LB Capital and its subsidiaries of trade businesses did $7.3 million in business in 2023.
That’s a nice number, but not as nice as the number from the first quarter of 2024. Late in the third month of Q1, LB Capital was at $7.25 million – or just short of the entire 2023 total. If that trend continues, LB will improve revenues in ’24 by almost 400%.
One factor for the positive upswing: Integrated Financing in ServiceTitan, the cloud-based software for the trades. CEO Bill Rosell said that having financing options built right into ServiceTitan makes for a “frictionless environment” between businesses and the customer.
“From our standpoint, it’s about efficiency,” Rosell said. “The less efficient that you are, the more fluctuation that you're going to have in the way that the sales team is going to close. We don't want that to be an option. We want to say, ‘Let's give more reasons to choose us.’”
And as all businesses know, efficiency matters.
“If you increase your efficiency, you increase your revenue,” Rosell said.
Integrated Financing is a way for ServiceTitan to allow customers to pay for work over time instead of all at once. Rather than paying $4,000 immediately, a customer could finance the work over several years and turn one painful payment into affordable monthly installments.
Integrated Financing makes life easier for the customer while generating revenue for the business.
LB Capital owns a number of trade businesses, more than half in roofing – where new installs can be $10,000 or more. Financing makes that price more tolerable.
“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 more than $2,000. But what sounds better: $4,110 or $12 a month?”
Rosell said LB is running 80-85% of its jobs with financing, and would like to get to 100%, though he also acknowledges that goal may not be achievable. What he does acknowledge are the benefits of financing.
“It makes it cleaner,” Rosell said. “It's easier. You don't wait on your cash. Let's put it to best use. Let's utilize ServiceTitan to make it happen.”
What’s important to the customer?
With Integrated Financing, businesses can provide different financing options on job estimates. The consumer can see the total cost on the iPad screen, and the monthly cost with financing – and options can be included from different financing partners.
“The customer really gets the opportunity to know what's important to them,” Rosell said. “Some might not care about their monthly rate. Some might want the best opportunity right away. I want to make sure that we understand what's important to that customer. The integration really allows us to do that.”
LB offers good-better-best options to customers along with financing options. This method, he said, provides “options to clients about what to choose as far as the solution, but also what to choose as far as how to pay for it.”
An informal ServiceTitan analysis of customers showed that when contractors implement best practices of offering good, better, and best estimate options along with financing, technicians close the most expensive option 32% of the time. Sila Services, a growing home services platform for HVAC, plumbing and electrical, reports that 50% of financing jobs are completed through the ServiceTitan integration, and it’s boosted their close rates 20%.
Rosell compares it to a car buyer shopping for several different cars, then making a decision in part on what financing options may be available from a dealer or auto maker.
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Training is essential
LB Capital even conducts a three-week training program for team members on how best to use Integrated Financing.
The first emphasis is on sales philosophy and how a company representative conducts him or herself in a home.
“How are you there to honor and serve the client?” Rosell said.
The second week is about operations. In the third week come ride-alongs to see how the process works in real time.
“Most people look at training as an expense,” Rosell said. “We're looking at it as an investment into the future. If I train you better on the front end, you close better on the back end. You put yourself into a position that you'll make more money for you, and for me. It works out really well.”
One LB sales rep in 2023 did $4 million in business. In 2024, he’s on a path to $5.8 million. The point: Don’t be afraid to challenge and expect more even from those who are doing well. The focus simply needs to be on ensuring that the business is giving the best options to customers as they consider going ahead with work.
“Every time you give your customer a chance to say no, it's hard to get them back in,” Rosell said.
What advice would he offer to anyone not using or not familiar with ServiceTitan’s Integrated Financing?
“Go find a shop that’s using it,” Rosell said. ”Talk to their people about what it has done with their close ratio.”
Integrated Financing is offered at no additional cost to ServiceTitan customers, so get started today.
