Consumer financing is a tool that can have a massive impact on your business, expanding your profit-earning potential and driving overall company growth. Keep reading to learn more about the benefits of financing and how to sell it to your customers more effectively.
Offering financing not only increases your closing ratios by 10-15%, but it can also increase your average ticket size. On average, customers are willing to pay 25% more when they’re spreading the amount over monthly payments when compared to an upfront, all-cash purchase.
By offering affordable monthly payment options to your customers, you can make home projects like renovations or upgrades more accessible to a broader customer base, which means you’re more likely to hear “yes” at the kitchen table, instead of having customers walk away due to high upfront costs.
Financing increases your lead volume, because the option of monthly payments caters to a broader range of budgets and therefore appeals to a larger customer base. By offering financing, you can tap into a much wider market of homeowners who want to engage in home projects but who may not have the available cash flow for a significant upfront investment.
There’s no doubt that the home improvement market has seen a boom since the pandemic. Our loan applications for major renovation projects like roofing, windows, and doors grew by 36% from Q1 to Q2 of 2021, while non-essential projects were still up by 23% during the same period. Offering financing enables you to get your cut of this increased interest in home improvement.
Everyone wants the best of the best, but not everyone has the cash on hand to make that happen. Financing is a win for you, but also for your customers. With affordable monthly payments, flexible payment options, and a range of options to choose from, they’re able to access top-of-the-line options while still staying within their budget.
Internally, offering financing can also be a boon to your staff by taking a considerable amount of work off your team’s plate. When you work with a financing partner like EcoHome Financial, we pay within 48 business hours of job completion, so you won’t have to worry about chasing down customers for payments. Plus, the application process is quick and easy—it can be completed digitally with the customer right at the kitchen table through a simple online form.
The most common issue when it comes to selling financing is that we assume our customers' financial situation. If customers aren’t taking advantage of your financing options already, it’s likely because they don’t know you have them available. Here are a few tips to help promote financing more effectively with your customers, so you can close more deals and boost your revenue.
1. Make sure the option to finance is clearly posted on your website, in any customer communications you have (e.g., newsletters, flyers, etc.), and on your social media channels.
2. Introduce financing to every customer. Remember, you can never assume what their financial situation looks like, so you have nothing to lose and everything to gain from mentioning the financing option.
3. Show examples of financing so customers can see the numbers in action. For example, show them what their monthly payments could be with three different amortization periods (120 months, 180 months, and 240 months). They’ll very quickly see where they can get the best value for their budget.
4. Use the language of opportunity rather than obligation. Financing is an opportunity to get what they want now through manageable monthly payments, rather than waiting until they have the cash available.
5. Take advantage of promotions to pass on savings to your customers. We offer a variety of seasonal promotions and offers, including 3-month deferrals (no payments or interest for 3 months with no dealer fees), 6-month deferrals, 9-month deferrals, 12-month deferrals, and rate buydowns. All of these can be used as an added incentive to help you persuade customers who may be on the fence.
Want to learn more? Get in touch with your Dealer Relationship Manager to understand how our products and services can help advance your business as we head into the new year.
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