PDF What Percentage of Your Customers Pay with a Credit Card?

SnapshotSurveys

April 2016

Consumer Financing

Page 1

In April 2016, EGIA surveyed its contractor network about Consumer Financing. Below is a summary of the results.

? What Percentage of Your Customers Pay with a Credit Card?

Statistics show a dramatic increase in revenue and sales when a business offers credit card payments as an option. Customers will spend more money when they can pay with a credit card and research shows that businesses lose up to 80% of consumer impulse buys if they don't accept credit cards.

We started off by asking our contractor network if they accept credit cards as an option for payment and 92% answered "Yes". Of the contractors that said they do collect credit cards, more than half (66%) indicated that 40% or less of their customers pay with a credit card. Also, on average, contractors indicated they were paying a 2.13.0% transaction fee when processing a credit card.

How Often Are You Paid By Credit Card?

35% - 0-20% of the Time 31% - 21-40% of the Time 24% - 41-60% of the Time

10% - 61-80% of the Time 0% - 81-100% of the Time

31%

35 24 21-40%

%

%

0-20%

41-60%

10%

61-80%

0%

81-100%

? Does Your Company Offer Alternative Financing Options?

At EGIA, we have found that the most successful contractors throughout the country all have one major thing in common; they offer financing options with every sale. When we asked contractors if they offer alternative financing options to their customers, 92% said "Yes". Alternative financing options provide contractors with the ability to offer their customers lower interest rates, extended repayment terms and/or short-term bridge loans that provide the required up-front money for completing home improvements.

The few contractors who answered "No" said that they don't offer alternative financing options to their customers because they don't want to pay the contractor loan fees.

Do You Offer Financing?

92% - Yes

8% - No

92%

Yes 8% No

SnapshotSurveys

Consumer Financing

April 2016

Page 2

? What Type of Alternative Financing Option Does Your Company Primarily Offer to Its Customers?

Next, we wanted to find out what type of alternative

6 Months Same-As-Cash

16%

financing options most contracting companies primarily

offer up to their customers. Of our surveyed contractors, 42% said that they primarily offer a monthly payment option 12 Months Same-As-Cash

26%

instead of a same-as-cash offer (no interest/ no payment). When we conducted this survey back in 2012, we saw

18 Months Same-As-Cash

3%

similar results when we asked this same question. At that 24+ Months Same-As-Cash

time, 43% said they primarily offered a monthly payment

13%

option and 34% said they primarily used a 12 months

same-as-cash financing (no interest/no payment) option.

What Type of Financing Do You Offer?

Monthly Payment Financing

42%

16% - 6 Months Same-As-Cash Financing (No Interest/No Payment) 26% - 12 Months Same-As-Cash Financing (No Interest/No Payment)

3% - 18 Months Same-As-Cash Financing (No Interest/No Payment) 13% - 24+ Months Same-As-Cash Financing (No Interest/No Payment) 42% - Monthly Payment Financing

? How Often Do Your Customers Utilize Alternative Financing When You Offer it to Them?

As a follow up question, we asked contractors how often their customers utilize alternative financing when it's offered to them. A little less than half (42%) of the contractors indicated that their customers use alternative financing up to 20% of the time when it is offered to them. Very few (6%) of the contractors said their customers utilize an alternative financing option between 61-100% of the time it's offered.

How Often Is Financing Used?

42% - 0-20% of the Time 27% - 21-40% of the Time 25% - 41-60% of the Time

6% - 61-80% of the Time 0% - 81-100% of the Time

0% 81-100% of the Time

6% 61-80% of the Time

25% 41-60% of the Time

27% 21-40% of the Time

42% 0-20% of the Time

SnapshotSurveys

Consumer Financing

? Has Offering an Alternative Financing Solution Increased Your Sales Closing Ratio?

April 2016

Page 3

We found that the vast majority of contractors that do offer alternative financing options to their customers believe that their sales closing ratios have increased as a result. This data highlights why having quality financing options at your disposal during the sales process is so important in today's marketplace and that is why EGIA has made it a priority to deliver industry leading financing solutions to EGIA members through our GEOSmart Financing Clearinghouse . With the GEOSmart Financing Clearinghouse, we've done the research, vetted the leading finance service offerings, and leveraged our national buying power to secure the best financing solutions for our members. To learn more, visit geosmart.

Contractor Quotes

"Financing options make it possible for some homeowners to follow through with larger plumbing needs to take care of their homes or commit to the remodel they've been holding off on. Financing options are a positive alternative for our technicians to negotiate with and to keep positive momentum while selling."

-Plumbing Contractor in California

"We introduce financing options early in the sales presentation with each customer. Also, we run several ads per year directly related to financing promotions. There is always an uptick in sales when we advertise financing and our closing ratio improves when a sales representative offers financing early in their presentation."

?Window Contractor in California

Yes

No 81%

19%

Does Financing Increase Your Close Ratio?

81% - Yes

19% - No

"S ince PACE financing came on the scene, our sales have increased by 20%. It's been a fantastic way to help people get the work done that they need with no concern about their credit score or out of pocket costs."

?HVAC Contractor in California

"We offer financing on all sales quotes right up-front. We also offer financing for any repair ticket over $500. It has allowed us to continue to grow and beat out some of our competition that does not offer financing."

?HVAC Contractor in Indiana

"We include financing information on all bids for retrofit jobs. It has helped close several jobs."

-HVAC Contractor in Kansas

You can learn more about the EGIA Snapshot Survey program at: SnapshotSur veys

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