During times of inflation, customer purchasing power is slowly eroded. This means that it takes more “units” of money to purchase the same service or product as it did previously. Decreased customer purchasing power can easily be spotted in the rising price of commodities such as fuel and groceries, as well as higher cost investments like homes and home improvement projects.
As a home improvement contractor, finding the balance between growing your business and providing quality yet affordable home improvement services can be challenging in any economy. Fortunately, there are many strategies you can use to increase customer purchasing power without sacrificing your bottom-line margins. Keep reading to learn more.
Staged Funding
This involves breaking up the total cost of a project into manageable stages or milestones. Instead of a customer paying the entire amount upfront, they pay for each stage as completed. This not only boosts their confidence in the project’s progress but also eases the financial burden. With staged funding, clients are more likely to commit to larger projects, knowing they don’t have to part with a lump sum all at once, improving customer purchasing power.
Same As Cash
Offer a financing option where customers can spread payments over time, but without incurring interest if paid within a specific timeframe. By providing such financing options, you enhance customer purchasing power since they’re not restricted by immediate funds availability.
Refer-a-Friend Discounts
Encourage your customers to refer friends and family by offering them a discount on their next project or service for every successful referral. This not only increases your client base, but also gives your existing customers an incentive to invest more in your services. As word-of-mouth referrals can be powerful, this strategy can have a dual effect of attracting new customers while increasing the customer purchasing power of existing ones.
Bundle Services
Combine several home improvement services into a package deal, offering a reduced rate compared to if those services were purchased separately. Bundling can appeal to homeowners who are looking to undertake multiple projects. By providing a comprehensive package, you not only offer convenience but also make it more affordable, effectively increasing customer purchasing power.
Limited Time Offers
Create urgency by offering special promotions or discounts for a specific timeframe. Such offers can incentivize customers to act quickly, taking advantage of the reduced rates. Limited-time offers can be particularly effective during off-peak seasons when business might be slower. By giving customers the chance to get more value for their money, you’re enhancing their purchasing power.
Offer Affordable Third-Party Customer Financing
Offering affordable third-party financing options is another excellent strategy to increase customer purchasing power. Partnering with financing institutions or offering in-house financing can help clients spread the cost over time, making larger projects seem more affordable and increasing customer purchasing power.
There’s no denying the impact of inflation on customer purchasing power. However, as a home improvement contractor, you have the tools and strategies to counteract these challenges. By understanding and leveraging these techniques, you can grow your business, ensure customer satisfaction, and navigate any economic climate.
Are you ready to grow your business by increasing customer purchasing power?
Partner Forward with Salal Dealer Direct
We team up with contractors nationwide to provide their customers with affordable financing for various solar and home improvement projects.
We can offer some of the most competitive rates and dealer fees because we’re part of a member-owned credit union. That means our profits return to our members—and business partners—through lower rates and fewer fees.
Our Dealer Direct Financing programs feature:
- An online loan application with fast credit decisions and a high approval rate.
- Terms and loan amounts are available to fit various budgets and project sizes.
- Partners pay ZERO dealer fees on our standard program.
How to Start Offering Salal Dealer Financing to Customers
We’re serious about helping your business grow with fast funding times and personalized support from a dedicated and experienced team of lending specialists. To get started, our dealer application process requires these documents:
- Completed dealer questionnaire
- Current income statement and balance sheet
- Copy of business license and/or contractor’s license
