CUSTOMER FINANCING CAN BOOST SALES
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