How to Sell a Monthly Payment Versus a Cash Price

Home improvement costs can create sticker shock for homeowners, especially when those expenses come up as an emergency or the project turns out to be larger than expected. As a home improvement contractor, you’re already responsible for getting so many different pieces of the puzzle in place to get a project estimated, sold, scheduled, funded and completed. 

Helping your customers finance their next project should be fast and easy. By spending a little time upfront with your customer to better understand how they can afford the project, you’ll increase the probability for closing more — and larger — deals.

Affordable might mean manageable monthly payments

If you are only presenting cash prices to your prospective customers during your sales process, you could be losing out on deals. Nearly every contractor hopes for full cash payment from homeowners for home improvement projects. However, for hefty repairs or larger jobs, many homeowners need alternative means to fund the project. 

The sticker shock of the cash prices could be so startling for your customers that they reach out to another contractor for a lower estimate — one of your competitors who offers financing options with manageable monthly payments. Even if the overall cost of the project doesn’t change regardless of payment method, the affordability from the client’s perspective does.

“Reduce to the ridiculous” is a well-known sales closing strategy that takes a large sum and breaks it down to a nearly absurd amount. Imagine if you have a $10,000 project, how that total cost might land compared to presenting a potential monthly payment that’s less than $200 or even to the ridiculous $6 per day. When people can manage the cost, it seems more affordable — and makes it easier for them to say ‘yes.’

The hardest part in selling a home improvement project isn’t convincing a customer they need it — it’s helping them figure out how to pay for it.

Monthly payments are the new norm

Consumers today are accustomed to monthly payments for so many different things — cars, cable TV and gym memberships. They make monthly payments for cell phone service and even to finance the cell phone itself. People do this because of the cost versus benefit ratio — it’s a fairly low cost that benefits their lives each month.

They are willing to buy a higher priced item if they can have monthly payments that meet their budget. As a contractor, the products and services you offer are valuable. Often, all it takes to potentially increase your sales price and closing ratio is to match your customer’s mindset. And, today, monthly payments make a lot of sense to consumers. You can make that an option and a seamless experience for them.

Simple options, more closed deals

Flexible payment options will help you close more deals with a wider range of homeowners. And if the process is simple, it’s a positive experience for your customers.   

This doesn’t mean that you have to forego presenting a cash price. But it does mean that you need to pay special attention to your customers’ key motivators and considerations. One simple and effective way to empower your customers to afford more in their home repairs and improvements is by offering options. 

Here’s an example of two options to present that are a win-win for you and your customers:

  • Low monthly payment options with flexible terms for home improvement financing
  • Reduced overall price for full cash payment

By offering options, it will help you understand your customer’s key motivation, and also help you to better handle their objections — and ultimately close the deal.

Your partner in more sales

Are you ready to help your customers better understand their buying power (and close more deals)? Mosaic offers a broad range of loan products for both in-person and remote selling. 

Let us help you make your sales process seamless and maximize every transaction—right at the point-of-sale.

Home Improvement Loans through the Mosaic platform are made by WebBank, Member FDIC, Equal Housing Lender. 

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