Equipment Leasing as a Marketing Tool

Every business has a set of commercial objectives. It would be too simple to say that one is only in it for the money. Usually, there are moral considerations. The foundation of a company is normally based on a perceived need to improve on the way things are done. Examples of such improvements are making something more efficient, more convenient, less costly, more valuable, easier to maintain, or faster. The patent office is filled with examples of products brought to the market that, when introduced, the maker and the world had no idea of the way the new product would affect the market place. An example of that is the introduction of the Xerox machine.

At the time it was introduced in the early 1960s, the Xerox machine represented a revolution in printing technology. Every office of every type was to be affected.Every printed document could be easily copied. Its convenience affected attitudes about the use of carbon paper. Where before everyone used carbons for copies of original documents, it soon became clear that it would be easier to copy using the Xerox method than the more cumbersome and inconvenient carbon copy protocols. Office procedures became streamlined and knowledge was communicated faster to a broader audience. Expenses were reduced and operations became more efficient. Business became more profitable. Government became more efficient at all levels. Law firms thrived.

At first the manufacturer priced its machines on a lease/purchase basis that had a bias to equipment leasing. It was not interested in selling the Xerox machine. It wanted to lease it. The basic lease amount was negligible when compared to the asking sale price. Additionally, certain supplies had to be ordered and had to be replenished as the equipment was used. As new internal applications for the use of Xerox copying capabilities were uncovered by the customer, the original anticipated use of the machine was magnified many times over. Supply revenues skyrocketed. Use fees based on counter registers for each machine did the same. New machine leases increased to meet the serendipitous demands from the customers. The customers paid regardless of the expense because the advantages of use far outweighed the expense.

This article provided courtesy of Tiger Leasing and can be read here.