The Importance of the Internet and E-commerce for Leasing
By Steven Gilyeart, Editor and President of The International Leasing Resource
|Everyone is talking about the internet and e-commerce. Its use by both individuals and businesses is growing exponentially. It is fast becoming a glaring omission to hand out a business card without an e-mail address on it. If a business does not yet have a website, it is “working on one.” One has to wonder: Where is the leasing industry in this electronic juggernaut? The answer is: behind.
What do we mean by “the internet”?
These days, when one talks about “the internet,” one is usually referring to the world wide web (the web), but that was not always the case. The internet actually started as an ASCII e-mail network in the ‘60s known as ARPAnet and was used by the military and industry to communicate on defense project developments. Its distributed network nature, a key element in its usefulness today, was originally designed to allow communication to continue even if one or more nodes on the network got nuked.
Similarly, the language of the web, HTML (hypertext markup language), has been around for some time as well as a subset of SGML (standard general markup language), a formatting and layout language used by large corporations to manage large document sets, such as the parts catalogues and schematic manuals of a large manufacturer. It does not matter to HTML whether something with its “tags” is a word, a picture, a file, or anything else. HTML just says where it goes and how it gets displayed; thus HTML allows pictures and words to be combined with programming efficiency.
What suddenly changed everything was the genius of the Mosaic browser, which wedded the clever utility of HTML to the expansive distributed nature of ARPAnet—and the internet as we know it was suddenly “discovered” by everyone. (The “internet” is something like the journeyman actor working in Hollywood for decades who suddenly becomes an “overnight sensation.”)
Thus, the internet properly includes a reference to both (1) e-mail and (2) the world wide web. (The discussion groups of usenet and news groups should also not be forgotten, but their text functionality is being overwhelmed with the fancy graphics of the web.) E-commerce takes everything a step further by using the web as a transaction medium to actually conduct business over the internet.
Where is the leasing industry in its utilization of the internet?
To evaluate the leasing industry’s utilization of the internet, we need to break it into its three major usage segments: (1) e-mail (2) websites—company brochure type and (3) websites—e-commerce enabled (i.e., transaction capable).
For some time, The International Leasing Resource has been developing an electronic database of the leasing industry, including e-mail and web addresses. Although a lot has happened in the past few years, our industry remains woefully behind the times. We are not “early adopters.” (The following statistics are “impressionistic” and not the result of a scientific poll, Gallup style.)
While a majority of leasing industry participants now have e-mail, as recently as 2 years ago, probably less than 20% did. Yet, there are still a large number of you who don’t. And the vast majority of you who do have e-mail do not put it on your business card! Only about 20% or so of leasing business cards show an e-mail address. And many who have e-mail have stated to me “I don’t really use it” or “I only check it occasionally.” Our industry is still in love with its fax machines (and, apparently, the long distance phone bills that go with them.)
Websites—Company Brochure Type
Less than 10% of the leasing industry has a website, although more and more of you are coming on line with one everyday. Invariably, the first version is the electronic equivalent of the company marketing brochure—which is just fine. It can provide a useful description of the type of business the company seeks, transaction parameters, employee names and qualifications and detailed contact information. It is also much less costly to maintain and change whenever an updated is needed. Prospects and other interested parties can also be directed to it by just the web address on the business card, reducing the costs and lag time in mailing them a hard copy.
A few dozen or so equipment leasing websites have been set up to take applications over the web. (The numbers are higher for consumer vehicle lessors.) But that is about as far as the e-commerce process goes for even them. Once the application comes in, it is back to paper and faxes. However, at least one lessor has tied in an automated credit scoring and approval process—and then it is back to traditional documentation.
What should lessors be doing?
In this era of hyper-competitiveness and commodity pricing on most lease products, every front and back office economy and efficiency needs to be fully exploited. This includes making the best possible use of the internet and e-commerce. This means:
There are no long distance charges, documents can be included as attachments, mail that needs to be seen by others can be easily forwarded, and replies can be sent with just a tap on the reply button. Also, the netiquette of e-mail is brevity. Even typos are tolerated more than with written correspondence. I hardly use my fax machine anymore. The day they will be found primarily in museums is coming.
Many say that they want to wait until they can be sure to “do it right.” There is no such thing and waiting is a deadly game in the hyper-speed of “internet time.” Even if you put up only one page with your name, address, phone and fax number, and e-mail address, the time to do it is yesterday. Thereafter, you can either slowly or rapidly evolve your website to meet your needs. “Now though Imperfect” is better than “Perfect but Later” on the web.
It takes only a modest amount of additional effort to put up the web version of your company brochure. It only needs to be scanned and re-formatted a bit. It is a fast and inexpensive process.
The obvious starting place is a website-based application process. Later, you can add an automated credit-scoring and conditional approval component. If you are really aggressive, you can do all of your documentation electronically. While the truly paperless office of the future may never quite arrive, it moves closer and closer all the time.
Also, these strategies are not only for funding sources but for every single lease broker as well. Prospective lessees are searching the internet for lessors to lease them equipment. We get a tremendous amount of e-mail at The International Leasing Resource asking if we know a lessor who will do deal “X.”
The internet is not just a tool, it is a marketplace. It is a real space where people get together, and more and more they are getting together there to do business. You need to be there too.