Is your commercial finance company a commodity?

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Equipment Finance Companies & Bananas?

In a recent onboarding session with a new client, several of their senior staff members referred to their solutions as a “commodity”. Implying that finance is really just like buying bananas at a grocery store. Oh boy.

We think this entire line of thinking is massively flawed at best and at worst…revolting.

In a former life, Chiquita Brands was a client of mine. I financed a boat load of equipment (no pun intended…but many of them were banana boats) to them and I can assure you Chiquita thought there was no “commodity” in their business. They felt they had superior product, distribution capability and customer loyalty. Uttering the word “commodity” would be a great way to get fired—and they sell fruit for God’s sake. You guys sell a solution for business owners and stakeholders…a financial one nonetheless…but you call it a commodity?

Now, see if you can guess what our new client’s biggest complaint is in the market was? You got it…rate. They felt they were a commodity but were complaining about rate based competition. Huh? Or maybe…duh? If you feel like your stuff is the same as the next guy, almost the entire basis of competition is rate. What leadership is in that? What vision? How little profitability? Ugh.

The commodity attitude hurts us all.

Whether you know it or not, the lack of creativity, vision and solution providing offered by the “commodity” attitude brings us all down. It forces more and more rate focused order taking, RFPing, and bidding in a market full of people starved for real solutions. And you are training the market to think rate first…second and third for that matter…so when a real solution provider comes in customers don’t even know how to handle it.

You sell a great solution. So do better.

This is an equipment thing after all. Stop getting so lost in your life as a financial engineer that you miss that these solutions are about increasing revenue or gaining efficiencies from affordably acquiring equipment. Ask questions. Understand your client’s business. Create unique solutions. Innovate…one deal at a time. And if your salespeople have gotten bad at this because they are “bidding” their way to success…or lackthereof…lead them back to the right direction again. If you focus on how you help businesses manage these equipment issues…you’re anything but a commodity.

Remember, Chiquita Bananas are more expensive than most, yet they enjoy a dominate market position in what most call a commodity. They have led a market, innovative, developed a strong and durable value proposition and company culture.

Are you really a commidity? Or is that just a lazy’s person’s response to a lack of vision and/or direction? It might be time for your equipment finance company to build a company s

trategy and marketing message that pulls you out of the “commodity” mindset. And if you need help…give us a holler.


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