Mike Barnhart, Chief Financial Officer at The Eco Plumbers in Columbus, Ohio, has seen the impact that offering financing to his customers can make.
He has seen the average ticket skyrocket and revenue soar. He’s seen customers add wish-list items such as tankless water heaters to their lives because financing made them affordable.
But the biggest thing offering financing, integrated into ServiceTitan, has brought to The Eco Plumbers is the ability to understand objections that keep them from getting a ‘yes’ from more customers.
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And to understand the impact, Barnhart looks no further than The Selling Wheel, a sales process outlined in a book called “Selling the Wheel” by Jeff Cox and Howard Stevens. The method is used by a lot of companies in the trades to understand why customers buy—or don’t.
Basically, The Eco Plumbers uses The Wheel to answer five questions about their customers’ relationship with them.
Those questions:
Is The Eco Plumbers the right company?
Is theirs the right price for me?
Is this the right solution for my problem?
Is this the right person to earn my business?
Is it the right time for me to act?
“If we can get yesses to all of those, then we’re a definitive yes,” Barnhart says.
And financing, he says, makes yes the more likely answer for some of those questions.
“We’ve won jobs because we offer financing over another company that didn’t, so it helps you be the right company,” Barnhart says.
“In terms of the right solution, if somebody, for example, really wants a tankless water heater because they’re more energy efficient, they save space, and they last twice as long as a traditional water heater, but the price is the issue, you can now sell the right price and the right solution at the same time.
“As far as it being the right time, financing helps because it gives the customer more flexibility. 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.
“The right person, that really comes down to having your technicians educated to be able to speak on financing.”
But closing more jobs is only part of the benefit. Financing also offers The Eco Plumbers the opportunity to help more customers find better solutions, while increasing revenue and average ticket at the same time.
Measuring success, 20 water heaters at a time
How much does the ability to offer financing through ServiceTitan affect the bottom line? For The Eco Plumbers, it could be millions—on water heaters alone.
Barnhart has a morning huddle with his managers and, as part of that meeting, looks at high-value opportunities—sewer replacements and water heaters.
“We typically see about 20 water heaters a day come through our business,” Barnhart says. “That’s 5,000 water heaters a year, so the conversion rate on those is really important.”
Before Eco Plumbers had good financing options, that conversion rate was about 50%. Now, with better training and integrated financing, it’s closer to 60 percent, on average, Barnhart says.
“You start to think about 10% on 5,000 water heaters, what that conversion means,” he says. “An extra 500 water heaters a year, from traditional to tankless being $2,000 to $4,500, it ends up being a pretty staggering number.
“Going up 10% could be as much as $1.5 million to $2 million in revenue.”
Financing plays a big role in conversions on sewer line repairs, too, but for a different reason. There, the issue is the unknown.
“For us, we get sewer backups and when we go out there we find that we try to push the sewage out, the line has collapsed,” Barnhart says. “At that point, whether you use us or you use somebody else, you’re going to be paying a lot of money. And almost every single time, that’s extremely unexpected.
“A water heater is 15 years old, a furnace is 20 years old, that should be expected. Sewer is a different story.”
For that kind of repair, many customers find paying out of their pocket isn’t a viable option.
“Typically over 50% of sewers are financed,” Barnhart says. “It’s really expensive, and they weren’t planning on it.
“They need that extra flexibility.”
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Secret sauce for success? A ServiceTitan feature
Part of The Eco Plumbers’ secret to higher tickets? Presenting the “best” option first, with the price toggled to the low monthly financed price in ServiceTitan.
“We always try to present three options,” Barnhart says, “so in that top option, usually the most expensive option, that price will always be toggled over to the financed price.
“That’s the one they’re going to start off with in terms of explaining to the customer and work down from there.”
That’s because the customer is waiting for a price, Barnhart says.
“That kind of dream option that they’re presenting first is in that toggle mode, so after they’re going through the option, they’re finishing, and they go, ‘this can be as low as $64 a month,’ because it’s toggled there.
“That starts the conversation of, ‘What do you mean $64 a month?’”
Spurred by ServiceTitan and the tech’s presentation, the discussion of financing has begun.
From sales presentation to the bottom line
Offering financing in ServiceTitan plays out in revenue, too. For Barnhart and The Eco Plumbers, it’s a home run.
The Eco Plumbers has been offering financing within ServiceTitan for about two years, using both GreenSky and TURNS. The company has also been an alpha program user with Service Finance.
The Eco Plumbers has made other changes, including expanding the excavation team—“that tends to be a higher price point than a leaky faucet”—so Barnhart is careful not to attribute all the gains to financing.
“But at the same time, every department is up on their average ticket and their conversion rate year-over-year,” he says. “Over the course of a three-year time period we’ve seen the percentage of total revenue from financing has gone from under 20% to more like 35%.”
It’s clear that financing has led to gains, however.
“We certainly saw increases in conversion and average ticket,” Barnhart says. “We’re up 70% year-over-year.
“The cool thing about that is we’ve only gone to 40% more opportunities. If you’re up 70% in revenue and you’re only up 40% in people you’ve seen, the end result of that is either you got more yesses from customers or you were able to provide customers with higher-priced options that work better for them.”
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