What You’ll Learn
- We’ll tackle the common contractor question: “How to offer financing to my customers?”
- Discover how customer financing can help grow your solar or home improvement business in more ways than one.
Business is a battlefield. We’ve heard this phrase thrown around at networking events and meetings. While we don’t necessarily agree with the viewpoint, we understand the sentiment. After all, the last few years have felt like a gauntlet for many business professionals. From COVID and supply chain issues to a competitive labor market, inflation, and a home improvement boom, there certainly is no shortage of battles being waged in the home improvement business-scape.
The savvy home improvement professional looks ahead to the future, making incremental changes to address short-term challenges while never losing sight of the long-term goal. Leaders with this mindset help their businesses survive these tough times and thrive in them.
One way to take your home improvement business from simply surviving and put it on a path to sustainable growth is by offering affordable customer financing. In this article, we’ll explore six ways that affordable customer financing can help you achieve your home improvement business’s growth goals, even during challenging times.
Win Bigger Jobs
Very few people have the cash to pay for home improvement projects or repairs out of pocket, which severely limits the size of the job. However, customers are more likely to say yes when offered financing and monthly payments. Further, this makes the upsell to a better product or additional services that much easier. But we’re not just saying this because it sounds good. Several studies and surveys have shown that the average project size increases 15-30%.
Close More Sales, Faster
Offering affordable customer financing not only increases your chance of winning bigger jobs, studies have found home improvement companies that offer financing also see an average increase of sales by 32%. This average boost in sales can be attributed to ease of use, the elimination of large lump sum cash costs, and the ability to provide an immediate solution to your potential customer’s problem.
Be the Hero for Your Customer
How can being a hero for your customers help you grow your home improvement business? Easy. Happy customers tell friends and family. This word-of-mouth marketing carries more than its weight in gold in the home improvement industry. So, how can you be their hero? It all depends on the type of home improvement service you offer.
Are you in HVAC, roofing, or another home improvement service where your customer typically calls when an issue arises? These unexpected expenses can leave customers stressed out and wondering how they can afford to remedy the problem. In fact, a survey conducted by Bankrate found that 56% of Americans are unable to cover an unexpected $1,000 bill. By offering affordable financing, you save the day and can instantly become the hero for your customer.
Do you provide a home improvement luxury service such as deck and patio construction, landscaping, or hot tub sales and installation? While these may be considered luxury services, customer financing allows you to create the space of your customer’s dreams with affordable low monthly payments—quickly becoming the hero of their story.
Eliminate Sticker Shock
How many times have you completed a bid for a project to see your potential customer’s jaw drop when they see the approximate final cost? Probably more than you can remember. Many homeowners can be unaware of the true cost of these repairs or services until they need work done. Then, when they see that bid, they understandably tend to experience some sticker shock. With financing, though, contractors and sales professionals can ease the pain by showing the affordability of a high-ticket project over time through low monthly payments.
Reach More Customers
By providing easy access to affordable financing, your home improvement company can easily grow its market share by reaching a wider range of consumers. In fact, industry pulse data from home improvement SAAS providers, such as HomeAdvisor, estimate that as many as 70-75% of home improvement projects over $2,500 are financed. That means without offering financing, you risk capturing as little as one out of every four bids.
Get the Edge Over Your Competition
The home improvement services market is already saturated and growing your business’ market share will take differentiation. Offering customer financing not only makes it easier for your customers, it also gives you an edge over competition that requires cash payment for services.
Ready to Grow Your Business with Affordable Financing?
At Salal Dealer Direct Lending, we partner with contractors around the country to provide customers with low monthly payment options that fit their monthly budget while allowing solar and home improvement contractors to get paid immediately.