You’ve heard the commercials: “No payments for 90 days!” “12 months same-as-cash!” “Payments as low as $49/month!”
Big box retailers love to advertise special financing promotions to get buyers to come off the fence and make a purchase. And guess what? It works.
Actively promoting financing can be a valuable tool in your sales and marketing plan. These three tips can get you started and help you achieve financing success.
- Understand your financing programs inside and out. Make sure your sales people are confident in all aspects of their sales pitch – financing included. Be sure to understand the cost of each financing program you will be offering. Different programs come with different costs and may include “discounted bids” for some of your riskier customers. You need to know where your margins are and what you can afford to accept on each deal since those costs cannot be passed on to your customer directly.
- Price your products accurately. Being the “low-cost lender” isn’t always a good thing. Very few companies can afford that. Most companies price their products to reflect the value they offer their customers. Value can be anything from proprietary technology, exceptional service or even financing. When pricing products, you may want to consider the average finance cost and build it into your pricing. Keep in mind that raising the price for a customer based on the fact that they are choosing to finance is against Truth-in-Lending laws.
- Promote financing and offer it to every customer. Contractors that are the most successful with financing promote it in every sale or marketing channel possible and offer financing as an option to every customer. Offering a finance option up front can help discourage objections and show that your product or service is affordable. Here are some steps you can take to make the most of your in-house financing options:
- Always include “Financing available to qualified credit” in every customer facing document and all advertising materials.
- Choose a special promotion or two that you can feature a few times per year. For example, promoting a “3 months deferred” option during tax season could persuade a customer to start a project now instead of waiting for their return.
- Offer EVERY customer at least two positive payment options. For example: “Mr. Smith, the cash price is $4,000 or we offer low monthly payments of $80 per month. What would work best for you?” Make sure to set the tone at the beginning of the presentation that the purchase will be affordable.
- Review your customer’s application before submitting it. Make sure that all fields are complete to give yourself the best chance for approval on every loan.
Following these three tips will put you on the right path for financing success.
If you need assistance understanding Foundation Finance’s programs or want to know what promotions are best for your business, contact our Dealer Support Team at 855-241-0024 ext. 5012 for a personalized training or for a list of our dealer resources.