CUS­TOMER FI­NANC­ING CAN BOOST SALES

CRN - - COVER STORY -

In 2013 Cisco Cap­i­tal com­mis­sioned the For­rester Group to study the po­ten­tial of ven­dor fi­nanc­ing in the APAC mar­ket.

The study found that at least 30 per­cent of In­dian mid-sized and large en­ter­prises planned to use fi­nanc­ing op­tions to fund tech pur­chases. Ac­cord­ing to the study, 60 per­cent of In­dian com­pa­nies would like to work with a chan­nel part­ner to im­ple­ment a funded IT project.

The in­cli­na­tion to­ward fi­nanc­ing IT projects is spread across ev­ery ver­ti­cal with IT-ITeS (17 per­cent), man­u­fac­tur­ing (16 per­cent) and BFSI (10 per­cent) be­ing the keen­est to opt for fund­ing.

The study in­di­cated that 78 per­cent of com­pa­nies would con­sider fi­nanc­ing op­tions at or be­fore the pro­posal stage. “This means that if a cus­tomer is of­fered fi­nance as an op­tion at an early stage, he is more likely to close the deal and work with the part­ner that helped him with fi­nanc­ing,” ob­serves Scott Griggs, Se­nior Mar­ket­ing Man­ager & Head, Part­ner Mar­ket­ing, Cisco Cap­i­tal.

The study re­vealed that in 43 per­cent of cases the real de­ci­sion maker across or­ga­ni­za­tions was the CFO. The study fur­ther re­vealed that 76 per­cent re­spon­dents opted for fund­ing to pro­cure server hard­ware, while 70 and 61 per­cent used fund­ing to pro­cure stor­age and net­work­ing, re­spec­tively.

While more en­ter­prise cus­tomers are con­sid­er­ing bor­row­ing money for set­ting up data cen­ters, smaller en­ter­prises are look­ing at fund­ing for com­mu­ni­ca­tion projects.

While large en­ter­prise want to use ex­ter­nal fund­ing to sup­port col­lab­o­ra­tive so­lu­tions and projects in net­work­ing and com­mu­ni­ca­tions, smaller en­ter­prises plan to use ex­ter­nal fund­ing mostly for PC-client-tech­nol­ogy re­fresh. Ac­cord­ing to the study, 77 per­cent of cur­rent fi­nanc­ing users say that eas­ier ac­cess to ex­ter­nal fi­nance can help them pro­cure additional ICT so­lu­tions be­yond cur­rent needs. “Ven­dor fi­nanc­ing is eas­ier on the cus­tomer, is al­most al­ways a bet­ter fi­nanc­ing model, and en­sures stick­i­ness of the cus­tomer for the part­ner,” says Griggs.

If a cus­tomer is of­fered fi­nance as an op­tion at an early stage, he is more likely to close the deal and work with the part­ner that helped him with fi­nanc­ing

SCOTT GRIGGS

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