Payment Options That Incentivize Buying
Every business wants a customer with their ideal buying behaviors. But customers aren’t born with those behaviors – it’s the business’s responsibility to incentivize the buying behavior that they’re seeking.
In this episode, contracting legend Drew Cameron is talking all about the payment options that you can offer that will incentivize buying for your customers. It’s not about simply being rigid – it’s about being adaptable to your customers by offering a variety of options that will gently guide them to make a choice.
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Audio Transcription (in beta, please be wary of typos)
00:00:00:00 – 00:00:10:16
On today’s show, you’re going to learn how to use payment options to incentivize your homeowners to buy.
00:00:10:19 – 00:00:32:02
All right, well, let’s get going with today’s show starring the one and only Mr. Drew Cameron. He’s going to talk to us about using payment options to incentivize your homeowners to buy from you. Take it away, drew. Hi, and welcome to another episode of Cracking the Code. I am your host, Drew Cameron with Flow Odyssey and Energy Design Systems on behalf of contractor University powered by SGA.
00:00:32:04 – 00:00:56:17
And today we’re going to talk about using payment options to incentivize buying. Right. And so what are we talking about. We’re talking about financing credit cards and leasing. And today specifically we’re gonna talk about traditional financing, you know, financing that you get through, a myriad of lenders that you find on your own through Optimus, which you get through Gia or whatever lender you get through your manufacturing relationship.
00:00:56:20 – 00:01:20:19
Again, I’m, I’m agnostic as to who you partner with. I’m kind of biased a little towards Optimus because I think it’s the most favorable program out there. It gives you the most variety and most flexibility, as well as the highest, approval rates, number one and lower lowest, your cost as well as, you know, tying in leasing and I believe credit card, processing is coming probably next year at some point.
00:01:20:25 – 00:01:46:28
But that being said, let’s dive into the content. All right. And so we want to incentivize good buyer behaviors. Meaning as a member of E-gift Contractor University, you have to understand what EJ’s mission was when they began this nonprofit journey 90, you know, 90 plus years ago, because that’s how long EJ has been around. The Electric and Gas Industry Association contractor University came about in 2016.
00:01:47:00 – 00:02:06:10
17 time frame and Optimus is in the last couple of years here right as far as financing. But E.J. was working with utilities around the country and promoting energy efficiency into the marketplace. That is the mission of what it is that they do as an organization, as at the umbrella level. Right. Overseeing everything that we do.
00:02:06:10 – 00:02:34:22
And as a member of the board of directors, I can tell you firsthand that everything that we do through that, that portal and all the channels is all geared towards promoting efficiency out into the marketplace. They they believe at AGI, the organization at its core said, hey, if we promote that out there and we make it easy for customers to get engaged and contractors to work with customers, as well as utilities that we can make this, more readily adoptable, whatever the program may be.
00:02:34:22 – 00:03:06:16
Sometimes it’s water conservation, sometimes it’s, gas conservation, sometimes there’s electricity conservation, sometimes it’s, you know, promoting high efficiency equipment or insulation or or whatever it is. Right. We under a lot of those programs at EGI. So I want to talk to you today about how we finance what it is that we do as contractors, whether that be when, Hvac, indoor air quality generators, solar, products and services, anything that you do, tankless water heaters, all, all of that and above and beyond.
00:03:06:18 – 00:03:25:25
So that being said, we want to provide a choice that leads customers to step up. Meaning I want them to see that everything that we do is valuable. That’s part of what it is we do in the sales process is we make the our products and services, our people in our processes valuable, but then we have to make them affordable to customers.
00:03:25:25 – 00:03:51:15
That’s part of our job, is selling the money. And so that being said, I kind of build a framework that’s, built into my price. But but you can apply this to your products and services as well. And so you’ll what you’ll see that I did here is I looked at basically taking advantage of, an efficiency initiative or incentive, if you will, the flexible investment initiative or plan and then a 0% plan.
00:03:51:18 – 00:04:11:29
Again, I’m hitting anybody who is looking at, taking a payment plan and being adaptable to them. So let’s go ahead and look at each of these levels here. So the efficiency incentive is if you go across that top row, and you see the columns that I have, I have blue, platinum, gold, silver, bronze, mud and light green.
