Equipment dealers that provide customers with excellent financing and insurance options improve...
Why Finance & Insurance are Crucial Value Centers for Equipment Dealers
Commercial equipment financing is stuck in the past, with slow and inefficient manual processes that jeopardize control of the sale and create unnecessary data compliance risks. The industry has largely been overlooked by technological innovation that has defined other sectors over the past two decades. Most commercial equipment dealers rely on the same lending processes they did 15 years ago. Paper credit applications, manual data entry processes, and fragmented lender networks are widely the norm but put enormous strain on sales teams and leave customers dissatisfied.
Offering finance and insurance services within an equipment dealership can alleviate these issues and speed up sales processes, but too often are overlooked as being too costly and difficult to manage. This blog presents the missed opportunity costs and the benefits of offering finance and insurance services, and explores how technology works as an “easy button “ to make commercial equipment finance and insurance processes easier than ever.
Costs of Failing to Provide Finance & Insurance Services
Finance and insurance services in the commercial equipment industry are often considered an afterthought, or worse, a burden for the dealership. Unfortunately, failing to provide these services can have significant consequences, including:
- Lost sales – Manual credit applications, tedious lender portals, and slow approval processes add unnecessary time that can delay or kill sales deals.
- Lost margins – Marking up finance, insurance, and warranty products can add a 1-2% margin to equipment sales — margins that are lost when a dealer fails to offer the services.
- Poor experience for sales – Slow financing processes, lost deals, and low margins contribute to dissatisfaction in the sales workforce, making it harder to retain and recruit experienced sales talent.
- Poor customer experience – Customers may need to complete multiple applications for a single purchase and wait for outside financing approvals, putting a strain on customer relationships and creating an unsatisfactory experience.
- Risk of non-compliance – Outdated processes that rely on paper, fax, and un-secure email open the door for legal exposure due to negligent handling of sensitive customer data and can irreparably damage a dealership’s reputation.
Failing to embrace finance and insurance services as value centers can be incredibly damaging to a commercial equipment dealership’s success in a highly competitive market. Providing finance and insurance options, on the other hand, can differentiate a dealer from the competition and deliver a host of additional benefits.
Benefits of Finance & Insurance Services for Equipment Dealers
Control and Protect the Sale
Providing in-house finance services effectively protects the sales deal, since the dealership maintains visibility and control over the application process from start to finish. Dealership finance processes eliminate status update calls to lenders and extended delays on approvals, improving the odds of closing a sale quickly.
Increase Profitability & Margins
Finance and insurance services are significant value centers for commercial equipment dealers and can significantly increase profitability. Marking up these vital auxiliary services typically increases margins by 1-2% on every sale.
Enhance Customer Satisfaction
In-house finance and insurance services vastly improve the customer experience and are a competitive advantage in the commercial equipment industry. Streamlining application processes and delivering fast pre-qualification and credit approvals enhances customer satisfaction and improves long-term dealer relationships.
Standardize Sales Processes
Dealership finance and insurance services help standardize sales processes, ensuring that every member of the sales team follows best practices as determined by management. Streamlined credit application and financing processes reduce administrative work and support a more efficient sales experience.
Providing finance services gives the dealership more control over sensitive customer data management by eliminating easily compromised media like paper and PDFs being transmitted over fax or email. This improves data security and compliance and minimizes the risks of data breaches and damaging legal exposure.
How Technology Makes Finance & Insurance Services Easy for Equipment Dealers
Offering finance and insurance services within the dealership is undoubtedly beneficial for sales and profitability – so why do so few equipment dealers offer them? Usually, the answer is that it is too hard, takes too much time, and requires too much paperwork and manual data entry. Dealerships need an EASY BUTTON that takes the hassle out of finance and insurance – and fortunately, that easy button exists with specialized technology solutions.
Minimizes Costs of Building Finance & Insurance Departments
Historically, building finance and insurance departments within a dealership meant hiring experienced staff to collect, monitor, and manage processes, adding significant labor costs. Technology platforms that digitize and automate financing processes reduce service management costs and provide an opportunity for dealerships of all sizes to capitalize on auxiliary services.
With an advanced finance technology platform, dealers can adopt new efficiencies to make their teams more productive. By digitizing application and approval processes, dealers spend less time with back-and-forth emails, tedious paper processes, and manual data entry. They can focus their efforts on customer relationships and closing more sales.
Increases Sales Velocity
Technology helps streamline the finance process, reducing the barriers that hold up sales. Digital credit application and processing enables commercial equipment dealers to quickly pre-qualify customers and deliver approvals and terms in a matter of minutes instead of days. Expedited financing decisions increase sales velocity to close more deals, faster.
Provides More Lender Options
Technology that digitizes credit processing allows dealers to submit a single application to multiple lenders simultaneously. This helps ensure the best terms for every customer, regardless of creditworthiness, and eliminates tedious lender portal data entry that slows down financing processes.
Utilizing technology to manage finance and insurance services helps ensure sensitive customer data is securely captured, transmitted, stored, and accessed. Encryption promotes compliance with state and federal data privacy regulations, decreases dealer liability, and minimizes data breach risks.
Turn Finance & Insurance into Value Centers with Trnsact
Replace outdated, manual commercial equipment financing processes with a simple, user-friendly technology interface that increases sales, uncovers new revenue streams, and creates a high-quality experience for customers with an advanced technology solution. Trnsact is the leading digital finance management platform for faster, easier, and more secure processes that drive sales, improve dealership profitability, and increase compliance.
With Trnsact, dealers get secure and compliant digital credit applications, submitted securely to their lenders of choice, with instant pre-qualification to increase sales velocity and get more deals closed, faster. Trnsact simplifies and streamlines finance and insurance processes, allowing dealers to recognize these crucial value centers with an average 1-2% added margin on deals. Schedule a demo today to see how Trnsact’s digital platform is transforming commercial equipment financing.