There are a lot of sales techniques and strategies that are important in the sales process that will bring you all the way from lead generation to conversion.
Under the umbrella of conversion strategies in sales, structuring the right payment options is an essential part of the sales process that very often does not get enough attention.
If structured wrong, it will kill your sales, or even worse, it will kill your business!
During an economic downturn or financial crisis, companies are more sensitive and focused on their maintaining their cash reserves. More of them will shift from a capital expenditure model (CAPEX) to an operating expenditure model (OPEX).
Meaning that instead of investing or buying new equipment or assets upfront, they would rather lease it to not take a big chunk of their cash reserves upfront, and be able to spread it out.
If you don’t adapt your payment options to the prevailing market conditions, it will be challenging for you to sell in the marketplace. Especially if you do not have access to the top-level decision-makers at the C-suite level and above. Because you have to keep in mind, beyond the C-suite there’s still the board of directors and shareholders the C-suite has to answer to.
So a leasing model in a cash reserve environment will get you more sales great, however, you have to balance it off with your own business’ model as well. Is it able to handle a leasing model?
Let’s say you manage to close the sale based on this model, but you have no cash management strategy. Very quickly without the right cash flow management, it will eat into your reserves and eventually kill your business.
So keep that in mind when reviewing your payment options or payment terms. Strike the balance between what the market wants and what your business is able to handle in terms of cash flow.
