More than a century of experience and innovation lies behind the Lennox name. Started in an Iowa tool shed in the 1890s, Lennox International has grown to become a world leader in the HVAC (heating, ventilation, and air conditioning) industry. The company’s Commercial Heating & Cooling segment provides a full range of products and solutions to owners and managers of commercial buildings.
- Herausforderung
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Lennox Commercial Heating & Cooling has been very successful at selling HVAC equipment for installation in new commercial, industrial, and public buildings. In 2007, as construction activity slowed, Lennox executives began to look for ways to increase sales in the less cyclical market for replacement equipment.
Lennox’s energy-saving portfolio of products and services provides comfort solutions that appeal to the owners of buildings with older, less efficient HVAC systems. Lennox’s sales team approaches the sizeable market for planned replacements through independent contractors who work directly with end users. Planned replacements usually provide an excellent return on investment, and energy savings may partly offset monthly equipment payments.
To increase sales in this dynamic and competitive segment of its business, Lennox created the Continuous Comfort™ Planned Replacement Program, which teaches contractors how to sell planned replacements. The program needed an easy and affordable financing option so building owners could pay for equipment acquisitions and take advantage of potential energy savings.
- Lösung
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In 2007, Lennox began searching for a knowledgeable and experienced financial services provider to help the company set up a financing program for commercial customers.
After several months of research, Lennox still had not found a provider that met all of its requirements. Most candidates lacked the resources, geographical coverage (USA and Canada), knowledge, and commitment to address complex transactions involving a manufacturer, direct sales people, independent contractors, and end users.
Late in what had become a challenging selection process, Lennox contacted CIT Vendor Finance. Drawing on its extensive experience in all elements of vendor financing, CIT proposed an innovative financing package that further strengthened Lennox’s already powerful value proposition. CIT Vendor Finance specialists developed an innovative seven-year lease-to-own structure that Lennox contractors now use as the cornerstone of their proposal to end users. This proposal considers energy credits, future energy savings, reduced maintenance costs, repair bills, and the CIT monthly payments to provide end user an estimated net cost of ownership, at very affordable levels. CIT finances project costs, including both equipment and installation. The Contractor signs a long-term service contract as part of a comfort solution. The entire process is geared toward creating a very user-friendly experience.
CIT trains Lennox sales staff and its commercial customers to understand how financing helps generate sales and create a better customer experience. In addition, CIT reduces the paperwork burden for salespeople and contractors by implementing a streamlined approval process and handling all administrative tasks, including billing.
- Ergebnisse
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Lennox International’s Commercial Heating and Cooling segment continues to grow strongly; sales rose by more than 16 percent in 2007. CIT spoke at Lennox’s January 2008 National Sales Meeting and has held numerous conference calls with its commercial sales force to spread the word about CIT’s financing capabilities. Lennox believes that consumer demand for high-efficiency HVAC equipment will grow, especially given rising energy prices and increased attention to environmental protection. In addition, the HVAC equipment in many buildings is more than 12 years old; such buildings are thus candidates for replacement equipment.
Lennox’s commercial sales force has had a positive experience with the CIT financing program and its potential to create new sales opportunities. School districts, municipalities, and other groups with limited capital spending budgets particularly appreciate the ability to offset equipment expenditures with energy savings.
