“Can you do any better on the monthly payment?” This is a refrain that has been repeated ad nauseam since the beginning of time, or more specifically, since 1895, when banking mogul Frank J. Mackey’s Household Finance Corp. became the first financial company to offer installment loans.
Over the course of the next 130-odd years, various sales segments found they could bake their profits into that monthly number. Sure, the used car industry is the poster child for setting payments that exceed the payback plus the cost of borrowing money and a reasonable profit margin. Thus, the art of haggling was developed.
Obviously, the consumer auto industry is a far cry from office technology, but that doesn’t mean the business client won’t try to bargain for the most favorable terms. In some cases, the bargaining is out of necessity, particularly for non-profit organizations with limited resources. In this installment of our State of the Industry report on leasing, our dealer panel provides insight into dealing with clients who are driven by price.
Mason Smith, president and CEO of MTS Office Systems in Greenville, South Carolina, notes his company has non-profit pricing, and such clients already have a current lease in place. Sales reps are sensitive to the needs of nonprofits and seek to provide maximum savings for them.
By the same token, the realities of inflation and rising interest rates have long since conditioned bargain hunters to temper their expectations. “Most clients now expect rising costs because they have seen it in their personal lives and professional lives,” Smith noted.
Manufacturer Assistance
Fortunately, dealers aren’t solely on the hook for providing the lowest possible pricing. According to Josh Salkin, a partner with EDGE Business Systems, OEMs can help provide relief to a number of key verticals.
“Our manufacturers have some amazing programs for nonprofits, legal, health care and religious segments,” he said.
Tom Ouellette is in total agreement. The president of Budget Document Technology in Lewiston, Maine, pointed to Konica Minolta as a prime example of a manufacturer providing a pricing program to benefit cash-strapped organizations.
“It’s a strong non-profit program that allows dealers to pass on a discount to those who qualify as nonprofit,” he said. “It’s a nice program and we do well with non-profit clients because of it.”
For some dealers, there isn’t wiggle room to shave a few dollars from a lease. Travis Lemke, vice president of leasing for Gordon Flesch Company of Madison, Wisconsin, points out that it’s apparent when a client is steadfast on getting an agreement suited heavily in their favor. But the terms and conditions negotiating isn’t going to result in a special pricing deal.
“On the leasing side, we have standardized our pricing across all verticals to give the most competitive pricing across our entire customer base,” Lemke said.
For the most extreme of hard-luck cases, oftentimes a client may be better off in renting from the dealer. David Carson, president of Plus Inc. in Greenville, South Carolina, notes that if a client on a shoestring cannot afford to pay $5,000 or $10,000 for a new copier, it’s better off working out a monthly payment plan with a dealer that is budget friendly.
“There comes a point where they’re better off paying $100 a month or whatever by leasing it through the dealer, so that it’s just a payment,” he said.
