Do you ever get tired of the “…it’s too competitive out there” story? What about, “…rates are declining and it is too hard to compete?”
I read about it and hear about it, at least from those who honestly express what they are experiencing. However, is the answer really to lower the rate and offer more than you should, more than makes sense, and ‘win’ a deal putting the ‘win’ over the structure? Is this the market in which we live? Is this a market in which we can succeed?
I suppose that you can operate this way and market this way. However, many factors would thank you for this in the long run, since this mentality would be short term and eventually short lived, in the scheme of things.
The more important issue, however, is not what we give up or how low the factoring rate could be. It should not be about price and funding ‘air’ to make a deal work.
After all, at the end of the day, factors sell the same benefit: money.
We make it pretty with software and perceived benefits that we all share, such as same day funding and other marketing type benefits. But, what makes each of us different? Isn’t that really why a client chooses one factor over another?
Yes, there are those clients who really do only care about rate. Those are the clients that more than likely will not become long term clients or long term referral sources. Factors still want to work with them, though, why not? It is still a closed ‘deal’ and a client.
But, for most people, what makes a factor different is not ‘what’ they sell but ‘who’ they are. Maybe it is their personal relationship, word of mouth, someone they know who provided a recommendation, or something else. Maybe, it is something even more though. Maybe it is that they believe the factor they choose is working for them and the success of their business. At least, this is my opinion.
With that said, many companies make buying decisions based on ‘who’ they work with and not ‘what’ they sell. Business owners often choose vendors, computers, stores, banks, and yes, even factors, based on the purchaser’s (or business owner’s) belief system. Therefore, those same business owners readily align with a factor that also aligns with their beliefs. Don’t take my word for it though. Look at those such as Simon Sinek (click on the link). People often make buying decisions based on the ‘why’ and not the ‘what’ or ‘how’.
So, to keep this short, what is your why? What makes you different? Is it a niche? It is your people? Or, is it just your price?
Whatever it may be, does everyone in your company know? Do they believe in that same philosophy? Do they live that culture and that belief? And, more importantly, it is not if you can sell your benefits and features, it is if someone wants to buy into them? Discover your why.
Wishing you success. The Factor Guru.