I hope this finds you well!
Other than having to work around some spring thunderstorms, most of our dealers have maintained great momentum through March. Many dealers are also reporting strong consumer interest at their spring shows and events. I hope you are finding the same!
In this issue of the Residential Metal Roofing Executive Report, I want to discuss home improvement financing and how to best leverage it in your marketing and sales process. It was not long ago that the bottom fell out of financing and banks had no interest in extending credit for home improvement projects. However, banks have slowly been coming around and over the last 12 – 18 months we have seen a significant uptick in the number of banks specializing in home improvements looking to write business.
We have found that most companies in our industry are “all or nothing” when it comes to offering financing — either the majority of their projects are financed or none at all. We believe in a happy median between these two extremes. If the majority of your projects are financed and you struggle with a high rejection rate, you might need to adjust your marketing to better target your ideal costumer. If you choose not to offer financing, you are likely leaving sales on the table by not giving your clients payment flexibility. We find the most successful metal roofing companies are usually anywhere between 60/40 cash-finance to 40/60 cash-finance.
Offering financing no longer carries the stigma of “selling paper” – low monthly payments for extremely long terms and high interest rates. Few consumers are sitting on enough cash to afford premium solutions so, whether a same-as-cash offer or traditional term loan, offering this flexibility is critical to our success. There are many reasonable options that, when presented properly, can significantly increase your sales and help more consumers afford a lifetime, beautiful metal roof.
Due to metal roofing’s surge in popularity, many homeowners are already aware that metal is a premium solution, often costing 3 – 4x as much as traditional roofing solutions. Referencing financing options in your marketing can open you up to a segment of consumers that would have otherwise dismissed metal as unattainable due to its cost. This will boost the effectiveness of your marketing dollars.
There are some legal considerations when advertising financing and we highly recommend running any ads or offers by your attorney prior to publication. We have been advised to avoid mentioning the amount of any payment, percentage of a down payment, period of repayment, and finance charges. Below are some examples of acceptable and unacceptable phrases that can be used. Again, it is best to run any material by your attorney as there may be unique laws and/or precedent in your state.
- Loans up to $40,000
- Affordable monthly payments
- Same-as-cash options available
- Terms to fit your budget
- Monthly payments starting at $175 (amount of payment)
- 12 months, same-as-cash (period of repayment)
- 60 or 72 month loans available (period of repayment)
- 0% down payment (amount of down payment)
We have worked with some companies who establish finance options and go through the trouble of incorporating financing into their marketing, but their salespeople fail to properly present financing in the home. Rather than presenting financing as an option just as legitimate as cash, it is the Hail Mary pass at the end in hopes of closing.
By including a finance option all through your price proposal, you eliminate any embarrassment for the homeowner over not being able to pay cash and you soften the sticker shock by reducing the cost to low monthly payments. Without knowing our solution might be $35,000 or more, many homeowners will tell you during the appointment that they only ever pay cash. If you politely ignore their comments and present financing options as legitimate, you can smoothly transition when the price is more than anticipated. You cannot use financing only as a means to recover from sticker shock and our last resort.
Here is an example script you can use when presenting your price. This script should be used prior to any specials or discounts.
“Mr. and Mrs. Smith, thank you again for all the time you have spent with me this evening. After reviewing your criteria and evaluating all the roofing solutions available, you have decided that KasselWood steel shingle in New Cedar best fits your wants and needs. I have put an exact proposal together from the measurements we took earlier and it comes to $35,000. We have two payment options available, you can pay a third tonight, a third when we start, and the final third when the project is finished and you are completely satisfied, or we can do [AMOUNT OF DOWN PAYMENT] tonight with about [PAYMENT AMOUNT] per month. Which of these options will work best for you?”
By using this script or something similar, you have immediately introduced the financing option and reduced the total cost to a monthly payment. You will likely still receive some price resistance, but a monthly payment is much easier to fit into a budget and provides a smaller number to negotiate over.
I hope these observations are of help and reveal how financing can support the growth of your business. It is no longer a method reserved for “tin men” and it does not have to cannibalize your cash business. As you work to sell premier solutions at a premium price, financing can be a valuable tool to increase the effectiveness of your marketing and increase your closing rates, allowing you to provide more homeowners with the infinite benefits of metal roofing.
If you would like to continue to the conversation or hear about some of the financing options we find our dealers using, please do not hesitate to reach out at email@example.com or 800-543-8938 x241.
Thank you once again for participating in the conversation. As always, please do not hesitate to let me know how we might be of service.
Todd Miller has spent his entire career in the metal building products manufacturing industry. He is president of Isaiah Industries, an organization recognized as one of the world’s leading metal roofing manufacturers. Todd is currently Vice President of the MRA (Metal Roofing Association) and a Past Chair of MCA (Metal Construction Association). Through his website, he strives to raise the bar on standards and practices to provide property owners with the best possible products for successful roofing projects.
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