Tuesday Tuneup- #21
Your customer needs to be able to afford your offer
Happy Tuesday Everyone!
I want to thank one of my followers on LinkedIn that inspired this week's edition.
He works in the home improvement world and asked “I feel like my customers love the product and see the value in working with us, they just can’t afford all we have to offer. Any ideas?”
Happy to lend a help to a sales person in need…. so let’s jump in.
1. Flexible Financing Options
Providing a range of financing options can make your products more accessible. Financing allows customers to spread the cost over time, making it easier to fit large expenses into their budgets.
Example: A homeowner interested in installing solar panels may find the upfront cost daunting. Offering financing options such as low-interest loans, leases, or power purchase agreements (PPAs) can make solar installations more affordable. Many financing plans also include low or no upfront costs, which can be particularly attractive.
Fact: According to a study by the Lawrence Berkeley National Laboratory, financed solar installations have grown significantly, with over 70% of residential solar systems installed in the U.S. being financed through loans, leases, or PPAs. This trend highlights the importance of financing in making high-cost home improvements more attainable.
2. Tiered Pricing and Bundled Services
Offering tiered pricing and bundled services can cater to different budget levels, allowing customers to choose options that best fit their financial situations.
Example: For a kitchen remodel, you could offer three different packages:
A basic package with essential upgrades
A mid-range package with additional features like upgraded countertops and appliances
A premium package with high-end materials and custom design options
Bundling services, such as combining a new roof installation with gutter replacement at a discounted rate, can also provide value and make larger projects more appealing.
3. Promotions and Discounts
Temporary promotions, seasonal discounts, and special offers can provide the necessary incentive for customers to commit to a purchase. Just remember, a good offer must have an expiration date…. or its just lower pricing.
Example: Offering a discount on HVAC systems during the fall and spring, when demand is lower, can encourage homeowners to upgrade before the peak seasons. Alternatively, providing a discount for customers who sign up for multiple services at once, such as a roof replacement and solar panel installation, can help them save money while increasing your sales volume.
4. Energy Savings and Long-Term Value
Educating customers on the long-term savings and value of your products can help justify the initial investment. Energy-efficient home improvements, such as insulation, energy-efficient windows, and solar panels, can significantly reduce utility bills over time.
Example: A homeowner considering energy-efficient windows may hesitate due to the higher upfront cost. By showing them how much they can save on heating and cooling bills each month, and how the windows will pay for themselves over time, you can make the investment more attractive.
Fact: The U.S. Department of Energy states that homeowners can save up to 15% on heating and cooling costs by installing energy-efficient windows. Over several years, these savings can offset the initial investment, making it a financially sound decision.
5. Deferred Payment Plans
Deferred payment plans allow customers to start their projects now and pay later, providing immediate relief without immediate financial pressure. This is a great place to partner with finance companies to “Bridge the gap” so you, as the contractor, aren’t funding this payment plan on your own.
Example: A roofing company might offer a deferred payment plan where the customer doesn't have to make any payments for the first six months. This option can be especially appealing to homeowners who need urgent repairs but are currently short on funds.
6. Partnering with Financial Institutions
Partnering with banks or credit unions to offer specialized home improvement loans can provide customers with more financing options.
Example: A home improvement contractor partners with a local credit union to offer low-interest loans specifically for home improvement projects. By facilitating this connection, you make it easier for customers to secure financing and proceed with their projects.
7. Subscription and Membership Models
Consider offering subscription or membership models for ongoing services and maintenance. This approach provides a steady revenue stream for your business while spreading out the cost for customers.
Example: An HVAC company might offer a membership program that includes regular maintenance, priority service, and discounts on repairs and replacements for a monthly fee. This model ensures that customers receive continuous value and can manage their home improvement expenses more predictably.
Practical Implementation Tips
Train Your Sales Team: Ensure your sales team is well-versed in all available financing options and can clearly communicate the benefits to customers. Role-playing scenarios and providing scripts can help them handle objections and explain complex financing terms effectively.
Use Visual Aids: Create brochures, charts, and online calculators to help customers understand the financial impact of different payment options. Visual aids can simplify complex information and make it more digestible.
Customer Testimonials: Share stories and testimonials from other customers who have benefited from your financing options. Real-life examples can build trust and demonstrate the practical benefits of your solutions.
Follow Up: After presenting payment options, follow up with customers to answer any questions and address concerns. Persistence and excellent customer service can make a significant difference in closing a sale.
Final things to keep in mind
If you take anything from this weeks edition, let it be this…..
You as a sales person should know your customer best and you should be looking to refine your offer into something that makes sense for the customer. We all want to sell the Ferrari, but if our customer has a Honda budget, then we need to help them buy the Honda. Don’t get stuck in your own “Perfect World” and listen to your customer….. ALWAYS.
Finally, If you found this edition enlightening or helpful, Please share it with somebody who could use the advice (We all know somebody). The more ideals I get, the better the content for all of us. If it brought you none of that and was a complete waste of time…. then please let me know! I appreciate the help either way!
Thank you for reading, and best of luck in your sales journey!
-Steve