Does offering financing to customers intimidate you?
Intimidate – [in-tim-i-deyt] – v.: To make timid. To fill with fear.
Equipment expert and finance expert are not the same thing. Many equipment pros are amazing equipment experts but when the conversation moves out of their comfort zone…money…they’d prefer to let their customers figure it out on their own. Are you afraid to offer financing to your customers?
Here are 6 points to consider on the importance of offering a finance program:
- To sell anything, you have to embrace the “how are you going to pay” conversation. Financing enables you to easily address this matter, rather than hoping your customer can solve for it on their own. In a hugely break/fix driven business, hoping customers have this kind of cash on hand is a big bet to make.
- By leaving the finance process to your customer, working with you becomes harder. They have to research options, call a bank. And how long could that take? If you had a simple finance program and a person to hand them to, you demonstrate your commitment to service and meeting their needs.
- Many customers could pay cash, but that method may not be in their best interest. Many customers are unaware that a finance option for equipment may exist, so they deplete valuable cash reserves when a better alternative is out there. Sure, you’ll get your cash sale, but next time there is an issue and they need help…you may not be on top of their list because you didn’t bring the best solution to meet their needs.
- If competition offers financing and you don’t…you’ll lose sales. You’ll even lose in some cases where your equipment, people and service are far superior. Affordable monthly payments for expensive, non-budgeted items increase sales. It’s a fact really.
- Make more money. If a customer chokes on a $12,000 replacement quote, they’d easily swallow $300 per month. With their attention on the affordability of the payment, they are buying instead of beating you down to $9,500.
- Control the sale. You offer a quote. The customer is going to “think about it” or “look into the money” and you’re waiting…hoping…wishing. Unfortunately much of the time they are going to another provider and seeing if they can get a better deal. If that provider offers an easy finance option…game over. By offering a finance program you can control the sale from quote to close without other parties mucking up your profits.
A little motivation for you…
2015 research of equipment dealers and distributors indicates the consistent implementation of a finance program increased equipment sales an average of 19% for the year. The same research pointed to an increase in margins of 27% over the same time period.
If you’re not offering a finance program, don’t let fear hold you back. Be bold. At Key Credit, we keep the process of financing equipment easier and a great resource to turn shoppers into buyers. If you’d like to establish or improve the finance program you offer your customers, contact us today.