Why Offer Consumer Financing?


 Financing Will Benefit You and Your Customers

Offering Consumer Financing Part 1

By Michael Hunter
Head Coach & Trainer
Business Development Resources (BDR)

Today’s customers finance nearly all their major purchases. In fact, many of them may not have a choice. A recent survey conducted by GoBankingRates.com revealed that 69% of Americans have fewer than $1,000 in savings, leaving them unable make large purchases without the aid of financing.1 

Your customers are already using financing for most of their large purchases. According to Consumer Reports, “In September of 2013, 84.5% of shoppers who acquired a new car used financing.”2 This statistic is nearly 4 years old, and usage of consumer financing has only increased since then.

Other commonly financed purchases include homes, college educations, major appliances, smart phones, and the list continues to grow. 

The HVAC industry needs to catch up!

Offering financing benefits your customers by:

  • Allowing them to use their money in other places because they are not tying up a large chunk of it in a new HVAC system purchase.
  • Providing them a return on investment (ROI). 
  • Allowing them to keep cash on hand for emergencies. 
  • Offering them access to higher efficiency equipment that provides a greater ROI.
  • Allowing them to purchase more accessories to give them a system that more completely meets their needs.

Offering financing benefits you by:

  • Giving you the opportunity to discuss the benefits of high efficiency equipment and accessories that your customers may otherwise be unable to afford. 
  • Increasing your average sale. The average Heil® equipment sale is 30% higher with financing than without.       

The following examples illustrate how offering financing gives consumers beneficial options:

Example #1: You do not offer financing, so the full price of the sale must be paid in one lump sum payment upon job completion.

There are two ways customers can make this lump sum payment:

1. They have the cash on hand. This option is unlikely based on the statistic about the savings of the average American mentioned above. 

2. They put the cost on a credit card or separate loan. This option raises two additional issues: 

  • 63% of Americans aged 18-29 don’t own a credit card according to Bankrate.com.3
  • Whether using a credit card or a loan, they are essentially financing from another source. 

Example #2: You offer financing, so the price of the sale can be paid through affordable monthly payments that fit your customer’s budget. 

  • Most customers are accustomed to financing large purchases and most likely already use some other source of financing. Why shouldn’t you be the one to offer them financing options and tie them to your business?
  • Affordable monthly payments give customers the ability to upgrade to higher efficiency equipment and add accessories while still maintaining monthly payments they can afford.

Consumers today are accustomed to financing, so our industry needs to catch up and share our financing options. Remember: what is easier to sell: one lump sum price or an affordable monthly payment?

We will discuss how to start offering consumer financing in Offering Consumer Financing Part 2 

Click here for information about participating in the Heil financing program. 

About the Author: 
Michael Hunter has 18 years of experience in the HVAC industry spanning multiple roles in distribution, as a territory manager and as the highly successful general manager of a business in Idaho. He is now a trainer and coach for Business Development Resources (BDR) who leads the Foundations for Profit & Growth training class.    

About BDR: 
BDR is the premier provider of business training and coaching services to HVAC contractors. BDR is an authorized training provider for International Comfort Products.

1GoBankingRates.com, “69% of Americans Have Less than $1,000 in Savings,” September 19, 2016
2Consumer Reports, “Consumers rely on car financing more than ever,” September 6, 2013
3Bankrate.com, “More millennials say 'no' to credit cards,” September 8, 2014