Leasing from a Lessee’s Perspective
What percentage of your portfolio consists of repeat lessees? Many one-time lessees could be repeat customers if the lessor/broker took the time to understand the lessees’ needs. In addition, many equipment leasing customer service problems could be solved by looking at a situation from the lessees viewpoint. When we empathize with a lessee we see things from their perspective, and we stop using the frustrating catchphrase “That’s our policy.” In an effort to have lessors and brokers obtain more repeat business, we interviewed two different lessees. Both of these leasing customers have booked multiple transactions over the past twenty years.
The 18th Street Deli started out in 1987 as a simple delicatessen in St. Clair Shores Michigan. People raved about the food and entrepreneur, Dave Salerno, started wholesaling sandwiches out of the back room. Today he runs a 30,000 square foot culinary center and he prepares food for 25,000 people over five states. During this tremendous period of growth Salerno has had to acquire a lot of equipment. He has leased wrapping equipment, coolers, material handling equipment, computers and phone systems. In 1993 Salerno wrote a lease with Curt MacRae, currently with Target Equipment Leasing, and the two gentlemen discovered that they worked well together. “We both have a job to do,” says Salerno, “I told Curt, just don’t come back to me and tell me you can’t do it.” “I knew that if I gave Curt the information, he would take over and relieve me of the headache.” Salerno says he would much rather lease equipment because you don’t have to put out a large capital outlay. “You try to deal with a bank and you just get asked too many questions. What if this...what if that... and the other.” Many of the transactions that the 18th Street Deli enters into are $1.00 Buyouts. “I know it’s a glorified way of purchasing the equipment, but it’s easy. What’s most important to me in a leasing company is being simple and easy to work with. Difficult would be going to the bank! I tell Curt what I’m looking at and he gets back to me with a 48 month lease agreement and the next time I hear from him it’s when he’s cutting purchase orders to the vendors.” With the current economic climate Salerno is a little bit reserved about more expansion right now. “I think the businesses that survive this recession will have great opportunities in the next twelve months.”
Since 1985, Bill Anderson has been the Director of Purchasing at Saint Joseph’s University in Philadelphia, Pennsylvania. He started acquiring equipment through lease transactions about fifteen years ago. “The country was in a slight recession, and I started looking into creative ways to bring new equipment into the University. At first I looked into renting equipment but I never really cared for it. Leasing became a viable alternative and it afforded the different departments in the University the ability to have improved efficiency with the latest technology. ” Anderson maintains all the leases on campus. “Currently we have 90 vehicles and 70 of them are on a lease agreement. We also lease a lot of technology equipment including photocopiers.” Two and a half years ago Anderson started working with Ed Warner of Key Equipment Finance. “We have a master lease agreement with Key for most of our copiers. Rates and support from customer service is paramount to doing business with us, Key was able to meet our needs in both of these areas. When I have a question about our lease agreement, I send an email to Ed and he has it resolved in ten minutes.” Anderson has no plans to alter or change his philosophy of acquiring equipment for the campus. “Currently the University is at full capacity enrollment. Tuition is the bloodline for our funds, we won’t know until June or July weather will will be at full capacity for 2010. If we see a dip in enrollment, then possibly things can change.”
Both of these lessees have a consultative relationship with their leasing representatives. When they need a lease, they have a reliable source to turn to. There are many lessees that would love to have the same type of relationship with a leasing company. Good customers are everywhere, you just have to find them, listen to them and meet their needs.