You know, financing and the sun have a lot in common.
Sunlight repels vampires, forcing them to flee to the shadows.
Financing does the exact same thing to many contractors.
Financing tends to have a “vampire exposed to sunlight” effect on contractors.
The problem is, the thought that financing costs too much money—or that your customers don’t want it—is a malicious myth that’s spread for way too long.
So allow me to drive a wooden stake through the heart of this tall tale and kill it once and for all.
Sharpen those sticks. Here we go…
First thing’s first: Get it out of your head that your customers don’t want or need financing!
Nobody—and I mean nobody—wants to shell out $8,000 to $40,000+ at one time for a home improvement project. Even if they have the cash in their bank account right that second.
It’s like the time it cost me $8,214.70 at the dentist to fix all the things wrong with my six kids’ teeth (long story short, we switched insurance plans and didn’t take them to the dentist for nearly two years).
Yeah, I had the money right then and there. But I wasn’t keen on spending it all at once.
Fortunately for me, the dentist offered financing plans, including a 12-month, no-interest option.
That worked out to $684.56 per month—still a good chunk of change, but a far cry from $8,214.70. Plus, I could avoid interest if I paid in full in those first 12 months.
Taking the financing was a no-brainer.
So just because your customers can afford to pay in full when the job is done does not mean they want to. In actuality, they’ll jump at the chance to finance their projects and make their payments more manageable.
Okay, so financing is good for your customers… but what about you?
Most contractors are dead-set that financing costs them money.
But here’s the truth: The better the financing, the more your customers spend.
Take a look at these numbers a major home improvement company recently posted:
- $5,519 – Average sale with “no interest if paid in full in 12 months” offer
- $6,804 – Average sale with “no interest if paid in up to 36 months” offer
- $7,466 – Average sale with longer term, low APR finance offer
The stats don’t show the average sale when no financing is offered, but let’s be real—it’s going to be lower, probably around $4,500.
Let me give you an example from my own experience…
A few years ago, closet-organization company I work with told me their average sale was $2,800.
I signed them up with one of MYM’s preferred finance partners, and their first attempt at using it resulted in a $7,700 sale—nearly three times their average.
According to the company, their customer said, “Since the monthly payment is so low, let’s do all three of our closets right now instead of one.”
A lot of homeowners will balk at a $12,500 price tag for new windows. But most of them won’t bat an eye at, say, $249 per month.
Bottom Line: You break down payments into small, manageable monthly chunks, you give your customer some wiggle room to spend MORE on your services.
It’s literal money in the bank.
And there you go. I’ve not only slayed the outdated notion that financing costs you money (R.I.P.), but I’ve also proven it will boost your sales big time.
Check other posts for info on what I firmly believe is the absolute best financing program for remodeling contractors.
I say that with 100% confidence because this company has removed literally every single problem contractors have with financing: Delayed payments, long approval process, mounds of paperwork, high fees… they’re ALL gone.
This financing program’s services can and will completely revolutionize your business and cause your sales to soar.
P.S. Ever notice how car dealerships sell their vehicles in monthly payments? Yeah, that’s on purpose. I mean, compare these two options:
“Get a new, fully-loaded 2017 Chevy Silverado for $45,000.”
“Get a new, fully-loaded 2017 Chevy Silverado for $499 per month.”
Which sounds more appealing to you (and your bank account)?
© 2016, Rich Harshaw. All rights reserved.