Ponder on the notion of innovation and what it means for the channel. I have previously discussed the merits of becoming a truly service-oriented business.
Certainly, product and service development is critical if VARs want to stay ahead of the game. But creativity in pricing (making products affordable to customers) is frequently overlooked as an equally essential part of innovation.
In fact, addressing the question of customer affordability has always been the hallmark of business innovation. And much industrial and social change over the past 150 years has been brought about by innovation in credit.
For instance, one of the first items to be mass-marketed thanks to finance was the Singer sewing machine, with ‘installment loans’ common as early as 1850. Finance played a central role in making the sewing machine affordable. The social change engendered by this labour-saving device is undisputed: before the sewing machine, it took about 14 hours to make a shirt.
Similarly, the advent of motor finance at the turn of the century is generally viewed as the catalyst for the huge growth of the automotive industry. Before 1916, a car cost the average wage-earner almost half a year’s income. So it could be argued that innovation in finance was as important to the motor industry as the inventors and those who introduced assembly line processes.
Today’s businesses, particularly those in the channel, can learn lessons from the history of consumer credit. The way to open up products to new markets, or to take new products to existing markets, is to innovate the approach with finance. Of course, not all of today’s market developments will have such wide-reaching social implications as the two earlier examples.
But the channel does stand to help its customers maintain competitive advantage by investing in the latest technology, and finance can certainly facilitate investment in best-fit solutions.
This is illustrated by a recent example of finance and technology combining with great success. Earlier this year, West Ham United FC invested in the latest pitch-side advertising boards at Upton Park, East London. The new boards allow the club to generate more than twice the revenue usually expected from traditional fixed pitch-side displays because the flexibility of digital technology allows the club to attract advertising tailored to specific matches, especially those that are televised.
The seven-figure technology investment was made possible through an innovative finance solution.
West Ham is naturally keen to conserve any available cash to invest in players, so payment for fixed asset investments has to come from the income it will generate over time. A bespoke asset finance package was an ideal solution, avoiding large upfront cash payments by paying regular, fixed and inflation-proof monthly installments. West Ham benefited from a tailored solution that matched its individual needs.
This is just one example of an end-user investing in a best-fit solution, thanks to a flexible payment approach. As a result, more and more channel players harness innovation in finance to turn their product and service ideas into reality. C
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