The Early Days… EGIA was officially formed by the merger of the Northern California Electrical Bureau and the Gas Appliance Society of California. EGIA ’ s roots date back to the early 1930’s Our original job was to get homeowners and businesses to use energy!
Todays Presentation Will Cover 1. Why is Financing so important to growing my business? 2. The Application Process 3. Options & Rate Sheet Overview 4. How To Enroll In The Program
Why is Financing so important to growing my business? 4 | www.egia.org
The Financing Cycle A Proven Strategy to Grow Sales & Profitability Offer payment Include payment Payment options win options when options or same as more bids & grow your presenting the job cash loans in print & average job size and give estimate to every online materials to you the margin needed to customer, every day drive leads grow your business Many succes cessful sful contract actor ors s use payment nt options ons to increas rease e sales es
Financing Statistics Even the folks with cash out there don’t want to part with it all up front!
Consumer challenges = Demand for Financing Limited Cash Resources Over 60% of U.S. HHS live paycheck to paycheck Big Ticket Hesitations Over 50% of U.S. consumers find it difficult to spend $2k on a major purchase, pay for repairs wall street journal 06.15.11
American Family Financial Statistics Data 1. Average American family savings account balance $3,800 2. Percent of working Americans who are not saving for retirement 40 % 3. Percent of American families who have no savings at all 25 %
Impact of Offering Financing On Contractor Businesses With Financing Cash Options Leads 10 12 Sold 3 5 $21,570 $16,700 Avg Ticket (30%larger with financing) Revenue MTD $50,100 $107,850 $601,200 $1,294,200 Revenue YTD *Based on an average of EGIA member contractor experiences and industry information. Actual results may vary.
Impact of Offering Financing Grows Quickly With Added Salespeople! Assumes 10 active salespeople at a similar level of performance With Financing Cash Options Leads 100 120 Sold 30 50 $21,570 $16,700 Avg Ticket (30%larger with financing) Revenue MTD $501,000 $1,078,500 $6,012,000 $12,942,000 Revenue YTD *Based on an average of EGIA member contractor experiences and industry information. Actual results may vary.
Top Salesman Statistics Across EGIA Platform 1. Sell between 70-75% of their jobs with financing. 2. Have a 25-30% higher closing ratio. 3. Have 15-20% larger projects. 4. Sell higher efficiency products.
Different Types of Customers in the Marketplace Cash Buyers - Those that have the cash and are hesitant to write that big check. (offer Same as Cash) Payment Buyers - That need the lowest monthly payment to pull the trigger. (offer Longer Term payment plans) Challenged Credit - In this tough economy you cannot forget the 40% of the applications that can ’ t be approved by “ A ” paper lenders. Most importantly, financing helps the homeowner overcome cash separation anxiety!
Best Practices For Offering Financing 13 | www.egia.org
1. Be Methodical. Every Customer Every Time! me·thod·i·cal məˈThädikəl / adjective Let The Customer Know it is Available! adjective: methodical 1 . done according to a systematic or established form • When You Set The Appointment of procedure. "a methodical approach to the • Before You Do The System Check evaluation of computer systems" synonyms: orderly, (well-)ordered, (well- • Before They See The Bid Cost )organized, (well-)planned, efficient, businesslike, • Never prejudge your customer systematic, structured, logical, analytic, disciplined; More • Every customer, every time
2. Offer A Low Payment Or No Payments at All For Up to 12 Months
Promotions drive purchasing behavior Having a varied promotional mix helps you increase the average sale. $6,804 *GE Capital Retail Bank 2011 statistics for home improvement industry
3. Get Over Contractor Fees! Contractor “A” Cash Or Credit Contractor “B” Card rd • $16,200 quoted price (includes the cost of financing) $15,000 quoted price • @ 6.99% APR, 120 months $450 monthly payment • $188 monthly payment (assumes 3% min payment on credit card) Or 12 Months Same As Cash Financing Fees Are In Everything You Buy From Cars Or a cash discount today of $15,000 to Furniture to Big Screen TV’s.
Anybody buy a car, furniture, spa, or a big screen TV lately? 18 | www.egia.org
4. Ask Preliminary Questions
5. Before They See The Bid Price They Should See A Payment Option A great way to show net monthly payment after energy savings.
