Leasing as a product has no future
Leasing is often considered to be a stagnant, conservative industry. Due to the industry’s relatively poor image, a number of leasing companies have had problems attracting new employees who can think innovatively. As employees are by far the most important resource in our industry, I have often wondered why this is the case – and what we can do about it. Attending both the Leaseurope convention in Cannes, France and ELFA in California in recent weeks has helped me better understand the challenge.
Is leasing a product or a service? I think this is a fundamental question, both for our business at 3 Step IT and for the entire future of the industry.
One of the most interesting observations at Leaseurope was the delegates’ views on the future of the leasing industry. When asked, less than a third of the delegates believed that banked -owned leasing companies would exist as independent companies five years from now! This could well be a self-fulfilling prophecy, as the delegates represented top management in European leasing companies.
At the same time, leasing was referred as a product in practically all of the presentations. I see this as the main reason behind both our industry’s current poor image and its uncertain future.
If we continue to see leasing as a product, the banks have little or no reason to keep leasing companies as independent entities. Leasing as a product provides only limited added value for customers and runs the risk of becoming just one of many commodity financial instruments. In commodity markets, the leasing product would be competing on price only. This is not an innovative approach; it attracts nobody and has no future.
I personally see leasing as a service. As a service, leasing and the leasing industry have a bright and inspiring future.
A leasing service company can be a very valuable partner for the lessee as well as for manufacturers and vendors of the leased assets. In today’s world the preference is for acquiring everything possible as a service, and this can be achieved only by packaging financial services into the offering. A true service company understands customer needs as well as the special requirements of leased assets and their lifecycles. A service company adds value for customers throughout the entire asset lifecycle management process – from cradle to grave. A true lifecycle management service transforms leasing from a mere financial product into a modern, responsive and sustainable service. The change process has only just begun, and it provides tremendous opportunities. It attracts top talent. It is the future of leasing.