Question: What percentage of total sales should be financed if my sales team is being effective?
Drew Cameron; President, HVAC Sellutions & Energy Design Systems, Inc.:
That’s going to vary by company, and there’s a lot of factors in there – how well are they trained on financing, how many programs do you have available for your team to use, because credit cards are also a form of financing, let’s keep that in mind too.
But between a combination of credit cards and having your standard financing – your zero percent interest; your extended term, low-rate stuff; your programs for the credit-challenged; maybe even a home equity refi piece where you’re dealing with a local credit union – if you have all of those resources in place, and you had your team completely trained on the value and virtues of each of those offerings, and they understood how to promote payment options (cause I don’t like to call it financing, I like to call it “payment options”), and then have the tools in place – your price book, with the monthly payment in a larger font than the total investment – and really had your people skilled in offering that, Id’ like to see the number be at least 60%.
Now that could vary by market, because if you’re in a mass affluent community, where they don’t need to use other people’s money, then you may not find yourself up in that percentage range.
But if I look at Middle America, if you will, who have that middle income – we have some mass affluence maybe with the piece of the territory we serve and maybe some people who are income-confined – then that’s where I’m looking at that 60%+.
And some of the best companies that I see out there, that are very effective at financing, are up in that 75 to 80% financing – though again, that includes credit cards. So even the people who live in the house up on the hill, they might like to get those miles, or points, or cashback or something, so some of them like to take advantage of that.
Weldon, do you have any thoughts on that?