Should Your HVAC Company Offer Financing?
There are many third-party financing companies offering partnerships to contractors. If your client needs financing, you suggest the thirdparty to them. This obviously benefits the financer, but what about your business and your customers? Should your HVAC company offer financing? There are some excellent reasons you should strongly consider this option.
Financing as a Sales Tool
When you or your sales team are making a sale, one of the most common customer objections is about cost and payment. Sometimes saying an option or product costs too much is just a customer’s way of shutting down a conversation. However, sometimes cost is the true objection, and financing can help you overcome this hurdle.
Financing can allow customers to afford the repairs and installation that they need. It can also help customers afford upgrades to the equipment that they want. You can sell more expensive furnaces, air conditioning systems, and other options when you’re offering customers the financing bridge they need to get there.
In fact, financing can also soften sticker shock. When your client agrees to, for example, install radiant floor heating but then balks when they realize the full cost. Offering payments in installments through a financing company can keep these customers onboard, instead of having to cancel or scale back the project.
Often, including financing options, including interest and payments, in the quote itself can help convert a customer whose primary objection or concern throughout the sales process has been cost.
Financing to Support Vulnerable Clients
When you’re talking to a customer who really needs new heating or cooling equipment but who can’t afford it, you naturally want to be able to fix their situation if you can. Offering financing from a company that you trust is a great way to help them without necessarily discounting your services or taking a loss on their work.
Financing as a Cash Flow Tool
Customers who are using financing are more likely to pay on time, and in full, than customers who are not. You know that these customers have the cash to pay you, and you may be more comfortable using more aggressive collections tactics sooner because of this knowledge. Overall, having customers who use financing will help you keep a healthier cash flow and prevent bad debt.
This can have many positive effects on your business. With a stronger cash flow, you can ensure you’re meeting your own payments to suppliers, meeting payroll, and making better long-term decisions for your business.
Financing to Keep Up with the Competition
Most of the leading HVAC companies currently offer to finance to their customers. That means that your company could need to offer financing to keep up with those companies and look as reputable and successful as the competition in the customer’s eyes.
Are There Drawbacks to Offering Financing?
There can be. Certain customers may balk at the idea of financing. Sometimes offering financing can also undermine the appearance of a high-end brand. Try to choose a financing partner that can appeal to the kind of customers you work with. Also, you can avoid the phrase “financing” and instead offer “payment options.”