October 12/19; Volume 30/Number 9
By Nadia Ramlakhan
The consensus among retailers who successfully integrate financing into their businesses is that it is a win-win for everyone involved. With credit, the consumer has more options to choose from because price is no longer an issue. And from a dealer’s perspective, there are a number of benefits that coincide with offering financing programs, including an increase in the average ticket, more foot traffic in the store and, ultimately, bigger profits. For those retailers who are still unsure of how to gain from financing, FCNews rounded up some advice from top dealers and executives across the country.
Switch things up
Modern consumers have come to expect financing offers on large purchases whether it is furniture, electronics, a car or flooring. With that, dealers should always have at least one offer available—but remember to vary the terms and conditions during key sales events, product launches and busy buying seasons to create a sense of urgency. According to most flooring retailers, customers are more likely to buy when they know the offer is only available for a limited time.
For Kevin Rose, president and owner of Carpetland USA with two Illinois locations, changing the store’s financing offer every other week works best; after all, a special isn’t so special if it is available all the time. “It’s just a matter of switching it up and having something available,” he said.
Early, often in the process
It seems the golden rule of financing is to talk about it early and often during the sales process. Mentioning it throughout the conversation helps ease the consumer into the idea of low monthly payments, which opens the door to more expensive items. Some dealers make the mistake of positioning financing as an afterthought, or an option that only becomes available if the customer is interested in an item above her budget. “The key to financing is making it a part of the sales process,” said Keith Spano, president of Flooring America. “It can’t be something that’s brought up at the last minute; [it should be presented] early and often throughout the sales process.”
Kurt Duitsman, owner and president of Floors For Living with 16 locations throughout Texas, introduces his special financing options during the initial greeting with a customer. “To be successful at financing you should mention it at the beginning and end of the sale. In every greeting you must say, ‘In addition to our low sale prices you also get up to four years of free financing,’ [for example]. At the end of the sale you must ask, ‘Did you want to use free financing or would you rather pay cash?’”
The Internet has made it possible for customers to browse product selections online before stepping into a brick-and-mortar location. This means that once she is in store, she has already done her research and is ready to purchase. Displaying signage and other traditional POP materials in the showroom helps keep financing top of mind for consumers.
For dealers who want to take the subtle route, Scott Perron, CEO of 24-7 Floors in Sarasota, Fla., recommends having sales associates wear lanyards around their necks that read, “Ask me about our 12-month financing” or similar promotions. “It’s much better when it’s the customer’s idea. If you have it hanging around your neck it won’t seem like you’re trying to hammer her and it gives her an opportunity to ask you about it before your hard sell.”
Find the right partner
Different buying groups, banks and manufacturers work diligently to develop plans that appeal to both retailers and consumers in the flooring industry. Because each market has specific needs and preferences, a dealer should find out which partner and plan will work best for him. For example, some companies offer aggressive buy downs and low rates while others provide tools to help with in-store promotion and lead generation.
When it comes to finding the right program, research shows that longer terms and lower monthly payments are more appealing to consumers; however, dealers need to be wary of incurring costs. “Partner up with a bank that can offer [what you need],” said Barry White, owner of Carpeteria in Lancaster, Calif. “Most people that do financing are not as concerned about the total price as they are the payment.”