00:04:12:01 – 00:04:30:07
And that’s the, you know, the colors of the columns in my price book. Again, I don’t say that. I don’t put that that value on there. The names that you see here, because we don’t promote, manufacturers, we don’t promote brand, we don’t promote efficiencies and models and capacities. We promote solutions and the type of solution that the customer is going to get.
00:04:30:12 – 00:04:51:25
So we have at the highest level, we have a real solution. And it’s blue. It’s royal blue. And then we have our prestige solution, our signature solution, our Optum solution, which is like Optum, our luxe or luxury solution, our elevated solution and our classic solution and our classic solution is basically a lateral move from what it is that they have to today’s entry level technology.
00:04:52:01 – 00:05:08:18
Everything that’s here is a great solution installed by our class a, installers. And it’s better than what you got. And, you know, in my mind, better than anything else that’s out there in the marketplace that they could get through anybody else because nobody does what it is that we do the way we do it to the level we do it for as little as we charge.
00:05:08:18 – 00:05:32:05
It doesn’t make us the most expensive or the least expensive. It makes us the most valuable. But don’t take my word for it. That’s obviously what the customers say in our reviews. So that being said, the highest efficiency, most value, latest, greatest data, latest state of the art technology, most efficient, most comfortable, best warranties, best guarantees, peace of mind protections, quietest system out there, most maintenance included as well.
00:05:32:09 – 00:05:53:07
That’s at the top line. Royal Royal system. And it steps down from there. And again, doesn’t matter. This is going to vary for every contractor across the United States based on the products that you sell. And we step down in the way of technology and benefits and so forth. And so when you do so again, you basically lose the cachet of the incentive of the best plan that we have available.
00:05:53:07 – 00:06:09:19
So we might do two, nine, nine for 12 years, for nine, nine for ten years, six, nine, nine for 12 years, six, nine, nine for ten years, six, nine, nine for seven years, 999, nine for five years and 9999 for five years. Below that, what you see is the payment factor. You use the payment factor times the total investment.
00:06:09:19 – 00:06:29:18
Then that’s going to give you the monthly payment that the customer is going to realize. All right. And so that is basically promoting the efficiency if you’re willing to go ahead and be more efficient because we’re part of a nationwide or actually international organization that promotes energy efficiency into the marketplace, I can get you more favorable terms if you’re willing to go ahead and step up.
00:06:29:21 – 00:06:55:20
But all the programs are basically great and in alignment. And since there’s no, no recourse and, there’s no, collateral needed on these, again, there’s debate meaning they, they’re risk free, secure free, loans. Right? There’s no security that’s required as far as the down payment or, or collateral. So, again, these rates are very favorable for that.
00:06:55:23 – 00:07:12:03
And again, these would be for energy repair cost savings. And then we have what is called what we call the inflexible investment. This is where I’m kind of shoot for the lowest payment possible based on the investment that you’re willing to make. Okay. This is just my mantra behind this or my psychology behind this, as well as it’s the rate and the term.
00:07:12:05 – 00:07:36:07
Okay. And I like basically doing six, nine, nine. I think bang for the buck you have to pay as a dealer. I think you can cover in your cost in a very favorable manner and have the customer pay for the cost, obviously. And, get me a very flexible, payment plan on all of now. I will go, longer term on my upper level solutions and shorter term on more entry level solutions.
00:07:36:07 – 00:07:52:13
And so, you see, I go six, nine, nine for ten years at the flexible investment plan level, six, nine nine for seven years at the entry level. So there’s four at the top level, premium level. And then there’s three at the at the lower level. And then I have my 0% options. Right. And so it’s going to be very below that.
00:07:52:13 – 00:08:13:16
You see the payment factor for those. So you do that like 116 multiplier against your price to get the ultimate payment. And then at the bottom you’re going to take 0% for the term. And you just divide the total investment by the term. And that’s going to get you your payment. So when you basically look at that framework that you built into your price book, it determined the prices in the lower table.
00:08:13:19 – 00:08:37:01
Excuse me. And so you can see here for a, what we know to be a 36,000 BTU, cooling system and an 80,000 BTU heating system. That’s the model number at the left hand side there. Aeacae. I that’s the name of the company. And, or the the abbreviation of the name of the company, the transformative experience, because it’s expert air and customer care is the name of the company.
00:08:37:01 – 00:08:56:25
AeaeaC 3680. And then you can see I can pick up the letter of the column along with the row for based on the type of the system, along with the crew hours to do the job to get my model number. And so that’s just happens to be how we build our price book. So it’s aeaC 3680 R, DFG 12.
