First Job Financed Through GE Money

Grumpy

The concept is not identical mike. Taking a credit card is a swipe or a key punch done. I don't have to play games or raise rates. There is a huge difference between taking credit cards to settle a debt and raise my price in order that I may lie to a customer. Bait and switch the way I see it.

Offering financing is fine. As I said if they want financing I have them fill out a quick app and take it to my bank. I leave it to them from that point forward. I don't raise my pricing or play any of the games mentioned in this thread in order to secure that financing. You're trying to compare an apple to an orange. The two are not the same.

Mike Finley

All I'm saying is that from a business stand point, the concept is the same in regard to

If you take credit cards the concept is already the same.

Again:

If you take credit cards the concept is the same. Are you eating the 2-2.5% it costs you to take credit cards? No. Are you jacking up your price only at the time that credit cards are brought up? No. Why would it be any different if you were offering financing?

Only difference is one is called a credit card the other is financing. One is adding 2.0-2.5% the other is 4.9%. Nothing is different.

MEL

[quote=Grumpy;572534]You said you jacked your price up 4.9%.... What did it cost YOU to get her financed? 4.9? I'm confused.

I bumped up the price to cover the fee. Of course I didn't tell the customer that I bumped it up. But if they had told me that they could pay by check then I would have room to lower my price if I needed to to get the sale.

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MEL

MEL

You can use it for othe improvements

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MEL

MEL

[quote=Grumpy;572565]I'm not going to mess with it. I do roof, you pay me. I'm not your accountant or financial advisor. You get your own financing.

Most of my customers don't need it anyways and are smart enough to secure their own financing if they do.

LOL Imagine I give a customer a price then they say they want financing them "Oh my price went up 5% but I am going to give you 0% financing." LOL what moron would fall for that? I don't play games. No games, no gimicks that's what I promise. Obviously the American Public is so stupid they want to be taken advantage of with game, gimicks and cons.

The fee is built into pricing before I quote it. Financing is a way to make it easy for them to buy.

I didn't have to do anything except have her fill out out the application and call GE while I was sitting at her kitchen table. After I gave them her information it only took 10 seconds to get the approval.

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MEL

MALCO.New.York

His name is "Grumpy". Leave him alone!!!

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Something to One may be Nothing to another!

Ultimate Wisdom---------
http://www.youtube.com/watch?v=OW-cnizLDEE

MEL

It looks like your financing method isn't bringing in more customers.

I felt the same way as you do. I have never offered financing before. It's hard to sell anything in the Detroit market so I thought I would try something new and it worked very well.

Increasing my price by 5% isn’t going to hurt anyone, especially me. If I encounter a prospect that doesn’t want financing then I can offer a discount to close the deal.

It gives me room to negotiate, a lot of people I sell to are from other countries, its part of their culture to negotiate.

Maybe you are not selling jobs with financing because you don’t want to, or because you’re not making it easy for them. Some people want a payment plan.

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MEL

MEL

Why should you wait for them to ask you for it? You can quote them the full price and the monthly payment at the same time.

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MEL

MEL

I guess business is booming in Chicago, you probably have more than you can handle.

Maybe you can turn some leads over to Ed the Roofer or better yet, maybe I should come to Chicago since there isn’t much happening in Detroit.

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MEL

MALCO.New.York

Mel......Let it go!!!!

__________________
Something to One may be Nothing to another!

Ultimate Wisdom---------
http://www.youtube.com/watch?v=OW-cnizLDEE

Dale S.

Here is our hands-on practical experience.

1) We up the amount by 7% to cover the potential cost of financing. This applies whether it is credit card or thru GE Money.

2) We offer a 5% discount for cash or check if needed to close the sale. If the discount is not needed, then we don't offer it.

3) Yes, once the customer is approved thru GE Money, the credit line can be used for any home improvement project/material.

4) The approval process for us happened in 1 day or less. I don't remeber the details of the approval process, mostly because it was so simple.

5) Mike has it exactly correct in his assessment of how we look at this option. No different than a credit card, except that we help them get the credit card with a pretty simple process. If we had to run to the bank for each request, or wait for the customer to obtain credit, this tool would not be helpful to us.

dale

tin man

We have a larceny loan Division,we lend them a gun,mask and paper bag and point them in the right direction.In tough times you need tough costumers

Grumpy

I'm not eating the cost Mike as it is marked into the bottom line and spread out amongst all customers regardless if they use their card or not. It's a predictable number. I am however saying to lie to a customer and say they are paying 0% just to jack up THEIR price and their price only isn't something I am willing to do. It's not ethical IMO.

I am not trying to target poor people like it seems everyone around here who offers financing does. I do bring up the fact in my sales presentation that we accept visa and MC and that we also offer financing. If they ask about it I will go into detail, if not I don't even discuss it further. At least they know it's there. The bottom line however is I am seldom ever asked about it.

