The benefits are larger average tickets, repeat business, and improved cash flow.

As hvacr dealers know, most heating and air conditioning customers call the dealer out of necessity, and they may be unprepared for the cost of repair and replacement. All the more reason why it’s critically important to have a financing program that enables your customers to make payments over time.

Your ability to use financing to close sales can be a key differentiator from your competitors because offering payment options makes it less likely your customers will take their business elsewhere.

“Consumer financing is crucial in our business,” said Mike Cheatham, finance manager for Service Experts, one of the nation’s leading hvacr dealer franchises, with about 100 locations and 4,000 employees in North America. “About 30% of our replacement sales are financed. Without a financing option, we would likely lose a lot of those sales.”

Beyond closing the sale, honing credit- selling skills can bring other benefits, according to Cheatham. “We’d prefer to have all of our customers finance their deals,” said Cheatham. He cited three principle benefits of selling through financing:

• Larger average ticket: Those who purchase their system with a Service Experts card, which is backed by GE Money, tend to spend more than customers who pay cash or use their own bank card.

• Repeat business: Cheatham said that customers with the Service Experts card are more likely to call them again. He also noted that cardholders become part of his “best customers” list and receive periodic special offers for maintenance and other services.

• Cash flow: Generally, financing partners repay credit purchases fast — usually within 24 to 48 hours. They also handle credit issues and late payments, relieving the dealer of those responsibilities.

With so much riding on the success of the consumer credit program, it is vitally important for Service Experts to do financing well. That’s why Cheatham handles sales training personally, visiting each of his company’s offices during a 16-to-18-month cycle.

“I go through all of the programs we offer during a two-hour training session,” he explained. “We talk about how to present financing options, how to complete the paperwork correctly, everything that might come up about consumer credit in the course of a sales call.” Cheatham identified the important points he covers in his training session, and said that getting these things right will help to increase close ratios.

1. Offer credit to all customers: Cheatham said that in the past, many of his sales associates were guilty of “prejudging customers.” If the customer seemed to be of modest income, the sales associate assumed he or she would not qualify for financing. Conversely, if the potential customer appeared wealthy, the sales associate assumed they did not need a Service Experts card.

“We advise our technicians to offer the Service Experts card to everyone,” said Cheatham. “You never know who will qualify for consumer credit until you submit the application, and the response is extremely fast, so you’ll have an answer in a couple of minutes. We want everyone on our card program, so it’s important to offer it to every customer.”

2. Listen and learn: “There are basically two kinds of customers — those who are rate buyers and those who are promotion buyers,” Cheatham explained. “Rate buyers are looking for the lowest possible interest rate on their financing and a set number of months to pay it off. Promotion buyers want the six- or 12- month no-interest offer. It’s very important to listen to your customer and find out which financing program works best for them.”

Cheatham said about one in six customers are rate buyers; the rest want the deferred-interest special offer. “In either case, they appreciate our financing program because it allows them to pay for their system without putting more debt on their bank cards.”

3. Complete paperwork properly: Cheatham noted that being careful when completing the credit application form saves time and inconvenience later.

“The credit application paperwork is very simple, but if you’re not paying attention and make a mistake, it will delay the response time or yield an inaccurate response,” he said. “The last thing you want is to make a customer wait. Typically, we get a response to a credit request in a matter of two or three minutes.” Cheatham said that some customers prefer to apply for credit themselves online. “About 10% of our customers are doing this now, and that number increases a little every year.”

4. Promote your program: It’s important to create awareness for your consumer-financing program even before you reach the point of sale. Cheatham said Service Experts mentions their credit program in almost all advertising, including print, broadcast, and direct mail.

“When the customer sees our ad, we want them to know that we can help with a variety of payment options. We don’t want doubt about financing to prevent them from calling us. Paying for a system is a big deal to most people, and we can help them with that issue.”

5. Articulate benefits for buyers: Selling with promotional financing makes closing the sale easier for the hvacr dealer, but there are benefits for the customer, too, and it’s important to communicate those benefits early in the sales presentation.

Cheatham noted that buyers can manage payments as they want, paying for it over time with regular installments or delaying payment during a no-payment, no-interest period. They also receive notification of special offers from the dealer that may help them save money on future purchases or prolong the life of their current system.

“When customers participate in our credit program, it raises the level of support we can provide,” Cheatham said. “Our financing partner handles the billing, but we can insert messages and offers when we need to. It’s great to have such a solid partner; they are easy to work with and do an incredible job at customer service.”

It’s hard to overestimate the importance of financing to hvacr dealers. That’s why it’s important to get the most out of your credit program. With thorough sales training and a sound financing partner, you’ll close more sales, generate bigger profits, and provide a great customer experience.

Bruce Christensen is vice president and general manager of GE Money’s Home Improvement division. He and his team provide consumer-financing programs to thousands of hvacr dealers nationwide.