6. Have A Clear Plan For Your Sales Staff About Financing No Interest / No Payment Options Plan Code# Payment Factor Term 6 Months #AXW234 0% 120 mos. (after promo period) 12 Months #AXW546 0% 120 mos. (after promo period) 4.99% #4995YRW67 1.89% 60 mos. 6.99% #6997YRW29 1.51% 84 mos. 6.99% #69912YRW59 1.02% 144 mos.
7. Become An Expert To Close More Deals There Is No Silver Bullet In Financing Use Multiple Options: Same as Cash / No Payment Long Term, Fixed Payment Reduced APR Equal Payment / No Interest Credit Challenged That ’ s Why The WaterFurnace Program Has Multiple Options For You!
8. Advertise Financing To Attract Customers and Manage The Overall Perception Of Affordability Find Local Competition Using It And Get Off The Ball And Offer Financing! Financing Is Used by Your Competition!
9. Up Sell Using Payment Option 1 Option 2 Option 3 Good Better Best Total: $7,000 Total: $10,500 Total: $20,000 Basic change out Base Energy Star Model Geothermal Installation Monthly: $210 Monthly: $208 Monthly: $204 Avg. 3% credit card Example after energy bill savings: $168 Example after energy bill savings: $104 payment @ 6.99% For 60 Months @ 6.99% for 144 Months Added Bonus 30% tax credit: $6,000 Hypothetical Example
# 10 Use Financing To Close…Say something like this… We can install your chosen system it this week for as little as $204.00 / month. And we have 2 great ways you can pay for it … 1. Is a fixed rate installment loan at 6.99% for 144 months with no pre- payment penalties. 2. Or if you just want some time to pull your money together, we can install it now and you can have 12 months with no payments and no interest and we can get you approved in just a few minutes and you won’t have to share your financial information with me, just the lender. Which choice do you like?
Reading The Rate Sheet 26 | www.egia.org
EnerBank Rate Sheet • Unsecured Installment loans to $45,000 • Down To 640 FICO Score • Terms From 5-12 years • Fixed APR options starting at 0%-12.90% • No interest No payment loans for 6 / 12 / 18 months • No interest equal payments options for 12-84 months • No pre-payment penalties • Paperless application process
Using The Payment Multiplier Your Job Cost: $18,500 including labor, materials, etc. Plan 69912YRW46 First add in the dealer fee so you do not hurt margin 1. $18,500 x 9.15% = $1692 + $18,500 = $20,192 (Price you quote to customer) Second calculate the monthly payment using the payment factor off the rate sheet 1. $20,192 x 1.02% Payment Factor = $205.95 monthly payment
Application Process- The Simplest In The Marketplace 29 | www.egia.org
Totally Paperless… APPROVAL 1. Hello I’m contractor # 123 2. My customer is applying for plan #AXW542 3. The contract amount is $20,000.00 4. Hand the phone to the customer 5. Once approved the customer and the dealer are notified 6. Email or fax your signed contract/work order to the bank. Bank will email or mail Payment Authorization Form to homeowner. 7. You are done with the approval, NO paperwork! FUNDING 50/50 Staged Funding is For funding simply have the homeowner follow the link available. 50% up front, and online to the Payment Authorization Form. 50% at job completion. Once signed you will receive payment in 24-72 hours. 30 | www.egia.org
Developing Your Companies Financing Offering 31 | www.egia.org
Plan For Success • Get Trained On The Process • Pick The Plans That Best Suit You & Your Team • Build in Any Contractor Fees • Role Play With Your Team Until They Are Comfortable • Close More Sales at a Greater Margin!
How Do I Get Enrolled? 33 | www.egia.org
Enrollment Is Easy Just Visit: WWW.EGIA.ORG/WATERFURNACE
Marketing Financing Options For Consumer Facing Tools:
Contact Information For General Information or to enroll in the financing program please call : 866-797-7343 Let my team know you are a WaterFurnace dealer www.egia.org/waterfurnace For Detailed Questions or Enrollment: JEREMY CHANDLER Director, Contractor Services (916) 480-7339 jchandler@egia.org
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