How to Include Financing Costs in Your Selling Price

Sales Byte®

How to Include Financing Costs in Your Selling Price

Few contractors actively offer financing to their customers, believing that it is too much trouble or that their customers will object to paying for the cost of financing. If that were true then none of us would every buy a house, a car or use a credit card. We must see ourselves not as a contractor, bidding, estimating and quoting prices, but as a retailer, offering our products and services to consumers. As a retailer, we should market ourselves and follow the proven business practices of the best-in-class retailers such as Home Depot, Apple Computer, Amazon and even Wal-Mart. Every retailer in the world gives their customers the choice of using financing and so we must as well.

How do retailers account for their financing costs? They include it in their marketing budget, the same as any other cost-of-business. Since you don’t have any historical data showing you what your actual financing costs are, begin with adding 1% or 2% to your marketing budget, over and above your current credit card and bank fees. Then track your financing costs as a separate budget line item and make future adjustments to your pricing book as necessary.

Example:
If your pricing divisor was .52, recalculating your divisor with an additional 2% added to your marketing budget will change your divisor for all of your sales to .50. Instead of selling a job with $5,000 in equipment, material and labor for $9,615 you would sell it for $10,000, whether they used financing or not.

Sales Appointment Confirmation

It may seem like insignificant task, but following up the scheduling of a sales appointment with a written email confirmation (see below) generates many important benefits in the forging of a relationship with a potential lifelong client and therefore should be a required element in your overall sales process. These benefits include:

The attached Confirmation Email is generated with just a click of a button within TRUST PRO® online as part of the scheduling process. This can easily be created as an email template within Outlook so that you only need to enter the potential clients email information and the date and time of the appointment.
Mark Sims is President of Chameleon Management Solutions, Inc. and is the creator of TRUST PRO® online, the only fully functional cloud based HVAC contracting business management software.

There is less chance of a missed appointment
It shows that you are a professional company and that selecting you to do their work will be professionally handled
If you send one and your competition does not, you have created some level of doubt and suspicion about the other guys
It gives you a reason to ask the client for their email. Our experience is that if you wait until you have set the appointment to ask for their email in order to send a confirmation you will have a 90%+ success rate of getting their email information
It allows you to set expectations about the appointment process in terms of required time and desired flow
You can promote your company including providing a direct link to your website
- It provides information on your retail sales person including:
- Preferably include a photo to create a sense of familiarity
- Provide a short background that includes professional experience and a personal interest that can be used as a potential icebreaker with the client

Mark Sims is President of Chameleon Management Solutions, Inc. and is the creator of TRUST PRO® online, the only fully functional cloud based HVAC contracting business management software.

Tye's Tech Tips

SO YOU THINK....

As a professional service technician we all think we’re pretty smart, eh? Of course we do. We are a first class, one of a kind, top gun, able to fix anything with just a screwdriver and pliers. I’m exaggerating just a bit but I wonder if we realize just how smart we truly are. Do we all realize we have been given certain gifts and skills that enable us to make a lasting impression with our clients and within our community?

It is time we rethink the daily no-heat or no-cool service call from a basic repair into an opportunity for a lifelong customer relationship. This begins with being prepared and getting plenty of rest. What customer won’t feel they made the right decision when you arrive on time, bright eyed, with a warm smile and a firm handshake?

When stepping up to the 12-year-old furnace with the homeowner, take the time to ask the proper questions, listen for the answers and more importantly take notes. Is there anything you dislike about your current heating system? How long do you plan to live in the home? Are you interested in finding out how much you are overpaying the utility by not investing in a new high efficient heating system? You may be surprised by the answers you will receive.

There is no doubt we can repair the furnace, but by offering choices to our customers we have the opportunity to improve the quality of life for them for years to come, with improved comfort, lower energy costs and piece of mind with a relationship built on TRUST.

Tye Leishman has serviced, installed and sold HVAC systems for more than 20 years. He is the founder and President of Tempco Refrigeration & Air Conditioning Ltd., a full service HVACR/Electrical contractor located in Powell River, B.C. Canada. He is also a certified sales trainer with TRUST® Training and Consulting. Tye can be reached at tye@tempcohvac.com 1-604-485-5352.