What's NewS Issue 6 June 1996
networking
13
putting a sales force in place wherever
^Babobank has offices abroad. Last year it
BRtablished a presence in New York, and
only a month ago put a team in Sao Paulo,
Brazil. These teams can help local
Rabobank clients exporting consumer
goods to Europe. In the case of the US, for
instance, such goods might include textiles
or lobster or computer parts. From Brazil,
it could be leather products. These tend to
be medium-sized deals with short payment
periods. The aim is to smooth cross
border flows.
SINGLE MARKET
'No one knows better than we Europeans
ourselves how very different our various
member countries can really be. In terms
of payment systems. In terms of payment
morality. But since we have a pan-
European network acting locally on each
these different markets, we can handle
Rabobank clients exporting from the
US and South America are left with the
impression that Europe really seems like a
single market. Our French subsidiary will
handle their French receivables, our Italian
arm looks after their sales in Italy, and so
forth. Our aim is to provide seamless
service and act domestically for Rabobank
clients anywhere in the world - not just
the Americas and Europe but increasingly
in the Far East as well.'
LEASING AS TOOL
In the world of vendor leasing, a
somewhat different situation prevails. The
clients are inuch larger, the sums involved
are often greater, and the payment terms
are spread out over a much longer time.
Fiere, De Lage Landen can bring new
^Hients into the Rabobank fold. The
essential purpose of vendor leasing is to
give the cliënt (or vendor) a new
marketing tooi to spread his product
penetration in competitive markets.
Photocopiers are the classic example.
Customers increasingly tend to lease
rather than buy photocopiers these days.
A soft drink bottler will want bottling
equipment (plus service and spare parts) at
a price that is based on the output of the
machines. A user of printing machines,
like Heidelberg Harris, might be offered a
similar leasing deal based on the number
of copies produced.
BRIGHT BALANCE SHEET
'Ownership is no longer the most relevant
factor to the customer,' says Toebosch.
lOutput is the key; the customer wants to
Bv for use. Our vendor leasing
arrangements allow the vendor's customer
to transform his fixed costs into variable
costs.' These packages are usually devised
in cooperation between De Lage Landen
De Lage Landen - on a fast track to add new products to the
Rabobank range.
and the vendor - and they are then offered
by the vendor under his own name. A
farmer who leases a tractor from a Massey
Ferguson dealer is unaware that he is
actually doing business with a joint
venture in which De Lage Landen might
hold a majority stake. In fact, most vendor
lease arrangements are offered through
joint ventures in which De Lage Landen is
lead partner: such structures help keep the
vendors' balance sheet ratio looking
bright.
WORKING FOR THE BANK
De Lage Landen is concentrating on
several priority markets in vendor leasing.
These include agricultural equipment,
computer equipment, photocopiers,
transportation, and printing machines.
Obviously, not all these markets coincide
with the agribusiness, food, and health
care markets on which Rabobank is
primarily focused. 'In vendor leasing,
we're often targeting multinational
with information and they don't watch or
respond to ads as they once did.
Innovative distribution is emerging as one
important area where one can still
differentiate one's offering.'
FLEXIBLE OPTIONS
it takes expertise to get the design of such
offerings right. In transportation, for
example, you have to be aware that
flexibility is an important priority for end-
users. Acting on that awareness, De Lage
Landen might offer transport companies
the opportunity to lease, say, 20 trucks,
plus an option to hire an additional
number in case of unexpected periods of
peak demand. Such a deal might also be
linked to a maintenance contract plus an
ability to trade in the old truck for the
newest model at a fixed additional cost.
EXTENDED RELATIONS
Similarly, computer company customers
are always concerned about committing
companies that are not yet clients of
Rabobank,' says Toebosch. 'But often, we
can pass on our partners addresses onto
the bank.'
LONG-TERM LIAISONS
What the factoring operations, the vendor
leasing activities, and Rabobank's own
banking efforts have in common is an
emphasis on relationships. All three are
committed to cultivating long-term
business liaisons. 'Look at cars nowadays.
Essentially, they're all the same: they're
excellently built, they offer similar gas
mileage, you can get them in any colour
you want. So how can a vendor sell
himself? Old fashioned advertising isn't as
effective because people are overwhelmed
themselves to technology that might soon
be outdated. So, De Lage Landen has
configured a leasing package whereby
Unisys customers can freely exchange a
fixed proportion of their systems every
year, and thus stay on top of the fast-
changing technology curve.
'What we do is to take a difficult
competitive situation and turn it into an
opportunity. Vendor leasing not only acts
as an impulse to extra sales, but it often
helps cement an extended relationship
between the vendor and his cliënt. Thus,
that initial DAF truck becomes a vehicle
for a steady long-term revenue stream.
This is what long-term relationships are
all about.'