Using finance to pay large bills has been around forever. Mortgages and vehicle leases are payment plans we’re all familiar with. Until recently, many wouldn’t have considered a payment plan to finance the installation of a new hot water system or a lighting upgrade.
However, a shift towards using payment plans to fund smaller home improvement purchases is a trend taking the world by storm. Brighte finance is an affordable, easy option to help you (and your customers) manage cash flow to finalise the sale.
Put yourself in your customers’ shoesYour customer might ask “why would I pay a lump sum payment of $2,500 for my new hot water system if I can break the payment into easy-to-manage fortnightly payments over 6 months, at no extra cost?”.
- They get their brand new hot water system installed immediately.
- They keep their $2,500 in the bank – minus the first fortnightly payment.
- They can manage payments in smaller, regular instalments much like their Netflix subscription.
Here’s what I learned about the benefits of using payment plans
The growing popularity of on-site financing is due not just to the payment flexibility it offers customers, but the benefits it provides tradies too.
There is a significant difference. By selling the payment plan, the business is incurring a minimum of a 7.9% interest fee. If the client is paying the lump sum, they're not having to pay Brighte any fees. You have to ask yourself, in a competitive landscape, can you afford to ignore alternative payment methods that your competitors are using to win jobs?
Selling payment plans is as easy as adding 1 extra line to your quotation
When presenting a payment plan in your customer’s quotation, don’t overwhelm them with too many choices. Simply present one repayment term, eg. 12 months, and present that as an alternative to full payment up-front.
If your customer hints that the fortnightly payment term over 12 months is a bit high, then you can offer payments over 18 months. If they don’t want to commit to a 12-month plan, suggest a 6-month plan instead.
Here is an example:
“Mr Jones, to install your brand-new hot water system today will be a $2,500 investment; OR, I can offer you an easy 12-month payment plan, paid fortnightly at $96.00.”
Inform your customer of any interest rates or fees
Don’t try and hide fees. Finding out you've just won the lotto is a fantastic surprise. Finding out your payment plan is riddled with hidden fees - not so much.
The fees for Brighte, our preferred finance payment plan system, are clearly displayed and simple to understand, making it easy to be honest and transparent with customers.
“Our payment plans are offered with 0% interest, so whether you pay upfront, or choose a payment plan, you won’t pay any extra for your new hot water unit. All other applicable fees are visible during your application process, so there are never any nasty surprises with the final cost.”
If your customer rejects the payment plan, don’t push it
You wouldn’t push your customer to pay cash if they wanted to pay card, so why would you try and force your customer to pay via a payment plan if they don’t want too. You will come across as aggressive and this will increase your risk of losing that job.
Advertise your payment plans
If you’ve recently implemented payment plans as an option into your business - let people know! It’s a great selling point that may open your business to new markets.
Harvey Norman blast ads all over TV and, in every single ad, tell you time and again about their payment plans. If your customer needs to get something fixed and believe it will be expensive, a payment plan presents a cash flow solution that may just be the incentive they need to call your business instead of a competitor’s.
Adding payment plans to your business is easy
Introducing payment plans into your sale process may seem difficult, but it doesn’t need to be. If you keep it simple and break it into the following two steps, you’ll be amazed at the results.
- Use FlatRateNOW to present your quotation and show the Bright finance option at the same time.
- Advise your customer of the fees by reading them from the finance form on the app.
You’d be surprised by how many customers want payment plans
You may not believe your business needs to offer payment plans, but a lack of choice for customers can create purchase barriers.
Imagine a business today that didn’t offer payment with credit card and only accepted cash for their goods and services. They would lose business from all the potential customers who don't carry cash. By increasing the payment options available to your customers, you can ensure you maximise your success rather than limit it.
FlatRateNOW integrates with Brighte so that you can offer your customers payment plans. If your customers agree, you can set up their plan from within your app when they accept the quote. This seamless process will save you time and money by removing the extra administrative work you’d normally have to do to set it up.
Learn more about our Brighte integration here. If you have any questions, please contact us and we will be happy to explain the process to you thoroughly.