Consumer Financing in the Home Improvement Industry: Best Practices
Published June 06, 2024
Consumer Financing in the Home Improvement Industry: Best Practices
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Consumer Financing Makes Your Services Affordable
The most common obstacle that derails a home improvement project is the cost of the job. Homeowners may have every intention of moving forward with the project, but they are unable to give you the greenlight because they simply can’t afford to pay for the work in full, upfront, at the time your services are performed.
Even if your estimate for parts and labor beats the other guys’ down the street, paying for the work in one lump sum is not an affordable proposition. But without any other alternative except to wait until the project becomes more affordable with the customer’s monthly budget, the work is put off to another time. A later date that isn’t guaranteed to arrive and leaves your business waiting to generate revenue.
Consumer financing alleviates the affordability issue by giving your customers the option of paying in one lump sum or paying over time with low monthly payments. This reduces hesitation over the cost of the job, empowering customers to make a confident decision for moving forward with expensive projects they otherwise may have avoided.
Not only does financing put the cost of the job within reach for your customers, it can also empower them to request additional services or products for a higher average transaction value with each project you take on.
Keep Your Profit Margins Healthy
Providing financing options to your customers will ensure that you aren’t taking any unnecessary risks with your profitability. Many home service professionals who are struggling to survive in a competitive marketplace will try reducing their prices to drive traffic and attract new customers.
But why cut into your profit margins if the business is already on shaky ground? Low-balling your estimates to potential customers only lowers your profits and starts to make those new customers wonder about the quality of your work.
It’s a no-win situation that slows business growth and scares new customers who worry they may have hired the wrong contractor for their home improvements.
How Fund My Contract Can Benefit Your Contractor Business
Our powerful network of third-party lenders is dedicated to giving contractors every advantage for meeting their sales projections, increasing revenue, and taking on more jobs from a wide range of both new and existing customers.
Today’s customers are growing more frugal as they want to stretch their dollar. With the cost of home improvements and emergency home repairs going up, the affordability of mounting these types of jobs is getting further out of reach.
Fund My Contract offers payment options that can benefit your business by giving your customers more choices of how they want to pay for the work they need. There are other benefits to consider.
Repeat Business
When your business meets your customers’ needs and provides solutions to their problems, you position your business as an authority in the field. That builds trust with your customer base and the greater the customer satisfaction, the far more likely customers will do repeat business with you in the future.
That’s important for the long-term success of your home improvement business. When your customers seek out your business time and again, they value your skills and your services.
Customer Satisfaction
Happy customers are often enthusiastic about telling their friends and loved ones about the services you provide and your level of knowledge and expertise in the field. Potential customers will always read the reviews and testimonials of previous customers when making any major purchasing decision.
When you offer financing solutions through Fund My Contract, you can keep your profit margins healthy, generate faster revenue growth, and earn the trust of more customers who will recommend your services to anyone interested in hiring a dependable contractor for their own home renovation projects.
Customer Financing Best Practices
Financing as a Sales Tool
You want your customers to know you offer financing from their very first interaction with your business. So it helps to spread the word early and often by informing new customers about your customer financing programs in all marketing materials and advertisements. This information should be considered just as important as the name of your business, the address where it’s located, and the type of services in which you specialize.
Your marketing is the first thing potential customers see when they’re seeking out businesses such as yours to provide contracting and home repairs services. If the customer is already aware that your business offers accessible financing options, that customer can rest assured they have choices when the time comes to pay for those services.
Be Prepared to Answer Price Objections
You can tell the customer wants to move forward with that home improvement project but there’s something holding them back. Before you know it, the customer wants to take some time to think it over. That’s time spent not generating revenue and chances are the customer is going to start comparing your prices against other competitors who might offer a lower estimate with quality of work to match.
Before the conversation turns to a waiting game, inform the customer of your financing program options and see if the idea of paying in low monthly installments makes a big difference. In most instances, the thought of paying for the job in full, upfront, is what has many customers thinking twice about the work they need you to do.
Know Your Financing Programs But Tread Lightly
The fastest way to lose a potential customer is by confusing that individual with too much information. This advice is offered to those business owners and representatives who are eager to explain how these programs work and the benefits of each that can best serve the customer’s financial needs, but inundate that customer with too much technical jargon and details that make their eyes gloss over.
Always answer questions in full and to the best of your ability, but don’t overdo it by overselling the programs that your business provides. It will only confuse the customer and make them less confident about engaging your services as a contractor and participating in the consumer financing programs you’ve developed with our team of third-party lenders.
The Slam Dunk
When you are presenting your costs of labor and materials to the customer, follow up with the availability of consumer financing to close your pitch. This last reminder sticks in the head of the customer, giving him or her the ability to think about the costs of the project and weighing the options between financing the work or paying it all off in one lump sum.
How and when you present the opportunities for financing is up to you and it may be during a different part of the conversation with each client. But always try to conclude your pitch with a final reminder that your business has financing options for those customers who qualify.
Gain the Competitive Advantage with Fund My Contract
Contractors who want to stand out and get a competitive edge on the competition would do well to incorporate customer financing programs into their normal daily routines. Our third-party lending network has worked with businesses big and small in industries that are as widely varied as the businesses themselves. We take what we do very seriously because what we do is help secure the future of your contracting business for the long-term.
If your business is having some challenges with cash flow or can’t seem to reach those sales numbers that can skyrocket your contractor business to new heights, give us a call today and let’s talk about how we can solve those problems and put your contracting business on the right track.
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