PDF WHY OFFER FINANCING? - GreatAmerica Financial Services

WHY OFFER FINANCING?

AG Professional magazine once published an article on the impact of offering a finance option on sales for an international equipment manufacturer. The company's marketing manager said there was a 15% increase in the number of new customers who financed their new equipment versus new customers who paid cash, and a 22% increase in the number of units sold to finance customers versus those who paid cash. Customers who financed new equipment purchases were more likely to purchase the company's upgraded, higher end products. Additional industry studies show that customers perceive companies who offer financing alternatives as financially stronger, and more committed to customer satisfaction than those companies who did not offer a finance alternative.

Advantages to Offering Finance Options

? Avoids "sticker shock" by addressing your customer's price concerns up front. Once your customer knows they can afford the new equipment (because they can afford the monthly payment amount you quoted) they can focus on the benefits and value of owning your equipment.

? Many times your customer will call or meet with you to obtain additional information concerning the finance options you proposed. During this additional "face-time" ? when they are talking to you and not to your competition ? you have additional opportunities to demonstrate your capabilities and customer service commitment.

? Customers are more likely to purchase upgraded, higher-end products when presented with finance options on different equipment models. They often realize that for just a few more dollars per month ? they can afford the better product over the good product - and the best product over the better product.

The Metrics of Financing and Energy Savings Make Sense

1

You propose $12,000 in new commercial HVAC equipment that saves your customer $150.00 per month in energy cost. Equipment life span is 12 years.

2

Financing $12,000 requires a monthly payment of about $260.88 for 60 months. The exact number does not include applicable taxes.

3

If the equipment generates $150 per month in energy savings, the net cost for the new equipment is $110.88 per month ($260.88 - $150.00)

4

The net amount paid by your customer for the first 60 months totals $6,652.80 ($110.88 per month X 60 months). After 60 months, no more payments.

However, your equipment's 12 year life span extends for 7 more years. That means

5 your customer could enjoy an additional $12,600 in energy savings over the life of the

equipment! ($150 per month for 7 additional years)

GreatAmerica Contact Information

Gary W. Porter 507.929.5105 (Office) 614.330.2464 (Cell) gporter@

Administered by GreatAmerica Financial Services Corporation, LLC

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