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How Should I Be Offering Financing to My Customers?

Posted January 28, 2019 by EnerBank USA

How Should I Be Offering Financing to My Customers?

For many businesses, it’s not uncommon for customers to underestimate the cost of quality improvements and other large purchases. This occurs across many industries, like real estate, automotive, home improvement, and home furnishing, to name several. Today, we’ll focus on the benefits of financing projects within the home improvement industry.

Why Offer Financing?

Research shows that 50% of home improvement jobs over $5000* are financed in some way. Plus, customers who use financing are more likely to increase their project scope, spending more to get what they really want. So, by just offering financing, you’ve increased your customer’s purchasing power.

What Type of Loan Does Your Customer Really Need?

The type of financing your customer needs (i.e., the kind of loan you’ll want to offer them) depends on what they’re purchasing and what it costs. In most cases, when purchasing something as substantial as a piece of property, financing is obtained directly through a bank or lender, rather than through the person or business selling the property.

In the home improvement industry, the type of financing a customer chooses may depend on the scale and cost of the project, along with how quickly they plan to pay off their loan. But, regardless of the type of loan a customer may choose—one thing is certain—customers want choices. Whether we’re talking about health care or home improvement—people expect the power to make their own decisions. And, when it comes to a customer’s financial situation, don’t assume how a customer will pay for a home improvement project.

To truly get a customer what they want, present them with all their options, and then let them choose the option that works best for them.

How Will Your Customer Obtain Financing?

There are a number of ways a customer can obtain financing for a home improvement project. Here are a couple of them:

Let Your Customer Find Their Own Financing

This option usually takes more time, which is why it tends to be relegated to substantial purchases. Like buying real estate or remodeling a home. Plus, when a customer obtains their own financing, they’re not as likely to commit to a specific contractor. This could end up impacting your ability to close the sale.

Offer Financing to Your Customers Through an Experienced and Respected Lending Partner

Choosing a lending partner with the resources to meet the needs of both your business and your customers is crucial. They need to have the necessary infrastructure in place to support your customer’s need. For example, having an established customer service model.

How Should I Be Offering Financing to My Customers?

At Regions | EnerBank, our goal is to make the process of financing as easy as possible. Those who work with us can choose from a variety of loans to offer their customers. Remember, just because a customer may be able to pay cash for their project, doesn’t necessarily mean they want to. They’ll appreciate payment options that allow them to keep their cash on hand for other things or help them avoid paying penalties to liquidate an investment. Customer loyalty increases when you present your customer with options, and then allow them to choose which works best for them.

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