Financing: A Powerful Ingredient

A water treatment business without a good consumer financing program is just treading water, according to Bill Norris, one of the owners of Home-N-Solutions, Inc. in Blanton, Pa. Home-N-Solutions has always offered financing, but in the first two to three years of business, its financing program was limited.

“We didn’t offer many options and very few special offers, and we had a lot of customers who were turned down,” Norris said.

About two years ago, Home-N-Solutions added some new financing offers, and the business grew significantly. “Now, we’re giving people what they need: some deferred interest and payment options, affordable monthly payments and fast credit decisions. We’re also getting a lot more customers approved because we have more financing options,” Norris explained.

Building Success

There is no single formula for building a successful water treatment business, but a common ingredient in most good business plans is a strong consumer financing program. Water treatment systems tend to be larger-ticket items, on average anywhere from $3,000 to $5,000. Because of the cost, successful dealers don’t just sell systems; they sell affordable payments.

“The first step in our sales presentation is to establish credibility,” said Allen Townsend, sales manager for Culligan San Antonio. “Second, we establish the customer’s need. Then, we justify the cost based on how it will help save money in the long run; then, we sell the affordable monthly payment.”

An easy monthly payment is a proven strategy that works for many retail businesses, from auto dealers to electronics stores, to real estate agents. Most consumers don’t have enough available cash to drop $3,000-plus, but they often have a few extra dollars in the monthly budget. If a dealer can convince them his product is beneficial, it will enhance their lives, and they can pay for it in small, monthly increments, then the dealer will likely make the sale.

Empowering Customers

Customers typically don’t make snap decisions about credit; the decision evolves over a period of time, often during the course of the sales presentation. Despite what some may think of American consumers, most of them don’t enjoy debt. The very concept of being in debt creates a sense of powerlessness. Consumers need to feel empowered. The sales presentation is an opportunity to provide customers with empowering choices—the choice to improve their water quality, the choice to improve their quality of life, and the choice to finance a treatment system in a way that is comfortable for their budgets.

Special financing offers shift power to the consumers. Six months with no payments and deferred interest give them the feeling that they are getting a valuable deal, and they are. There also is a valuable sense of affirmation when they are approved for credit. Many customers are approved quickly, often with a phone call.

“Some lenders provide instant credit decisions. It’s done on the phone during the presentation,” Townsend said. “It’s a very effective sales closing tool.”

Overcoming Credit Blemishes

For situations in which the customer’s credit is spotty, it helps to have lenders who are willing to take on “B” and “C” credit applications. These are often good customers who simply have credit blemishes for one reason or another. Retailers need lenders who can be flexible.

Effective in-home sales are the foundation for many water treatment businesses. That means the success of the business rests on the shoulders of the sales force. Their ability to communicate features and benefits will determine the success of the store.

“We do two weeks of sales training with all our new sales representatives,” Townsend said. “After that, new sales reps also do two training sessions a week over three months. We spend a significant amount of time discussing financing. Financing is typically brought up at the end of the presentation and used to close the deal, but we give our sales team the flexibility to do what works in each situation.”

The water treatment business is all about meeting consumer needs, and one of those needs is financing. People who want to buy but can’t pay cash or don’t have other financing sources need your help to get the products and services you provide. Think of financing as a powerful ingredient that turns prospects into customers. Financing is an essential part of any water treatment business.

Gary W. Slagle is vice president and general manager, Home Utility, GE Money – Sales Finance. He can be reached at 866.838.0654, or by e-mail at gary.slagle@ge.com.

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