Peter Hunt, a partner at the consultancy Invigors, demonstrated
that vendor programmes have generally failed to live up to
expectations.
What is telling is that 60 per cent of vendors surveyed had
changed finance providers over the last two years, he said.
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Where a vendor programme should be “cash-cows” for funders
providing annuity income, funders are losing businesses and
relationships because of ineffective strategies.
More shocking was that more than a quarter of vendor programmes
are achieving a penetration rate of under 10 per cent while more
than half of programmes could not even manage penetration rates
that surpassed 20 per cent. In reality, what vendors desire are for
penetration rates to actually exceed 50 per cent.
Thus, in general, finance providers wre under-delivering in
every major benefit area indentified by vendor decision-makers.
“Vendor finance providers are clearly lappier than their vendor
partners with the performance of vendor programmes,” Hunt said.
For all the rhetoric on building strong partnerships and value
creation, vendor finance is perhaps less sweet in practise.
Hopefully that spoonful of bitter reality provides impetus for
better standards in future.
