1. Positioning the AMR Sell: Utilizing the Valuable Leasing Tool
Randy Meinke, Vice President
Kerry Linda Martin,
Vendor Relationship Manager
                                                               

2. Overview When Does Leasing Fit?
Recognizing Leasing Situations--”Customer Says”
Leasing Benefits to the AMR Process and Vendors
When and How to Utilize the Lease Tool

3. When Does Leasing Fit? Simplification Budget and Price Obstacles
Can’t Invest In Trial Program
Political Obstacles
Timing Cycles for Budgets and Bonds Prevent Closure
Simplification

4. Customer Says... Next Year’s Budget Next Years Revenue Bond
Can’t Get Approval for a Project That Big
We Have Other Capital Projects Using Up…

5. Customer Says... Can’t Fit in Capital Budget Project Makes Sense, But…
We Know What We Need,
And We’re Going to RFP

6. Sell More…
Sell it Sooner

7. Why Provide Financing?
USC

8. Three Case Studies
4 Year ROI/Payback… Immediate Cash Benefits With Lease
Several Year Install Is Accelerated to 18 Months
RFP - Differentiate--Introduce Something New

9. Leasing Benefits to the Sales Process and Vendors
Shorten Sales Cycle, Clinch the Deal
Financing Fits Project Into Client’s Budgets
Sell Monthly Payment Rather Than Gigantic Lump-sum
Better Economics for Client
Bundle All Costs of Project Into Financing

10. Shorten Sales Cycle Working Through Operating Budget
Operating Budgets Expenditures Authoriized through
Operating Management
Engineering
Mid-Level Managers
Day-to-day Operating Expenses Are Interchangeable With Leases
Labor, Maintenance, and Supplies

11. Sell Monthly Payment Rather Than Gigantic Lump-sum
Which Is Easier to Sell
$7,000,000 or $120,000?
Who Can Say Yes to $120,000?

12. Leasing Provides Better Economics for Client
Improve Project ROI and Shorten Payback
Projects Are Profitable During the Early Stages When Financed
Monthly Income > Monthly Expense
Client Obtains More “Solution” for the Same Dollar Amount

13. Bundle All Costs of Project Into Financing
Avoid Multiple Authorizations for Different Project Costs and Vendors
Avoid Client Having to Expense Consulting and Implementation
Stretch Lease Term to Match Benefits and Cost of AMR

14. Benefit to Sales/Income
Increase Sales Volume and Revenues
Turn-key Solution -
Easy for Client to Say YES!
Control & Shorten Sales Cycle
Maintain Profit Margins
May Eliminate Performance Bond, Lower Cost

15. Case Study and Example I
Client Selected Upgrade Technology From Current AMR Provider
Challenge: 4 Year Payback Period
Lease: Payment Less Than Annual Savings
Immediate Positive Cash Flow
Payback Less Than 1 Year
Client Signed Deal

16. Lease Benefits - Current and Future Sales
Client Can Buy Now
Client Can Buy More Going Forward
Your Focus Is on Customer Satisfaction
More Wish List Projects Done
Expand Client List… Grow Your Business

17. Case Study and Example II
Client Has Mandate to Meter by 2008
Challenge 1:
Customer Budgeted for 4-year Install/Rollout Plan
Challenge 2:
Customer Needed Full System Immediately
Challenge 3:
Partial Install Produces Less Than Partial Benefits As a Result of Lack of Labor Savings Until Full Install

18. Case Study and Example II
Lease With 18 Month Rollout Provided
Full Implementation and Savings Early
Less Budget Dollars, More Benefit
Matched Costs to Benefits
Avoided Political Complications
Increased Vendor Revenue
Avoided Multi-source and Multi Vendor Issues

19. Lease Benefits - to Vendor Finance Dept.
Improve Cash Flow With Faster Payments
Avoid Credit Risk to the Vendor
Offer Extended/Deferred Payment Terms
Cut Collections Expenses
Positive Impact on Bank Relations by Improving Vendor Financial Statement
Reduce Implementation Risk Through Complete Solution

20. When Is It Time to Introduce Financing?
Often…
Early
Middle
Late
And Again…

21. When Is It Time to Introduce Financing?
Often…
Early - head-off budget & price objections
Middle - competitive advantage, and project ROI/payback benefits
Late remove political and project size obstacles
And Again… to sell more, and to differentiate your solution

22. Ways to Introduce Financing
Discussion
Proposal and RFP
Service Agreement

23. Discussion: How will you Finance… ?
3 Answers:
Not Sure
Cash/In the Budget
Need Financing…Exploring Options

24. How will you Finance...? Simple Questions Answer… In the Budget?
How Do We Get It Through the Board?
Realistic Time to Close This Prospect?
How Can I Help This Manager Get This Project Done Internally?

25. Get Ready for Finance Discussion
Who Will Handle the Financing?
Client’s Financial Condition
Project Scope & How Lease Helps
Finance Options Available

26. Financing as a Topic
Can Differentiate Between Truthful Objections and False Obstacles

27. PROPOSAL and RFP Operating Expense May Avoid Formal RFP
Incorporating Finance Option in Proposal Recognizes Client Needs and Obstacles and Differentiates Vendor
Benefits of Financing Often Help Obtain Final Approval From CFO or Executive Committee

28. Case Study and Example III
Client RFP Requests Vendor to Provide Financing For Trial Program With Annual Payments in Arrears
Challenge: Avoid Credit Risk For Vendor and Increase Sale Size While Meeting Customer Need

29. Case Study and Example III
Lease:
Annual Payments in Advance Provided for Complete Project Rather Than Phases
Customer selected full solution based on early cost savings through financing
Vendor Preserved Sales Price and Margin
Client Saved 10% With Alternative Payment Plan
Contract Awarded to Vendor Who Used Financing and Outside the Box Thinking.

30. Kerry Martin, Utility Finance Group
Service Agreement
Private-label Lease Program Presents One-source Provider
Financing Matches Term of Service Agreement
Unique Option, Becoming More Common With Growth of Outsourcing
Kerry Martin, Utility Finance Group
x677

31. Finance Options Available
Cash from Operations
Retained Earnings/Equity
Bank
Bonds and Sr. Notes
Lease
Vendor Financing Terms

32. What Do Utilities Lease?
Meters and AMR Systems
Software--Billing, CRM/CIS and other
Consulting and Implementation Costs
Office Equipment and IT Hardware
Field/Operations Equipment
Land, Buildings, Facilities
More…

33. $1MM OR $100K??
Year 1
TOTAL

34. Bottomline
Financing improves the business case for your project with better ROI and cash flow.
Expedite the sales process by using the budget objection to your advantage.
Finance Options Help You Save Your Client Time and Money.

35. Contact Utility Finance Group
Contact: Mr. Randy Meinke, Vice President
CalFirst Leasing Corporation
Telephone: x 659
Contact: Ms. Kerry Linda Martin, Vendor Relations Manager
Utility Finance Group
Telephone: x 677
Call or Visit Us at Booth #402 For More Information