Dominick Guarino, CEO, National Comfort Institute, Inc.

Dominick Guarino

A recent Forrester study found that offering financing can result in a 17% increase in incremental sales and a 15% increase in average order value.

With long-term financing you can help customers afford high efficiency equipment with the right improvements to their systems.

By contrast, the six or 12 month “same as cash” deals usually aren’t the best option for most customers, unless they have lots of cash in the bank and can pay it off in six or 12 months.

Let’s examine some benefits of properly financing an HVAC system replacement with performance improvements.

Customer Benefits

  • Lower Total Cost of Ownership. When structured properly, payments can be partly or completely covered by the energy savings. A well-functioning, performance-tested system will help insure those savings.
  • Predictability. Even monthly payments allow customers to budget their expenses, while knowing exactly when their loan will be paid off.
  • A rate they can live with. With a good financing partner you can “buy down” the rate for a monthly payment customers can handle.
  • Affordability. It can help customers afford to make their HVAC system work right – often for the first time, allowing them to better enjoy a comfortable, safe, healthy and energy efficient home.
  • Resale Value. When they sell their home, customers can pay off the loan and enjoy the increased resale value created by a top-notch comfort system.

By promoting monthly payment amounts up front, you’ve suddenly made your customer’s purchase attainable.

Contractor Benefits

  • Close more sales! Contractors who offer the right financing options close sales more often. More than ever, customers expect financing options on large purchases. When you don’t offer them, you are excluding a big part of your market.
  • Increase your ticket price. By promoting monthly payment amounts up front, you’ve suddenly made your customer’s purchase attainable. This creates the opportunity to add additional, even more profitable products and services to the purchase. What may not have seemed affordable before – is affordable now! According to EGIA, (Electric and Gas Industries Association) financed systems, on average, fetch a $2,000 higher price.
  • Generate Repeat Business & Referrals. By offering payment options that meet your customer’s needs, you’re creating loyalty and building trust. They will tell their family, friends and neighbors how much you helped them.

The key to a successful financing program is educating your team. There are many options and terms you’ll need to be fluent in, including buy-downs and second-look financing.

Seek out a solid financing company that provides the initial education and the long-term support you will need to succeed. Ask them for referrals from contractors in other markets.

Look for a company that specializes in HVAC. Make sure they answer their phones and don’t put you in voicemail purgatory – especially when you’re at the kitchen table.

A good financing program can help make all the difference in your performance-based company. It can help you do the right thing for your customers while making the profits you need and deserve to make sure you are around for many years to come to take care of their needs.