00:08:56:25 – 00:09:15:26
That happens to be the model number. Just throwing that out there. So you if you’re curious as to what those designations were. But as you can see, the efficiency incentive investment is going to be $118.21. And that’s two, nine, nine for 12 years. Again, no prepayment penalty. And what you save in energy repair costs will offset that investment.
00:09:15:29 – 00:09:40:00
And then it steps it steps down or steps up. And you’re saying well hold on. The total investment. If you look at the bottom, row of that, that bottom table, there is the total investment. Yes. The in that particular situation, the client put a better system at the prestige level, a more expensive system. But because they partnered with a couple manufacturers, that’s what they put there.
00:09:40:04 – 00:10:07:29
They got a better system at the high end level. This happens to be a dike and solution in this particular case. And and that’s what they were able to put at the top level. And so that technology got that price point to where it is, because again, we also went to four, nine, nine for ten years, and we ended up with a higher payment, meaning you can get a better system with better warranties, better guarantees, better technology for less money because of the rate and term, because you’ve chosen to play the game at the highest level level.
00:10:08:01 – 00:10:25:06
Meaning you bought the best system that we have. So you get a more favorable payment. And as you can see, then we step down from 160 down to 140, but then we jump back up to 156 again. Is the rate in a term see what you’re going to save in energy and repair cost is actually going to offset that thing.
00:10:25:06 – 00:10:52:00
And so you get a more favorable payment. And so you’re gamifying, if you will, the, you know, the pricing because they’ve chosen to go with energy, more energy efficient equipment. And so they get a more favorable payment. And so that’s one way to play this game. As you can see, the entry level solution is $178 a month, albeit at 99 for five years, 60 months versus 299 for 12 years, right, or 144 months.
00:10:52:08 – 00:11:14:12
So that’s how you’re getting that payment to play out. Again, it’s not it’s not manipulative. It’s just basically saying, hey, because we partnered with this organization, we’re able to offer you these types of programs. Now, if that program doesn’t apply to you and you just want a standard program, we can basically do 6.99%, okay, for ten years, on our upper level systems and for seven years on our entry level systems.
00:11:14:12 – 00:11:44:12
And that’s that middle one. The flexible investment plan goes 165 175 again, that price difference is kind of throwing things off a little bit down to 168 down to 156. And again then it jumps up to 165. Why shorter term to cover the cost even though it’s the same rate. So when you look at that, if you if you look at it from entry level to the top of the line, we go from 126 to 165, $40 a month, a $1 a day, basically to get the best solution.
00:11:44:19 – 00:12:02:11
See, I don’t have to sell the total investment. I don’t have to sell the difference between, 8003, 96 and 14 or 15,000. I only have to sell the incremental difference. I have to get the customer to see that it makes economic sense to step up and get the thing that you want, not just the thing that you can afford.
00:12:02:11 – 00:12:21:08
And oh, by the way, you actually can’t afford it because it’s a small monthly payment. If you look at all of the payments, that I’ve listed there, with the exception of when you go to the 0% financing. But those first two rows, all the investments are less than our cable and internet bill, where their cell phone bill to have two cell phones definitely.
00:12:21:11 – 00:12:40:20
Probably less than a car payment. And this is something that’s going to last for 15 to 20 years or a life or longer, if they take care of it. And it’s going to basically put a tourniquet on energy repair costs, and it’s going to improve the comfort, health and safety in the home, right? What else can they do that makes as much sense economically?
00:12:40:22 – 00:13:01:27
So again, you’re providing choices that lead to good buying behaviors because you’ve used the financing that you get at Gaea to do so. So with that being said, as I always finish up with as a member, you are the mission. If you have any questions about how to do this, jump on a coaching call with me. If your membership allows for it, or feel free to reach out to me, an email or a phone call.
00:13:02:00 – 00:13:19:12
Be happy to answer any questions you got. Until next time. Well, now as always, some awesome content there for Mr. Drew Cameron. Listen, be sure to share this on Facebook. And if you’re not a member, click on the button below and get a 30 day free trial, which will give you access to all of our amazing content. Well, that’s it for this week.
00:13:19:12 – 00:13:50:08
Focus on cracking the code. We’ll see you next time. Until then, bye bye for now.
