Here’s what I know based on concrete statistics:
Financing makes the average sale price go up.
And the better the terms, the higher the sale.
Because here is the truth—most homeowners get sticker shock when you tell them their project will cost $10,000 or $20,000 or $40,000 or whatever the number is.
But when you come in with financing, you soften the blow.
The thing is, there is a right way and a wrong way to offer financing.
Most contractors use financing as a last-ditch attempt to salvage a sale. This is the WRONG way.
What you do is sit down with the homeowners and say, “Mr. and Mrs. Prospect, we offer several financing options to make this project affordable. How much money do you feel would fit comfortably into your monthly budget to make this project happen?”
(Remember, this is at the beginning—not the end—of the sale.)
If the prospect is not 100% dead set on paying cash upfront (many aren’t, and are open to different options), they will either give you a number or say, “Well, I don’t really know.”
If they don’t know, you say, “What about $200? $300?”
When the prospect gives you a number, say, “OK, you know what, Mr. Prospect? I’ll make you a promise. We can absolutely perform the project you want within your budget of [number] a month.”
If necessary, you can always negotiate the length of the contractor later to make the price fit.
Offering financing this way allows you to close deals faster, easier, and at higher prices.
So when contractors tell me their customers don’t need financing because they all have money, I respond, “That may be true, but how many deals are you losing because the customer did not have the money right then?”
“That may be true, but how much money in upsells are you losing when your customer has to fork over $10,000 at once, instead of $850 per month?”
One of the best ways I’ve found to offer financing as a first resort is through the GreenSky® Program.
The GreenSky Program is the real deal. Upfront payments. Higher credit limits. Instant credit decisions. No paperwork. No enrollment fee.
Your customers apply for credit during your sales presentation through the GreenSky website, by phone, or through the mobile app. They then get a credit decision almost immediately—sometimes in as little as five seconds.
And when they’re approved, the amount can actually be for more than the cost of the project. This allows you to easily make upsells while staying within your customers’ budgets. Who could possibly pass up replacing their entry door for another $10 per month or upgrading their countertops for $25 per month?
Bottom Line: When you lead with financing through companies like GreenSky, you immediately get your prospects thinking about their projects in small, manageable monthly payments—not a five-figure sum that’s going to leave a gaping hole in their bank accounts.
You’re much more likely to get a “yes”… and for a higher price.
Find out more about the advantages of offering financing through GreenSky on our official MYM GreenSky® page.
Basically, it’s a contractor’s financing dream—and a tool that will melt away price resistance in practically all of your prospects.
P.S. Ever wonder how the heck car dealerships are so good at upselling? I’ll spill their one simple secret in my next post.
* All financing is subject to credit approval and credit qualification. Financing for GreenSky® consumer credit programs is provided by federally insured, federal and state-chartered financial institutions without regard to race, color, religion, national origin, sex or familial status.
© 2016, Rich Harshaw. All rights reserved.