control of the customer relationship.

Ex: Direct Sales, Vendor, etc.

Question 9

Benefits of Direct Channel

Answer 9

Efficiency in targeting the right types of businesses

Control over resources involved in selling the financing product

Selling directly to the lessee is easier, quicker, cleaner

Lessor can provide lessee more service because there areno intermediaries

For banks, having a direct sales organization enables the expansion of relationship with its banking customers

Question 10

Vendor- Building Relationships

Answer 10

Frequent communication to stakeholders is critical to successful vendor relationships. These stakeholders can include:

Manufacturers/Vendors of Equipment
These are your potential customers.

Vendor/Manufacturer’s Sales Force
These people control how much business flows to you.

Vendor/Manufacturer’s Operations or Finance StaffThese people handle transactions. Many vendors have a lease administrator or finance department who works with the leasing salesperson just to adjust pricing, perform credit checks andexplain the needs of lessees.

Question 11

Why is a Vendor Program Important?

Answer 11

Programs allow the vendor to differentiate themselves from their product/service competition and help the lessor defend itsrelationship to other financing competition

Question 12

Vendor Benefits

Answer 12

Enables a lessor to scale sales team effort with a higher return on time invested

Strategic value of vendor programs is scale — each vendor program acquired could generate multiple millions of dollars each year

Creates “stickiness” for repeat business to both vendor and lessor

Financing helps vendors move more of their product so they control the sale — may avoid discounting through added value of convenient financing

Focusing on the monthly payments allow vendor salespeople to upsell the customer which could lead to a larger sale

Question 13

Vendor Benefits Cont.

Answer 13

Could generate steady business with an industry you know/like/fits your portfolio goals

Generally vendor programs perform better than other origination channels

The ability to offer financing can be a competitive advantage for vendors

For vendor, financing programs create a familiar and reliable relationship for funding, avoiding “slow pay” and uncertainty with other leasing companies, which leads to a better all-around solution for customer

Question 14

Vendor Drawbacks

Answer 14

Fraud: fraud can occur from instances of company-wide fraud or collusion of vendor sales & lessees, it is critical to remain vigilant to prevent this risk.

Indicators of Fraud
Changed / unusual invoicing

Mismatched credit information

Problems on verbal confirmations, site inspections

Unusual push by parties to rush the funding process

Question 15

Vendor Drawbacks Cont.

Answer 15

Vendors can be fickle - important to find a niche and maintain diversity of vendors

Vendor relationship could put pressure on lessor to approve transactions they may not have in the interest of the broader relationship

Sophisticated vendor programs require a lot of resources from lessor to support unique market needs like seasonality, and ultimately remarketing and repossession

Lessor can become too dependent on one vendor if not diversified enough by industry and vendor

Question 16

TPO Channels

Answer 16

Equipment finance brokers, independent lessors, or any third-party companies or individualsthat refer equipment finance opportunities to finance companies for funding.

Referral sources can be attorneys, CPAs, or anyone with insight into a client’s need for your financing product.

Question 17

TPO Benefits

Answer 17

For lessor, TPO is a means to outsource the sales effort, providing solutions for end-customers while controlling costs.

TPOs also enable lessor to generate consistent stream of business that meets credit/portfolio criteria from a source that understands the industry and asset niche

Because of the importance of relationship and reputation, documentation may be more reliable and chance of customer meeting lessor’s credit criteria is more likely.

TPO is incented to manage customer relationship/solve problems by coordinating transaction (less headaches)

Question 18

TPO Benefits

Answer 18

Benefit to TPO is funding transactions without incurring debt or using cash, and helping their clients with multiple financing options

Because TPO is not servicing transactions, they have less overhead and administration once the transaction funds

Network of resources to solve client needs that they may not have been able to resolve directly and also contributes to portfolio diversity. TPOs have domain expertise and good reputations in specific industries which enables them to meet unique needs of end-user client.

The network of resources gives funding source an abundance of transactions without cold-calling. Plus, relationships with the TPOs may be long lasting.

Question 19

TPO Drawbacks

Answer 19

Fraud risk is higher since the lessor is further removed from the end customer, making it harder to detect.

Efficiency to sustain a high volume of transactions becomes difficult, especially in small-ticket industries.

Difficult to deliver custom customer experiences and solutions since lessor is removed from the end customer and does not intimately understand their needs.