The last few years have brought several challenges to the home improvement industry and its supply chains, but one thing has remained steady: homeowners want to upgrade their living spaces.
With interest rates rising and a looming recession, many home improvement professionals worry they might start seeing a slowdown in service and project requests.
During potentially slow periods of business, it’s important for the continued success of your home improvement company to start preparing your sales process to account for customers experiencing tight financial times.
One of the best ways to do this is by equipping your sales team’s tool belt with the ability to sell a monthly payment vs. a cash price. Keep reading to learn key points you and your sales team can make when pitching a monthly payment option to your potential customers.
Start off with the Financing Conversation
How do you plan on paying for the project? It’s one of the most important questions to ask your customer. By bringing up the topic of affordable financing early in the conversation, you can control and speed up the sales process. Instead of going back and forth with bid adjustments, you can build your quote accurately the first time by going in knowing what your customer can afford.
Long Term Investment
Position your service as an investment and have a candid conversation with your potential customer. Ask them how long they plan on living at their residence. This will help you determine if financing is a good option for them and allow you to tailor your bid for the correct term length to maximize their home improvement investment.
Sometimes home improvement projects are simply a matter of necessity rather than an investment, such as a roof replacement. When this is the case, you can pitch the idea of Opportunity Cost, which suggests that the cash spent on, say, a home improvement project, could be better invested in a higher yielding investment.
Save Cash for Emergencies
Life has a way of throwing curveballs and that is why it’s important for people to have a rainy-day cash fund. Considering nearly 65% of Americans have less than a month of income saved for emergencies, selling your customers a monthly payment option allows them to save cash for unexpected expenses in which they have no option but to pay with cash.
Make Their Dreams a Reality/Maximize Budget
Paying with cash for a home improvement project can often limit the scope of the project to the essentials. Position the monthly payment as a way to maximize their budget and turn their dreams into reality rather than settling for the bare necessities.
Uncertainty in Project
As a home improvement industry professional, you no doubt have experienced projects that had unexpected issues that significantly increase the cost of the project. These can cause customers a lot of stress, especially when they are already cash strapped. When you have a project that may contain uncertainty, pitching an affordable financing option with a built-in contingency fund to your customer can ease their worries.
Low Payment vs. Lump Sum
How often have you lost out on a bid because the potential customer experienced sticker shock? Probably more times than you can count. Instead of providing your customer with a project bid of $20,000, break it down for them by providing a monthly payment. This helps demonstrate their new hot tub, deck, or kitchen remodel can be affordable and attainable.
Similar to sticker shock, overall project cost is likely one of the most common objections your sales team experiences during the bid process. Instead of adjusting the bid to meet their cash budget cost, eliminate the objection by offering them the option of affordable monthly payments.
Cost vs. Benefit
With the rise of “buy now pay later” options, consumers are now accustomed with the idea of utilizing payments to make purchases. Position your pitch around the fact that they can enjoy their new investment sooner and at an affordable monthly price rather than having to wait to save up the cash.
Partner Forward with Salal Dealer Direct
From roofs, doors, and energy efficient windows to hot tubs, decks, and solar installs, Salal Dealer Direct is able to offer financing with some of the most competitive rates and dealer fees in the market because we’re part of a member-owned credit union. That means our profits go right back to our members—and our business partners—in the form of lower rates and fewer fees.
Our Dealer Direct Financing programs features:
- An online loan application with fast credit decisions and a high approval rate.
- Terms and loan amounts available to fit a wide range of budgets and project sizes.
- Partners pay ZERO dealer fees on our standard program.
Salal is serious about helping home improvement and solar contractors grow their businesses. With personalized support from a dedicated and experienced team of lending specialists, we take the time to get to know each partner’s business and tailor our lending programs to meet their unique needs and goals.
Click here to learn more about becoming a Salal Dealer Direct Partner.