Everyone could use more time and money—contractors especially.
By streamlining your sales process, moving your customers from quote to contract to invoice to payment more quickly and efficiently, you can increase your bottom line while simultaneously freeing up more time to build your business.
A great way to get started streamlining your sales process is to integrate customer financing directly into your earliest contact with your clients, including quotes, contracts, and invoices.
By providing flexible financing options at every step of your customer interactions, you will not only close deals more quickly but also have a good chance of avoiding the potentially nasty effects of “sticker shock.”
Today, we are here to break down every step in the process and point you toward some resources to get started.
Step 1: Embed Financing to Boost Conversions
First, let’s look at why introducing financing at every step can help boost conversions.
No matter how much a customer may be looking forward to a renovation or a new home build, they may still naturally balk when they see the number of zeros at the bottom of a quote or invoice.
Large upfront payments have this effect so often that there’s actually a nickname for the effect—“sticker shock”:
The presence of pricing information during consumption accelerates “satiation,” according to new research by Kelly Haws, associate professor of marketing at Vanderbilt’s Owen Graduate School of Management. In other words, enjoyment of a product or experience declines faster when consumers are aware of the price.
Fortunately, however, making customers immediately aware that you offer reasonable financing options can both decrease sticker shock and increase the likelihood that they will follow through to the next step.
Recent studies have discovered that while a large percentage of people use savings for their construction projects (63%), the vast majority of homeowners who take on renovation or home-improvement projects still research financing options first.
While 22% received financing through home equity financing or personal loans, 6% received financing directly through their construction company.
But here’s the key point.
A whopping 79% of all who took out a loan to finish their construction projects reported they would recommend to friends that they do likewise.
But not everyone is aware that receiving financing through their chosen construction company is even an option.
By offering financing to your customers up front, you can ease them into their next steps, making their path forward clear and relieving them of having to figure out where and how they are going to finance their project.
This not only increases the likelihood that they will say yes but also decreases the amount of time that elapses before they are ready to move to contract, since they don’t have to take time to research and apply elsewhere for a loan.
Step 2: Adopt Best Practices for Adding Financing to Quotes
When integrating financing options directly into your quotes, always be sure to follow best practices.
This not only allows for complete transparency but also points out how financing will benefit the customer.
Quotes including financing options should always be:
- Clear and straightforward
- Easy to scan and understand
- Contain multiple financing options
As indicated above, just stating the bottom line can reveal a big, scary number.
But prominently displaying various monthly payment options in your quotes can help customers overcome this initial hurdle. Even a $20,000 price tag looks less scary when broken down into monthly payments over the course of five or ten years.
Always make sure that your quotes show different financing tiers (e.g., lower payments, higher project scopes) so that customers are clearly aware of all their options and can weigh them against their current financial realities.
When integrating financing options into a quote, be sure to include:
- A complete overview of the project. What exactly will be included in the scope of the project, and what is the estimated timeline?
- Estimates for specific goods and services. How much will everything cost? Where did that bottom line come from?
- Price of the project without financing. What would the customer have to pay today without financing?
- Financing terms. What’s the total loan amount, interest rate, monthly payments, and any down payment required?
At this stage, if you’re not already working with Hearth software, it may be helpful to look at some examples and templates to consider how you might lay everything out.
Step 3: Embed Financing Links in Contracts
With the rise of e-commerce and digital sales, built-in lending options have become extremely common. Someone shopping online can find microloans and finance options hyperlinked on sales pages and check-outs.
In a similar way, you can embed financing links directly into your digital contracts.
How you add a hyperlink to a contract will depend on what system or software you’re using to do so. Many professional systems, like the ones we offer here at Hearth, provide tools to streamline this process.
However, if you’re working from scratch, you can add a hyperlink to an existing PDF by following these steps:
- Open the PDF version of the contract in Adobe Acrobat.
- Go to Tools and choose “Edit PDF” then “Link” then “Add/Edit Web or Document Link.”
- Drag the rectangle to where the link should go.
- In the “Create Link” dialogue box, adjust the link appearance and the choose the link action.
- Save the PDF. The hyperlink will then appear in the saved document.
To ensure you have covered all your legal bases, always follow the SEC standard for construction loan agreements, and if you are in any doubt about how to do so, reach out to a lawyer to look over your contracts before proceeding.
Step 4: Include Financing in Invoices to Make Payments Simple
It’s possible that clients who initially decided to proceed without financing may find themselves having second thoughts when the initial invoice arrives.
Either because their financial situation took an unforeseen turn or because they experience a cold dose of reality when that first payment looms, they may decide that smaller monthly payments suddenly look more attractive.
In order to help clients move forward and prevent the potential for delayed payments, add financing options directly to your invoices.
Putting this system in place encourages clients to choose payment plans at the invoicing stage without having to discuss the matter with clients, redo and resend invoices, or otherwise add to your daily workload.
Best of all, with Hearth’s digital invoicing tools, the process of helping clients pivot to financing has never been simpler. Our software can completely automate the process, offering financing offers automatically on your behalf.
Simply set it, forget it, and let the software do the heavy lifting to keep the customer on board and the project rolling forward as expected.
Step 5: Learn How to Automate the Process with Hearth Tools
It’s not just invoicing options that can be automated.
Hearth’s powerful and intuitive platform can automate the inclusion of financing in quotes and contracts as well.
There are multiple benefits of automating these systems.
Increased Efficiency
Automated processes not only speed up your company’s internal operations but also reduce your daily human workload, freeing your staff to concentrate on tasks that require the human touch and add value.
More Consistency
Automations don’t get sick, don’t have bad days, don’t forget what day it is, and don’t run late for work.
With automated processes in place, your customers will experience greater consistency and deal with fewer natural human errors gumming up the works.
Greater Scalability
Automated tools allow you to grow and scale more rapidly without getting bogged down in paperwork and becoming overwhelmed.
Step 6: Market Your Financing Options to Clients
Adding financing banners to your marketing materials, business cards, and website can be a good call.
Right from the beginning, at first contact, you are setting the tone with potential clients, allowing them to envision a future in which, with the help of financing, they’ll be able to work with you to make their dreams come true.
You can also actively inform customers up front about the potential for financing, even in the earliest consultations and estimates.
Often, this is as simple as slipping a few key phrases naturally into your early conversations:
- “If you decide to finance with us…”
- “Of course, with financing, we could always…”
- “I don’t know how you plan to finance, but…”
Streamline Your Sales Process with Hearth Financing
Embedding financing options in all your interactions—from ads to initial consultations to quotes to contracts to invoices—can go a long way toward streamlining your sales process.
Automating whatever steps you can will even further maximize these opportunities.
Over the long run, this will save you time and money, freeing you to build and grow your business without experiencing slowdowns on the customer side or feeling overwhelmed by paperwork on your end.
In order to close more jobs and improve your cash flow, start integrating financing options into your sales process today.
And as soon as you’re ready to take your next steps, feel free to reach out.
Hearth can help.
