Electrician Customer Financing Options: A Proven Way to Grow Revenue

How does customer financing work?

It's important for business owners to understand how customer financing works and how integrated technology makes it hassle-free for electrical companies. 

A company using ServiceTitan's integrated customer financing works with a partnered industry leader to offer customers tiered payment options for higher-ticket jobs. 

For instance, an electrical company chooses three monthly payment plans or reduced-rate APR plans to list as good-better-and-best options, and three promotional plans, such as 12-month, 18-month, and 24-month same-as-cash, all with prices set to protect the company's margin.

When an electrical business integrates their customized plans into ServiceTitan, customers choose whether to apply for financing, select their desired plan, enter their desired loan amount, complete a short application process, and instantly find out approval status. The ServiceTitan financial partner handles the loan particulars, including customer payments. 

Customer financing helps your electrical customers because it works in the same way as credit cards or lines of credit work for home improvement repairs or equipment financing, giving customers flexibility for when they pay it back.

ServiceTitan's integrated financing provides:

• Multiple industry-leading financing partners

• Personalized parameters to protect business profit

• Flexible payment options to meet customer needs

• In-app application process, resulting in zero paperwork

• Instant customer approval, so jobs continue uninterrupted

To be clear, offering financing options to customers differs from electrician business loans, which are large or small business loans from lenders to supply short-term or long-term business funding to meet your company’s business needs.

Increase electrical sales in the field

• Automatically display financing options 

• Facilitate sales by empowering customers

Statistics show customer financing is a proven way to improve sales in the field, increasing revenue by more than 17%, according to results from ServiceTitan customer data.

So why doesn't every electrical service company offer customer financing? Professional electricians may feel apprehensive, assuming customers don't need, or want, payment options. But ServiceTitan Mobile removes the difficulty of mentioning the subject, because the techs’ mobile tablet automatically displays customer financing options to customers when they view the good-better-and-best options.

"It's showing them what their low monthly payment can be, if they're approved, and we're taking those hard conversations away," Armstrong says. "That's the first thing customers see, and they're going to ask the technician, 'Well, how do I get this $197 a month?' And that's an easy conversation."

No matter whether customers say yes or no to financing, it's a win-win situation for both the customers and the electrical company.

"By giving them the option to choose, you're just opening the door for the customer to feel like they're in control of the sale," Armstrong says. "They have the option to choose what makes most sense for them without having an intimidating conversation."

Expand average ticket sizes

• Enhance your company's sales strategy

• Provide affordability for upgrades

Financing amps up your company's sales strategy. Just picture your tech showing a customer good, better, and best pricebook options on a tablet, with your company's "best" option just a few dollars more with a financing plan and a better interest rate promotion.

"It's kind of like, 'Oh wow, if I go for the best option, then I can take advantage of that 48-months, zero-interest loan that I'm not going to get for going with the good option,'" Armstrong explains of a customer's reasoning.

By strategizing customer financing options, you're equipping your techs to convert electrical leads into more on-site sales, because all of the options become more affordable.

Electrical customers who apply for a $10,000 loan might see they're approved for $15,000, and may decide to add on another electrical product.

Darius Lyvers, Chief Operating Officer at F.H. Furr Plumbing, Heating, Air Conditioning and Electrical in Northern Virginia, trains techs to approach three types of buyers—low interest, no interest, or low payment. He uses custom rules to provide an option for each type into ServiceTitan.

“When you talk about integrated financing, it’s not just whether they finance or not,” Lyvers says. “It opens the door for the customer to afford all your products, and they may buy something they otherwise wouldn’t have if you hadn’t presented financing options.

Provide seamless customer experiences

• Streamline financing application process

• Provide flexible solutions for every customer 

Electrical contractors who offer financing options provide immediate solutions for customers, from start to finish. This becomes important for customers whose electrical system requires a big-ticket upgrade, and they don't have, or don't want to spend, the money upfront.

"Financing helps because it gives the customer more flexibility," says Mike Barnhart, Chief Financial Officer at The Eco Plumbers in Columbus, Ohio. "You don’t have to come up with all this money today or tomorrow, or even a year from now, given the different flexibility on different plans these days."

Integrated customer financing makes a difficult situation easier on the customer. ServiceTitan speeds up the application process by automatically filling in customer information. Depending on the loan servicing company, customers with less-than-stellar credit may obtain a loan.

GreenSky and Service Finance offer unsecured installment loans, which means customers can submit the total household income, without digging up tax forms or homeownership paperwork for credit approval. Once customers enter information in just a few fields, they find out within seconds if they're approved for the loan.

"You're providing a solution for that customer to get their problem solved instantly and provide them with options to choose how they're going to be able to pay for it, which will create a long-term relationship with that customer," Armstrong says. "It's good business practice. You're helping a customer in need."

When your company provides superior customer experiences and offers financing that matches (or surpasses) your competition, your customers will be more likely to give top reviews and word-of-mouth referrals, resulting in new customers.

Simplify invoicing and payments

• Centralize customer information

• Increase efficiency with an all-in-one platform

Simplify your company's invoicing and payment processes by keeping it all in one place, on one platform.

Train your team on electrical invoicing software, which makes it easy for techs to convert estimates to invoices and immediately send it to customers. It lightens work on the back office, too, by increasing billing efficiency and ensuring faster payments.

Techs can securely capture credit cards or checks in the field, or customers can receive a link to a personalized online payment portal. Even if a customer opted for an add-on, or decided to sign up for a maintenance membership, your entire team has access to the information it needs.

"We want to provide our contractors in the trades with an all-in-one platform that is going to be a solution for you and your business," Armstrong says.

Boost your company's bottom line

• Increase your close rate

• Accurately measure results

When sales surge in the field, your company revenue also increases. Track the numbers to see where your company truly stands, and where you need to focus. With ServiceTitan's reporting software, you can instantly see which financing plans customers choose, and the percentage of financed jobs, down to each technician.

Those in the industry who have seen service businesses succeed over and over again emphasize the value of customer financing.

"I've seen businesses take off; I've had sales reps call me two years down the road to say, 'Hey, because you taught me this little trick, I now have turned my 33% close rate into 79%,'" Armstrong says. "The companies good at offering payment options to their customers are extremely successful businesses today."