Until recently, most HVAC customers paid for services and products with cash. Today, many homeowners prefer to finance their purchases.
HVAC financing empowers your sales team to close more deals while preserving your company’s cash flow. Here are the top benefits of providing customer financing.
Financing allows your customers to upgrade their HVAC equipment or do a larger project without having to dip into savings or add costly accessories. It enables them to choose a better, more energy-efficient model and save money on their energy bills in the long run.
Many online financing services allow homeowners to enter their income, address information, and other data and know within seconds if they’re approved. It simplifies the buying process and leads to quicker sales.
Finance companies for HVAC contractors see a higher percentage of repeat and referral business than those that don’t. However, implementing a financial strategy should be carefully thought out to ensure it makes sense for your business in the long run. Some plans include recording payment information in your customer database and reducing non-payment by incentivizing customers who pay on time. If you need clarification on what’s best for your company, consult with an industry professional to develop a plan for success.
Increased Customer Satisfaction
Offering HVAC customer financing is a great way to increase sales and boost revenue, but it’s also an excellent strategy for improving your client satisfaction. Most homeowners don’t have the cash to pay for an entire new HVAC system upfront, so financing allows them to get the system they need without having to dip into savings or add to their existing credit card balance.
The same holds for higher-priced equipment, such as energy-efficient models. When customers can spread the cost of this equipment out into a series of monthly payments, they’re much more likely to purchase it and experience significant energy savings down the road.
To maximize the benefits of your HVAC customer financing program, make it a point to mention it in all of your marketing materials and during your bid presentation at each home. Sign up with a lender that offers contractor financing and make it part of your everyday business processes so it becomes second nature for you to provide this option for all your clients.
Increased Customer Loyalty
When your clients can afford your services with flexible payment options, they will likely be more loyal to you. They are more likely to return to your business for future HVAC needs if you have earned their trust.
Providing customer financing can also be an effective way to upsell your customers. By showing them how they can purchase a higher-end unit or add additional accessories by making small, manageable payments, you can close bigger contracts to drive more revenue for your company.
On the downside, however, homeowners must carefully consider their financing options and repayment terms to avoid ending up with expensive debts on top of their original purchases. This is a significant drawback that should be considered in conjunction with the strategic benefits of financing. In addition, several consumer finance companies offer enticing introductory rates and deferred interest periods that can sway consumers to take action.
Financing allows customers to spread the cost of a system or service over a set period. This can save them from having to dip into savings, use their credit card, or even pull equity out of their home.
Offering financing can also increase sales. Many customers have sticker shock when they realize how much it will cost to replace or repair their HVAC unit, but the ability to make payments over a time frame can ease that anxiety and lead to more purchases.
HVAC businesses can offer their in-house financing or partner with a third-party lender. Some lenders take on all of the risk in exchange for a flat percentage fee. Others streamline the process by having customers enter their information online and find out in a few seconds whether they’re approved.
In addition to increasing sales, offering HVAC customer financing can encourage referrals. When customers have a great experience with your company, they want to share that with their friends.