How would you like to pay for that?

One marketing tool your roofing company should not be without is the ability to offer customers flexible payment options. Payment options can help your company be more attractive to homeowners who are ready to start a project.

If you're looking to sign more contracts, sign higher-priced contracts and/or want to tailor your company to be more profitable from planned roofing projects, consider offering your customers flexible payment options.

Benefits

Offering a choice of payment options such as same-as-cash or a low monthly payment loan allows homeowners to install the best possible roof system for their homes faster and easier. In addition to helping homeowners, financing options can benefit your business in several ways.

In the current competitive market, winning the next piece of business takes more than a great reputation and excellent customer service. A homeowner living with a leaky roof needs to replace the roof system sooner rather than later, so if you can offer a choice of payment options that are easy to apply for and obtainable for most homeowners with decent credit, you will have an advantage over competitors who might accept only cash or credit cards.

When you introduce flexible payment options, homeowners realize they not only have a way to pay for a new roof system, they now may have the funds to upgrade to a better roof system, opt for a longer warranty or add another home improvement product such as siding or higher-end exterior windows, which translates to more contracts or higher-priced contracts for your business.

Being able to easily finance a new roof system makes clients happy. Providing a positive overall experience and installing quality materials also will generate repeat customers who may refer friends and family to your company.

An example

According to Dave MacLean, senior vice president of NRCA member Brothers Services Co., a residential remodeling contracting company in Hampstead, Md., his company has been increasing its sales and the amount of business it finances every year.

"Six years ago, we were financing only 5 percent of our business," MacLean says. "Within the first year, we'd gone up to 20 percent, a night and day difference. During that first year, we realized a 26 percent annual growth rate. And during the past five years, we've seen a 17 percent compound growth rate, all of which has been fueled in large part by offering flexible payment options."

When a potential Brothers Services client knew it was time to replace his roof system, he didn't have the cash for the project and was concerned he wouldn't be able to afford it.

"Assuming he'd need to finance the project in some way, we went through our typical list of questions, such as whether it was a planned expense," MacLean explains. "After the expected 'no' response, our sales team asked the question we trained them to ask: What do you plan to do when the cost of the project exceeds your budget?"

MacLean's company then offered the customer a 12-month same-as-cash loan. The customer was thrilled because this allowed him to purchase shingles with a 50-year warranty and pay off the balance of the project when he received his annual bonus. If Brothers Services had not offered the same-as-cash option, it would have lost half the sale or possibly lost the sale altogether to the next roofing contractor who offered payment options for the project.

According to MacLean, Brothers Services' average roofing contract without financing between January and May was $12,909, but its average financed contract for the same time frame was $17,796—20 percent more than the nonfinanced contracts.

"We aren't just a roofing contractor but a full-service remodeler, and in the exterior world, we track contracts per customer," MacLean says. "If you call us to buy a roof and I sell you a roof, it's a one for one. But if I sell you a roof and gutters, that's two for one. Our average contracts per customer went from 1.2 contracts per customer to 1.4 contracts per customer."

Add financing to the sale

According to MacLean, the best time to suggest financing options to a customer is at the beginning of a potential sale.

"You should introduce a choice of financing options with all prospects when you set the sales appointment," he says. "Then, clients have time to think about what works best for them and can even plan more improvements they hadn't thought possible."

Your representative who sets up sales appointments should "plant the seed" and mention your payment options at the start of the sales process. For example, if you're running a financing special, have your representative mention it is available until the end of the month. And then your sales representative should go into the appointment assuming your customer will finance the project.

As MacLean mentioned, your sales representative should be prepared to ask potential customers whether they have budgeted for the project. If the answer is something such as "I haven't really thought about how I'll pay for it," your sales representative should respond with: "Don't worry, we have some great payment options we can talk about later."

This response gets your customers thinking about payment. When it's time to sign the job, your representative should let the customer know the full cost and how you expect payments. For example, the script may sound something along the lines of: "OK, the total for the project is $18,000. We take one-third now as a down payment, and the balance is due when the project is complete. Most customers prefer to finance with same-as-cash or low monthly payment options."

The most successful contractors mandate the offering of payment options by sales representatives with potential customers and integrate financing offers throughout your sales process—in sales scripts, presentations, marketing materials, project proposal tools, etc.

How to set up financing

To get started with financing, reach out to manufacturers and distributors you use or the franchise and member organizations to which you belong and inquire about payment option programs. If they don't have such a program, you can establish a direct relationship with a payment options provider.

The best payment options providers consistently deliver exceptional customer experiences in person and through automated systems. They should have relationship managers to help you get the most from offering financing, provide you with best practices, answer your specific questions and solve any problems.

You'll want to assess the provider's knowledge of the roofing industry. Will it be a partner beyond offering payment options? Is it stable in good and bad economies? After you have done your due diligence, the payment options provider will request information about your company through its enrollment kit to make sure your company is a match, as well.

Nothing to lose

Because the financing provider takes on all the risk for the loans, setting up payment options allows you to realize the benefits without worry—you have nothing to lose.

For example, my company, EnerBank USA, Salt Lake City, takes on the risk of the loan being repaid. If your customer is approved, the loan is funded and you, the contractor, are paid—typically at the completion of the project. If a customer defaults on repaying the loan, that's EnerBank USA's problem to figure out, not yours.

Although your clients aren't required to accept payment options, roofing contractors who don't offer financing to every customer generally don't see as much success as those who do. Some contracting companies use financing only to save a sale or don't work with a provider that implements industry best practices when offering payment options. In these circumstances, contractors don't reap the full benefit of using a payment options program. Take the time to find a provider that will help you implement best practices and deliver the service you need to help you increase sales.

Close the deal

Payment options should be part of your marketing tools to close more business and higher-value projects. Offering same-as-cash and low monthly payment loans provide a means for homeowners to fund projects. The more you can help your customers finance their roofing projects, the more contracts you will close—a win for everyone.

John Harris is executive vice president of sales and marketing for EnerBank USA, Salt Lake City.