Published April 2, 2022 | Updated December 10, 2024

How to Use Creative Financing to Create Recurring Revenue

Have you ever considered how CFOs and CIOs differ in the way they think about equipment and technology projects? There is a difference – a big one: surveys show that 70% of CFOs see these projects as a one-time capital allocation. On the other hand, 83% of CIOs see the same projects as an ongoing, long-term relationship. Who’s right? It depends on how you position your solution.

For many businesses, digital transformation and taking advantage of the latest technological advancements are huge priorities. And for equipment and technology sellers, those sales opportunities are just as big. But there’s a wide gap between how finance and IT departments view budgeting the necessary solutions.

CIOs realize it’s easier to ask for what they need year by year, rather than engage in a budget battle that spans over several years. But because of the rapid and fluid evolution of equipment and technology, this approach, which might have worked in the past, doesn’t work any longer.

Staying up to date requires long-range thinking and recurring investment. Companies that attempt a one-and-done approach to solutions will be unable to compete in a very short time.

As an equipment and technology seller, your job is to help buyers see investing in solutions as a continual process rather than a series of events isolated in time. And one of the keys to doing that with a C-suite audience reluctant to adopt this mindset is using creative financing to spread out the financial impact of discrete equipment and technology investments with affordable payments.

CFOs like things to be predictable. CIOs understand that equipment and technology platforms require ongoing investment. By offering a finance program with consistent payments, you can appeal to both audiences, streamline the sales process, and, in many cases, build larger deals with the increased flexibility and buying power offered by payments.

This approach makes sense in several ways. Research shows that customers who finance equipment and technology – typically a bundle that includes all hard and soft costs – are 314% more likely to be returning customers. There’s also a loyalty factor involved. Once the solution is in place and the payments start, the customer is more than twice as likely to continue doing business with the seller that implemented the solution rather than shop for a new one whenever another need arises.

The takeaway is this: many customers will never tell you that budget is the key issue, when, in fact, that’s exactly what it is. Successful equipment and technology sellers get in front of budget objections, even if they are not verbally expressed, by offering a bundled, affordable payment. They understand how to integrate the payment into the sales discussion so that it addresses the long-term affordability question in the form of a consistent recurring cost.

Using this approach, the CIO gets the required solution with the ability to scale and upgrade over time. The CFO gets a manageable, predictable payment that can be easily incorporated into the equipment and technology budget. It’s a win-win for both the customer and the seller.

The experts at LEAF are here to help you leverage creative financing to solve customer problems and grow your business.