By Alex Shields | National Account Program Manager | Wells Fargo Equipment Finance
The beginning of every year brings a flurry of tradeshows, conferences and events. By the time spring rolls around, and iron is in the field, we are able to reflect and take the pulse of the buying season and upcoming year. With the 2016 tradeshow season officially behind us, the purchasing of equipment is still robust, continuing the positive trends of the buying season. The Rental Show in Atlanta has come and gone and it certainly made an impact on the rental and construction equipment world.
At the beginning of January 2016, Chicago Pneumatic (CP) decisively continued their aggressive financial merchandising approaching, paving the way for the continuation of their 12-month, zero percent interest financing program. This program has increasingly played a more important role within the purchasing world, as it allows buyers the flexibility to purchase necessary equipment for their growing businesses. CP’s endorsement and consistency with all their financing programs makes the total transaction seamless for their customers and can often be the deciding factor in making capital equipment purchases. The program consistency keeps the customers coming back for more as new or redesigned products enter the CP product line and customers know the 12-month, zero percent interest program is available.
The Rental Show helped boost financing and purchasing activity. One of the contributing factors to why CP has reported record show sales this year was the extension of the zero-interest financing program.
The 2016 Construction Industry Forecast survey, which was conducted by Wells Fargo, shows high optimism for the 2016 fiscal year. While the forecast is lower than last year’s optimism quotient, contractors and distributors can likely look forward to another successful year.
According to the same survey, distributors foresee a steady increase in new equipment, which mirrors contractors’ expectations. The steady nature of the current market, and the foreseeable future, can be attributed to the importance of extended payment terms. Customers who can spread their payments out over more time — 12 months to 60 months — are able to closely match their revenue to their payments going out. Manufacturers who employ solution-based selling strategies will likely see an increase in new business.
After darker days in 2008, we can expect to see a certain level of normalcy within the markets. The market appears to be getting back on track and it is showing the cyclical nature of purchases creating a positive buying environment for the end user and the customer. The manufacturers, like CP, have done a lot to make the programs a success through their dedication and participation with these finance programs.
Consistent collaboration, market feedback, and historical trends with these programs deliver results. Customers can continue to trust in the manufacturer and maintain a buying relationship with the company, while manufacturers can expect several returning customers. It truly is a win-win for the manufacturer to the distributor and customer alike.