Missing out on a sale at the kitchen table can be heartbreaking. You’ve put in the time, effort, and expertise to seal the deal, but what can you do when the customer doesn’t have the funds for your services? One sales tool that helps contractors close more deals is point-of-sale (POS) financing.
What Is POS Financing, and Why Is It Essential for Home Renovation Businesses?
POS financing, sometimes called point-of-need financing, allows customers to pay for your services gradually instead of upfront. It isn’t just another payment method; it’s a powerful tool for elevating your sales strategy.
While credit cards have long been a solution for financing purchases, POS financing differs because it allows you, the contractor, to offer a tailored financing solution that better fits the customer’s situation. By providing flexible payment options, you can break down financial barriers, enabling customers to move forward with projects they might otherwise postpone.
How POS Financing Can Increase Sales and Close Bigger Projects
Studies show that customers are more likely to purchase when a financing option is available. They’re also more inclined to spend more when there’s a financing promotion, such as a 0% APR offer. By offering POS financing, you can accomplish the following.
• Break down financial barriers, enabling customers to take on larger projects they might have thought were out of reach.
• Simplify the payment process encourages customers to finalize purchases they might otherwise hesitate to make.
• Attract a wider demographic, including those who might not have immediate funds for a full upfront payment.
• Encourage higher-value transactions now that a large upfront payment is not an issue.
• Enhance customer satisfaction, leading to repeat business and referrals. By offering flexible payment options, you can set yourself apart from competitors. In a marketplace crowded with options, providing POS financing can be the deciding factor for customers choosing between similar services.Steps to Start Offering POS Financing for Your Renovation Services.
Here are the steps to get started with offering POS financing to your customers:
• Partner with a financing company that has the capital to fund your customers and offers a variety of financing plans. Look for partners that cater to a broad spectrum of credit profiles, ensuring more customers can access financing.
• When closing a deal, let the customer know you have financing offers, including any special promotions like 0% APR deals. Customers are more likely to proceed if they can pay gradually without interest.
• Seamlessly connect the customer to a financial product. You don’t want a lengthy application process that runs their information through lender after lender.
Instead, choose a home improvement financing solution for contractors that sends their application to a lending network through a single application. This speeds up the process and increases the likelihood of finding customer financing.
• Equip your team with the knowledge and skills to promote POS financing effectively. They should be able to explain the benefits and address customer questions confidently.
• Use various marketing channels — like social media, your website, and in-person consultations — to promote your financing options. Highlighting these options can attract more customers and encourage higher-value transactions.
Measuring the Impact of POS Financing on Sales Growth
Plenty of promising stats show how POS financing increases sales, but you’ll only know how much it improves your business once you try it yourself. That’s why you should monitor its effectiveness. By analyzing customer purchasing behavior and measuring the impact of POS financing on sales growth, you can adjust your tactics and improve your metrics.
For example, if you notice that offers like 0% APR result in higher sales, you may want to prioritize lenders who offer that product, even if it means paying a higher fee on your end. Continuously refining your financing options ensures that you’re meeting evolving consumer demands and contributing directly to increased sales.
Conclusion
Chances are you’ve already used some form of payment solution like POS financing. If you didn’t see the best results, it might be worth changing your strategy to boost sales.
By offering competitive financing options, training your staff, promoting your offers, andcontinuously improving, you can unlock the full potential of POS financing. I hope these tips help you close more deals and grow your business.