Every businessman, entrepreneur, and anyone who owns a business knows that growing one takes a lot of time and work. Beginner-friendly consumer financing solutions are one of the easier and best ways in attaining customer satisfaction as well as long-term business-consumer relationships. With this, you can also do better than your competitors at the same time. In this article, we will tackle how to start using financing and how it can help a growing business. The home improvement industry, in particular, benefits from offering home improvement financing. TGUC Financial can help you and your customers with loans for home improvement and other businesses to make your business grow faster.
Why is offering financing important to a business?
Offering financing, or payment options, to customers can also mean exceeding their expectations. This is because payment options are one of the essentials for a consumer’s experience. It does not matter how big the store is or even if it’s a mall, retailers can outdo them by giving their customers easier options in buying. This way, they are persuaded into buying more that they originally would.
Buyers see payment options as a way to purchase the product they want without feeling that they’ve spent too much. Understanding this is significant as it is also applicable in the home improvement industry. One of the reasons is that most homeowners don’t have that much cash to pay all at one go for a remodeling job.
Consumers expect that you can help by providing payment plans and options to get through the job. They’ve been offered payment options before at big box stores, so they also expect to be presented with one in this field of work, given that a large sum of money is involved to get the job done.
The Importance of Financing
When you use payment options as a way to sell, financing helps in closing the deal. While on the other hand, it is used as an easier way for customers to pay. It is significant to understand the difference between the two concepts: financing as a way to sell versus financing as a payment method.
Offering payment options helps your customer’s become more relaxed and comfortable. It gives them reassurance that they don’t have to pay right away, write a check, or give their credit card the same day the deal is made. It also makes your sales consultant’s job easier and helps them increase the scope of the job.
For example, you have a customer that needs help in upgrading to marble countertops or have the house done with new windows. If you offer them payment options they will be happier because they expect to be offered one. They might also help share what they’ve experienced with your business, such as telling their friends, “Yes, I bought from this company. They offered me a no interest payment plan/payment plan with interest waived as long as I paid the balance within the span of 12 months.”
What if your business does not offer financing?
Businesses that don’t offer financing to their customers have higher chances of losing deals which they could be winning, and missing some opportunities in increasing the size of numerous projects.
Leaving customers’ financing in their own hands is quite risky. They may change their minds and back out or, worse, cancel the deal during the loan process. Or they might encounter another contractor who offers financing which could persuade them into signing on the spot.
There are customers who just assume that you will be offering financing as a part of the deal. If you don’t, you might risk closing the deal with the project.
Listed below are some of the reasons why homeowners want or need financing.
They:
- Don’t want to wait, not until they have money in their hands.
- Want or need a project that is beyond their financial capacity.
- May not be sure of the amount the project they’re planning will cost.
- Are waiting for an expected cash payment (loaned money, tax return, etc.) but need to begin the project sooner.
- Are sophisticated users of credit who prefer non-cash payment.
- Like the idea of “using your money” to fund their home project.
- Prefer keeping their cash in case of additional options and accidents or mistakes.
- Plan on selling the property, but need the project done before listing.
Using home improvement financing to increase your average ticket size
Helping customers to be “Approved for More” is the key to using financing. This way it will increase your average ticket size while also giving your customer the best experience. Customers should be approved first to see whether they are qualified for additional credit. This credit can help them take advantage of additional products and services offered which can help turn a “nice” project into a “we love it!” project.
What are the two types of buyers?
Merchants are taught that the key to success is choosing just a few financing plans that are appealing to target customers. Next is to offer them to each and every customer during every sales presentation. There are only two types of customers. They differ in what kind of financing offers appeal to them both.
1. Cash Buyers
They like the idea of using “your money” to fund their improvement project or to have additional options which could help meet their vision of a home. These kind of customers also don’t mind being offered a no interest or no payment promotion payment plan (interest is waived if balance is paid in full within the given promo period).
2. Affordable Payment Buyers
They are more likely to go for a payment plan that fits into their cash flow. These kinds of customers are aware of what they can afford and what they cannot and know how to use their good credit in increasing the value of their project.
How to choose the right home improvement financing plans?
It is true that “offering financing to every customer on every sale can increase close rates, average job size and overall sales”. However, it is still important to offer more options to meet the needs of every customer because not all of them are the same.
- No interest, no payments (interest waived if balance is paid in full within the given promo period) – It allows customers who have in-hand cash to “use your money” for their home improvement project, while retaining their own funds to additional options for enhancement at the same time.
- Extended payments – These are suitable for customers who don’t have cash in hand to start their project, but can use affordable financing as a payment option to proceed. There are also cases where they use it for additional enhancements and special touches to increase home value.
Choose wisely what plans you will offer and promote financing whenever you meet a potential customer. This way, you will have a higher chance of closing the deal, increasing the project size, and growing your business all at the same time.
TGUC Financial Offers Home Improvement Financing
TGUC Financial can help you and your customers with loans for home improvement and other businesses to make your business grow faster. Contact us today.
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