Would I offer financing through other means, perhaps GE capitol? Sure, why not, but I wouldn't tell them it's 0% when it's not.

Mike Finley

Nobody said anything about any of the unethical parts you are focusing on. All remarks were in regard to the topic of your 1st and 2nd sentences in the quote above. That is why I said - if you're taking credit cards you're doing the same thing already. It's an identical concept from a business's point of view, no different other than one is called a credit card and one is called financing. One has a 2% cost of doing business associated with it and the other has a 4.9% cost of doing business associated with it. Identical concept, no different. The only person bringing up the tactic of jacking up a price is you.

*Note - also - poor people can't be targeted and taken advantage of as you are insinuating, they don't qualify for financing.

Financing is the great tool of the middle class and upper middle class here in America.

MEL

What is so ethical about spreading the cost of credit card fees to customers that do not use a credit card?

I don’t lie to my customers about price; I’m increasing my price by 5% for all customers.

The price increase allows me to make a special offer. It could be a special offer of “No Payments for 6 months” or it could be a discount offer.

If one customer needs a payment plan then I can offer it to them. If another customer needs an incentive for closing the deal “today” then I can offer a 5% discount.

It’s not about ethics, it’s about mindset.

It’s about having a mindset that helps the customer make a purchase.

I get the feeling you’re against offering financing because it doesn’t fit in with your values system. However the customer doesn’t make a purchase based on your value system, they make it based on their own value system.

“Sometimes the prospect buys in spite of the salespersons reasons”.

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MEL

MEL

I don’t target “poor people” at all. I try to target affluent people.

The customer that I referred to in this post makes $98,000 per year as a Professor at a local university.

Your “Outlook of Limitation” won’t allow to make sales using financing. Your Outlook creates a “Self Fulfilling Prophecy” in which you do not close sales with financing.

All you have to do is change your mindset to an “Outlook of Possibility” and learn how to help people get what they want.

Part of being a good sales person is making people “want” what you have to offer.

Like I said in an earlier post the payment should be quoted at the same time as the price. When they see how low the payment is and they see that they defer the payments then some people will want it.

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MEL

MALCO.New.York

Holy Shiite MEL!!!!

__________________
Something to One may be Nothing to another!

Ultimate Wisdom---------
http://www.youtube.com/watch?v=OW-cnizLDEE

Dale S.

As the one who brought up that we charge more for financing jobs, I want to respond to the criticism.

First, I NEVER tell people that this financing is FREE. Give me a break! Everyone knows that anytime a credit card is used, it costs the vendor (me) money. I have to raise my prices to cover this method of payment. This is not a gimmick at all, just reality. In my view, I would much rather just take cash or check, but the marketplace wants to use their credit card. We were driven to accepting credit cards. If I can close a sale by offering a discount for cash, I will...BECAUSE my costs are lower! So I can pass it on and offer a savings.

Financing is EXACTLY the same approach, except the fees are higher and their is one more step (application for credit). So, when I started offering financing thru GE Money I at first did not upcharge. But the more popular the option became, the more I realized the additional cost to the job. So, I had to make a decision on how to handle it. Simple business...NOT ethics!

To me, It is exactly the same as any other service you might offer.

By the way, I do believe it is unethical to say that this is a free service to customers. We NEVER do this. Do you fold services into your bids and never tell the customers? Like maybe an extra trip or 2 that you are pretty sure will happen. What happens when you don't have to make those trips to the jobsite? Do you offer a discount? If not, why not? Isn't that being "unethical"? Or do you just accept the higher profit margin?

dale

Finance Guy

I have read alot of posts recently about financing and 50% up front then with installments, and GE money, GMAC etc...
My question is how many customers do you turn down because they don't qualify through these companies. I bet at least 30% of all credit apps get turned down if not more. With all thats going on in the economy the number is going to go up because of credit scores dropping accross all types of clients. At the same time banks are raising their minimum score requirements to provide financing.
I'm here to help. I'm not going to say i'd be your go to guy. Not at all. Thats GE money and GMAC and other unsecured financing that is easy, quick and to the point. BUT!! I bet everybody has at least two dead deals that aren't even truley dead. Because of FHA financing you could get someone money with a 550 score. We also can accept much higher debt loads than other financing options. Give me a shot at pulling some money out of your trash can. What can it hurt to send your turndowns somewhere. You'll have an answer in 20 mins and the check(for the entire job cost) at settlement has your name on it. You also might end up saving them money at the same time. Thats makes a client for life and more likely to refer you. Call me
Josh Ponder
866-330-4411
Fax 206-203-3024

edit by Ed:
Josh,
If you can provide information, without soliciting your services in your posts, your input might be of assistance. Others may disagree and feel this forum is for contractors only, so I will get a more authoritative decision than just my own.

Ed

Finance Guy

Just trying to be helpfull