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Don’t let these myths keep you from offering consumer financing in ServiceTitan

Abby Ricardo
April 17th, 2024
7 Min Read

Homeowners are growing price shy.

Contractors report a decline in average ticket size since the Fall of 2023 as homeowners lean toward low-cost repairs and maintenance in lieu of big-ticket replacement jobs.

The trend is worrying, especially in an industry that’s seen consistent growth in the last five years. Fear not, though. There are ways to reverse that trend.

Changing the approach to consumer financing is an important first step. The second? Maximizing the benefits of Integrated Financing in ServiceTitan, a feature that makes financing easier, more efficient and more profitable. One analysis of all ServiceTitan customers shows those using Integrated Financing see 16% higher average ticket sizes compared with customers who don’t use it.

“Since implementing ServiceTitan’s Integrated Financing, our average ticket sizes have improved by 15%...our close rates have improved by 20%,” said Alex Dukhin of Sila Services. “Having Integrated Financing allows techs to do everything in one software instead of going to another software and reentering the information. 

“Techs usually do not like to do paperwork, so this simplifies and encourages them to do more financing.”

Changing the approach to financing means being open-minded on offering it. Chase Boyce, Vice President of Sales at HomeTown Services said his business decided to offer financing on every job.

“We’ve actually seen double-digit growth,” Boyce said.

Reid Benjamin, Vice President of Sales at GreenSky, said that top HVAC contractors “are typically financing 70% of their topline residential sales.”

That’s because financing gives customers the purchasing power to pick the replacement or service they want, not just the one they can afford at the moment.

“If you're not giving options, you're giving ultimatums,” said Tommy Mello, Founder of A1 Garage Door Service. “The average person finds it hard to write a check for over $2,000. But what sounds better: $4,110 or $12 a month?”

To fully capitalize on the power of customer financing and grow revenue in 2024, it’s best to understand the myths about financing, and how ServiceTitan’s Integrated Financing can help.

Myth #1: Offering financing on small-ticket jobs will embarrass or insult the homeowner.

There’s a reason it’s not polite to bring up money at the dinner table. Talking about finances is awkward.

The last thing technicians and comfort advisors want to do is offend a customer by implying they can’t afford a $450 repair job. Deciding what customers should be able to afford leaves money on the table.

The top-performing contractors lead with financing as the default on every job regardless of the ticket size or the homeowner’s perceived financial situation.

"I don’t care what car they’re driving. I don’t care what their house costs. You don’t know what’s going on in the background,” said Chuck Upshur, Senior Vice President and Director of Business Development at Service Finance Co. “So, when you present your price, give them payment options, and let them pick the one that works best for their situation.”

An informal ServiceTitan analysis of customers shows that when contractors offer good, better, best estimate options along with financing, technicians close the most expensive option 32% of the time.

Pro Tip: Use Integrated Financing to preselect the plans and terms that automatically appear on the estimate in ServiceTitan Mobile, so the decision-making is taken out of technicians’ hands. 

Myth #2: Homeowners only want financing with 0% interest rates.

Anyone who has shopped for a car recently may have noticed terms like APR as low as 10.99% from businesses that recently offered 0%. In today’s economy, 0% APR comes at the cost of punitive dealer fees and low approval rates.

Many comfort advisors or sales consultants prejudge what good terms look like. Because they prefer the 0% APR of the past, they may forgo offering financing altogether.

This dismisses the reality that consumer trends are changing.

“People would only do financing at 0% because it’s free money,” says Steven Atlman, VP of Sales at Cooper Heating & Cooling, “And now, they’re saying no, no, no, no, I’m OK with paying interest of X amount and extending that for 10, 12, 13, 14, 15 years, so I can stay cash positive.”

Nobody is suggesting leading with a 13.99% interest rate just to land a 0% dealer fee. There is a sweet spot, where the terms offered create a sense of urgency.

Put yourself in the customer’s shoes.

“Imagine if you saw a 60-month loan with 6.99% APR when everywhere else you looked you saw 13.99%?” said Jared Berke, Head of Strategic Sales at Fintech. “You might feel like you need to act on that deal before it’s gone. We can create urgency that turns leads into forever customers this year with a small change.”

How to protect your business from margin-eating dealer fees?

Integrated Financing—offered at no additional cost for ServiceTitan customers—allows contractors to control the plan mix they can offer on different business units or tiers to guarantee margins remain intact on every job. Read: no surprise dealer fees.

Then, increase the equipment cost in your pricebook by the average merchant fee chosen. With these two changes, install jobs could return to pre-pandemic rates of growth. This approach gives customers the monthly payment of yesterday with the installation and equipment price of tomorrow.

Myth #3: Offering financing that isn’t approved will cost a contractor the sale.

This myth is the cousin of Myth #1, where technicians and comfort advisors might size up a customer’s home and decide the homeowner is likely to have a low credit score, so they don’t offer financing.

It’s important that technicians don’t feel reluctant when it comes to financing, especially in those uneasy situations where it might not seem like a homeowner would qualify. To help, ServiceTitan has integrated Second Look financing into the process with Integrated Financing.

Second Look allows customers whose credit score might not meet the criteria of some lenders to gain a “second look ” via a more holistic picture of a homeowner’s creditworthiness and how much they can afford.

TURNS Financing Services is one Second Look provider on ServiceTitan. TURNS can be easily integrated into ServiceTitan along with financing providers such as GoodLeap, Greensky, FinanceIt, and Service Finance.

“If you lead with financing—and (ServiceTitan) can make it really easy for you—you can close more jobs for higher value,” says Chris Hunter, ServiceTitan’s Principal Industry Advisor and founder of the Go Time Success Group and Hunter Super Techs.

Myth #4: Training technicians and sellers to offer financing is too difficult.

Start with the cold-hard facts. If a business is financing less than 40% of jobs, the team is not consistently offering financing in the field.

Changing the team’s mindset about consumer financing takes time and energy, but it is worth the effort—and emphasis.

“We've done over 800,000 transactions, and I can say without a doubt that you’ll at least double your conversions if you lead with monthly payment versus the total dollar amount,” said Matt Dawson, co-founder and CRO of GoodLeap.

So how can a business make financing the default on every job and see close rates and average ticket sizes rise?

First, incorporate it as the standard in the sales playbook.

“A salesperson will sell what they will buy unless there’s a strict sales process or playbook intact,’ Boyce said. “If financing is not a part of that playbook, it’s not going to get offered.” 

Second, bake financing directly into the sales process with ServiceTitan’s Integrated Financing. 

By incorporating the right financing plans at the point of sale within the estimate and offering approvals in seconds from the emailed estimate, Integrated Financing makes it easy to lead with financing on every job.

Getting started with Integrated Financing is simple and costs nothing as a ServiceTitan customer. To get started, meet with the FinTech team to enable the integration. The Utilization team is then ready and waiting to help set up rules and train your techs on how to present in the field.

Get started with Integrated Financing today.

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