Does anyone else in the print equipment and services industry agree with me that the industry does not need more leasing companies participating in 1990 financing strategies? Talking about how to avoid interest rate questions, fighting over buyout options, the obsession to prematurely upgrade leases burring in massive buyouts in new deals?
Come on, my friends, it's 2022! Not 1990
If they remain in the status quo, the large IT distributors will soon slap the small legacy leasing organizations out of the market.
As these small leasing organizations continue chasing each other's dealers, catch them and then deliver the same basic service, the innovative financial organizations are focusing on end-user buying habits and modifying to meet these buyers through the changing landscape of product distribution.
I was somewhat intrigued that a couple of new leasing companies came into the print equipment dealer channel a while back. I was thinking WOW, new blood delivering new ideas and new strategies. But unfortunately, these new players forgot the importance of fresh blood and new strategies.
It is not reassuring observing the commonalities – (Status Quo) in the go-to-market of many of today's leasing organizations within the print equipment sector.
The financial arrangements between buyers and sellers are heading for significant disruption not from the legacy institutions delivering 1990 leasing strategies but from new approaches.
I believe many leasing companies fool themselves regarding how innovative they think they are. Everything! all the print industry's leasing organizations offer is a commonality and simply gives them permission to show up; these things they all do are bare minimums.
Taking applications from dealers digitally is not innovative, sending prepared documents to dealers digitally is not innovative, having integrations to e-automate is not innovative, integrations to a dealer's CRM is not innovative, and yes, answering the phone quicker than the competition is NOT innovative! In reality, it's not even needed!
"You can be the financial institution who answers the phone quicker than your competitors and lose to the innovative financial platform which doesn't even accept phone calls."
All my dealer friends should be entertaining alternative approaches to equipment financing. We are witnessing the distributors as TD Synnex now offering hardware through payment strategies. In addition, the hardware OEMs themselves are offering financial arrangements to both resellers and end-users.
The shift to everything as a service forces OEMs to build out financial programs. For example, we all witnessed our friends at Lexmark partnering with Xerox Financial services, a stand-alone business within Xerox holdings.
I expect Xerox Financial services, currently with over three billion in leased assets, to cause some disruptions, especially to the small leasing players. Our friends at DLL more than likely currently have the most extensive portfolio of leased technology assets.
Honestly, the smaller leasing companies will either buy each other up and attempt to scale or shift to becoming bank charters and seek markets outside of technology financing.
The smaller leasing organizations should study why our friends at EverBank, after being purchased by TIAA, exited the leasing equipment business completely. What did they see that others are ignoring?
The question to the lower tier leasing companies is, will they survive the coming onslaught of competition; competitors which are better position. In reality, if the leasing organizations were honest, they would conclude that the 1990's leasing strategies are quickly becoming obsolete, so where does that leave them?
I recommend to all these small leasing organizations showing up in the print services industry over the last couple of years during its most significant disruption and decline in the industry's history to rethink your strategy.
I suggest these new leasing companies build out platforms based on today's buyers, not platforms or programs based on yesterday's sellers.
It always amazes me when I see new actors with good intentions of potential disruptions allow the status quo to hijack their strategies and bring them to the comfort of complacency.
The industry needs new strategies based on buyers' realities. For example, e-commerce hardware payment programs without human engagement; the industry needs programs where resellers can deliver alternative products through alternative financial arrangements.
The game where leasing partners chase each other's dealers without any differentiator does not signify needed change. Unfortunately, however, all that status quo and lack of disruption abilities within the leadership ranks of most of the industry's leasing companies will soon become the Achilles Heel.
"You can be the vendor with the greatest relationships in the world and quickly rose to the innovator who delivers a better experience."
"Status quo is the killer of all that will be invented."
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