BOILERS
www.heatingandventilating.net
Financing to cover hefty boiler expense
Joseph Valente, founder and managing director of ImpraGas, the boiler installation company, explains the importance of financing boiler installation purchases and the potential this offers in terms of growth and development for installation businesses
W
hen it comes to the installation of a new boiler, one of the most important factors to consider is cost. The domestic boiler can
be one of the single most expensive purchases homeowners make and payment can be challenging, to the extent that it might be a barrier to decision and purchase. Like many other large purchases in life, the option to spread the payment appeals to many. According to
finder.com, one-third of UK residents
have less than £1,500 in savings, whilst 15% are living paycheck to paycheck. More than half of 22 to 29 year olds have no savings, meaning that even if they’ve purchased their own homes, they have nothing set aside for repairs and maintenance, which second to the initial purchase of a property, can be the single biggest and most long-term investment required. Installation that requires payment in full and up
front, or even in advance, could potentially be cutting a business’s possible customer base in half. The risk taken is that if you aren’t offering any kind of payment options or financing, your customer could be turned off and inevitably engage the services of a competitor that offers financing; and potentially that’s a customer for life lost. After all, you usually don’t replace your boiler when it’s working, it’s undoubtedly a crisis purchase the majority of times, so there’s no time for saving up for it, it’s needed – and needed now. This is becoming an all-too-familiar scenario for heating and ventilation companies in the UK. New installation profits are in peril, due in large part to the depleted availability of homeowner cash. So what’s a business to do when there’s no money
for a rainy (or cold or sweltering) day? We could all spend hours, or days, debating about
the reasons why Brits are short on savings. Some would blame a struggling economy; others might cite a declining focus on cash reserves. Regardless of why, the most ambitious H&V companies will work to figure out how they gain access to all those homeowners who can’t afford a boiler today? Financing might be one answer. By allowing customers to buy now and pay later, busineses can open up a new, profitable world. Financing doesn’t only come to the rescue in dire situations, it also boosts conversion rates when homeowners are simply ‘shopping around.’ For
28 January 2020
Joseph Valente, founder and managing director of ImpraGas
customer (plus interest charges). You might be out of pocket in terms of that fee, but
you will have made a sale that otherwise would have never happened. That fee will save you the time of checking customers’ credit, managing payments, chasing down delinquencies and it will protect you from falling into legal trouble related to funding. It will also have gained you a new customer that will require regular servicing and possible repairs. Let’s not forget how powerful word of mouth marketing is, they could recommend you to a number of friends and family and open up a whole new selection of customers beyond them – and it goes on. Customer financing works best when consumers
know it’s an option, so advertise that you have financing available and inform potential customers of its availability. In many cases, consumers will want to know if you offer financing before they call you for an estimate. It’s an appealing proposition, it encourages trust and faith, many would assume that if a company can offer financing they must be financially secure. Once you decide that financing is the way to go, all
that’s left to do is research finance companies and find the one that best fits your business operations. Considerations include simplicity, customer service and fees – and you’ll need to decide which of these is your priority in order to make your decision, it might be different for everyone. Once you’ve decided what you want you can approach the finance company that satisfies your needs.
many of them, not having to shell out a large sum can be the factor that tips the scale in your favour.
The basics of financing
Financing homeowner purchases comes with a barrage of questions: How can we afford to wait for payment? How can we cover costs? What if borrowers don’t make payments on time? Then what? These are all valid concerns, but there are a number of measures you can take to ensure you won’t get burned. Firstly, a lot of business owners assume they’ll be the ones shouldering the weight of the financing. That’s rarely the case. Most often, the business contracts with a finance company, which will pay the installer (minus a fee) and collect payments from the
No one left out in the cold
Acquiring and retaining customers is all about delivering solutions in ways that meet their needs. Financing is just one way to achieve that. When you offer financing and meet customer
desires as well as requirements, you plant the seeds of trust and loyalty. When you offer financing, along with the other elements that encourage customer engagement and belief, you make your company and your offering attractive and worth consideration; in such a crowded market it’s important to stand out from the crowd in any way you can. There will be other installation companies that offer finance too, but at least you will be standing alongside them and you will potentially secure customers and repeat business that otherwise might have been lost.
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