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BUS | How to Strike Up a Conversation about Financing Options

 September, 20th 2017     Comments     Views

By John Harris

Most manufacturers in the HVAC industry strongly support the idea of their local contractors offering financing options to homeowners. When it comes to contractors, however, it’s a mixed bag. Consider these three distinct groups:

  • Proponents: Contractors who strongly believe financing options are an indispensible tool to help sell and who have factored that tool into their business and selling processes.
  • Detractors: Contractors who say, essentially, “All my customers pay cash. We have a system that works so I don’t feel the need to offer financing.”
  • Everyone else: Contractors who may offer financing, but only when they think the customer can't afford the project; and when they do offer it, it’s usually to save a sale rather than to make a sale. There’s a big difference.

With those general groupings in mind, here the two most common scenarios for contractors to start the conversation about financing options, and tips for how to do it effectively:

Making a Sale

If those involved from the contractor side—the scheduler and the technician or salesperson—are coordinated in their communications, they can pre-empt any worry the customer might have about price.

The ideal time to make a sale is when a potential customer first contacts the company. The person answering the phone (the scheduler) takes the needed information and then expertly does some “seed play.” Something like this: “One more thing. Make sure when Justin comes out to your house you ask him about our payment options. You’ll want to hear about how easy it is to get your project completed.” And leave it at that.

Next, when the technician or sales rep arrives at the home, they should essentially do the same thing as part of building rapport with the customer: “One thing before I go outside and start testing your equipment: Remind me to tell you about our payment options, including a 12-Month Same-As-Cash loan or a loan with a low monthly payment.”

This way, both the sales rep and the scheduler have pre-empted any objection about price. You’ve now given the customer two simple options to pay for what they really want, or need, especially when they’re in a fix-it-or-replace-it-now situation.

Saving a Sale

A technician’s or sales rep’s conversation with the customer will sometimes go like this. Customer: “Wow, I don’t know how I’m going to afford this,” or, “I didn’t think it was going to be so expensive.” Technician: “Actually, we have two great payment options to help you get the project done quickly—a same-as-cash loan or loan with low-interest and low monthly payments. If you’re interested, you can apply and get a credit decision in just a couple of minutes using our mobile loan app.”

While bringing up the financing topic at this point in the conversation is definitely needed, it really should have been done earlier. Based on what the customer just said, you now know you're dealing with someone who either a) can’t afford what you’re offering, or who b) doesn’t want to write you a check or disrupt their savings or investment accounts. 

Ideally you would prepare the customer ahead of time to consider how payment options could be a better choice for them (see above: “making a sale”). Then they don’t have to make that decision in the moment.

Every contractor who offers payment options wants the customer approval rate to be as high as possible. That rate has less to do with a bank’s underwriting criteria, and more to do with the behavior of that technician or sales rep. If they offer payment options 100 percent of the time, as described, the approval rate will be high because homeowners generally have great credit. That way, you’re looking at the universe versus a small slice of customers that have not been good stewards of their credit. As a result, you’ll raise your close rate and your company revenue, all while getting more work done.

There are many ways to get the message out about your company’s payment options. Some work better than others. Whatever method you use really depends on the factors surrounding your business and what you are trying to accomplish. In the meantime, remember that whether you’re making a sale or saving a sale, there’s a conversation about the convenience and ease of payment options just waiting to happen.