How to Sell Financing for High Ticket In Home Sales with Mike O'Connell

Foreign. Hey everybody, it's Jim Johnson here, your host with Contractor Radio and your head coach at Contractor Coach Pro, where we coach contractors on the contractors blueprint. The goal being to help them get control of their business so they can grow their business and truthfully get what they've been after since they started their business, which is personal and financial freedom in this aspect where they can work on it instead of in it every single day. And we do that here and help out here on the Contractor Radio podcast. We do that in a lot of different areas. One of those areas that we talk about an awful lot is finance. And so you have finance kind of a couple of different things. You have financing and running your business, but there's also selling financing and those options to your clients out there in the field. And as these projects get more and more expensive, it's less and less capable for a prospect or homeowner to purchase the item that we may be selling just straight out cash. And so financing becomes an option. I wanted to share today with you guys something from one of the best professionals I've seen at doing this. Brought on a guest today. He's amazing. He was actually at our top rep sales event and he did a presentation on selling financing. It was the best I've ever seen. Absolute financing guru. So don't leave. We'll be right back after work from our sponsor and we'll bring in our guest for how to self financing for or high ticket construction items.

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Back here at Contractor Radio. Thanks to get the referral for that message. If you have not tried get the referral yet, make sure to click the link below. You get a special discount for listening in on Contractor Radio and it is the best referral tool that I've seen out there in the field to not only track them but reward your clients and create raving fans. Today we're here to talk about how to sell financing and really how to sell financing for high ticket construction trade items, roofing, siding, windows, a variety of different things. And while I Have some experience in that. I wanted an absolute expert to talk about this today so that we could share it with our contractors and hopefully give them an advantage out in the field. And I have brought in the finesse of finance. The guru himself, Mike o' Connell from Artis VP of Partnerships. Mike, welcome aboard, man.

Thank you very much. That was too much. Very kind.

No, you are, man. You're too much for sure. It's like I heard your presentation at a top rep event and I've heard literally hundreds of how to sell financing, either live presentations, webinars, somebody coming in and talking to our company. And I haven't met anybody that did it better, was able to explain it, do it clearly. And I want to hopefully replicate some of that today for our audience. I thought it was something that needed to be out there, a little bit broader than just a one off event. It's good to have you.

Thank you so, so much. I enjoyed that experience so much and you know, that was my people, my audience and my tribe. I love in home sales reps. Being a former in home sales rep before, I know the power of the tool and how I use it in the home and why it won business for me and I love sharing that with others. And hey, if I can, if I can help everyone win more, that's what we're all here for.

Amen, brother. That's what we do. We coach contractors to win here at Contractor Coach Pro and we want to do some more of that. Give us a little background. Like you just kind of alluded to the fact that you sold in home, but now you're in this whole finance world. Can you kind of bring us up to speed how we got to there?

Yeah. You know, Jim, I had a unique experience in my life where I ran a home improvement business and I reached that point in the business where I realized that I love the front part of the business. I love the marketing, I love the sales. I just was not really good at the operations and the day to day. And it was a very meaningful experience for me because it allowed me to navigate my life back into where I find the most joy. And I know that may be an overused term these days, but gosh, it was so freeing to when I sold my business, say I want to focus on marketing and sales and I actually sold a business and then went into a business as a sales rep and same type of income, believe it or not, half the stress and a lot more happiness.

It's funny that you say that. It's actually, you know, whenever I go and do presentations for salespeople. I want to let them know they have the best position in the whole entire industry. Their income is unlimited. If they put it in the right amount of effort and they don't have all that risk, the whole pressure, responsibility, all that stuff that comes along with owning and they sure don't have to manage, which that's one of the toughest things to do as well. So it feels like you kind of.

Follow that path, you know, I think people fall into certain skill sets and I love owners for what they do. They're very good at it. And I did not have that skill set. I liked the marketing and sales and then there's ops. People who are able to just go and punch those jobs and grind it out and they're very left brained. I'm more of a right brain free thinker and for me sales and marketing is the best spot.

So you went into home sales, how did you do?

Did very well. So I was in the H Vac industry and financing in H Vac is just baked into the cake. Those of you who are in the H Vac industry, maybe Windows and Bass know how meaningful the tool and how much it's just a core to how you do business and how you sell in the home. I've seen some verticals where it hasn't been adopted, such as roofing and some exterior products where it's, it's that learned experience. And I'm seeing contractors that get it and are gravitating towards those. Those tools like finance are able to pick up market share because it's the same customer base that we're calling on, that same customer that needed their H vac system replaced by me, needs the roof replaced by you. And the same affordability needs are there. So I like bringing this tool to new, newer markets like home improvement. But to answer your question, it was, it was H Vac and I closed on a payment every single time. We had multiple lead sources. Two of them were big box stores. Every time I saw a big box lead, I knew it was a finance close. I didn't even assume cash. It was just great. Do you have that card already available for me to go ahead or do we need to start the application? It was very assumptive, but it played true. So that's what I was doing. And I did very well at it. So much so that one of the lenders who I was sending business to had the opportunity for a regional sales position in the area I lived in. And I was able to slide Right into that opportunity. And I haven't left home improvement lending since.

So. So how long have you been doing this?

I've been doing this since 2017.

Oh, wow. Okay, so it's been a little while now it's four or five years.

Yes, sir.

And so you took all of those skills that you gained as a salesperson in positioning finance and took it to the other side for the lender themselves and teaching other people how to do it. What's that roadmap look like? Like you've been there for four years. I know you just recently made a change. And so tell us about how that went.

Yeah, well, I'll share it like a little bit. Day in the life of what an account executive or someone in my role looks like. Is that what you're asking for, Jim?

Yeah, like I don't know what a guy that works for a lender does. Like, okay a bunch of people and say, hey, I need. Right.

Have you, have you seen the Wolf of Wall Street? Right? Or you just get a boiler room.

That's the way it works.

No, not at all. Not at all. Look, it's, it's the best kept secret. Being an outside rep for a home improvement lender means that I go into the markets in the, in the states where I work and I find contractors. You know, we go into your business and, and we have. I like to say I kind of have the three same conversations over and over again. The first one I need to have is I need to be able to talk about why my lending solution is the best in class. Maybe moving business from another lender to me. Or if you're not already selling with affordabilities, then let's talk about why you need to, why you need to bring that F word into your business. And once we have the buy in, then you really talk to the owner. The owner drives what tools are in front of the sales reps. So someone like me needs to get the owner to sign up for our program, pick the products that are going to be offered to the sales reps and have that conversation and then the fun starts. That third conversation is where I like to live. Jim, that's getting to your sales meeting that Monday morning, whenever you have your meeting and that one person pops in with coffee and donuts. I love that space. Let's talk about guys, let's get the app on your phone. Let's talk about sales. You know, let's come back a month from now, talk about the sales we closed in the interim. I just love it. That's my jelly.

Yeah, I'm actually going to do a private sales training this Friday and Saturday. And the reason I'm doing it Friday and Saturday is only two days I could actually do it. Like my schedule runs pretty busy. He was cool with doing it on a Saturday. So that's what we're going to do. And it is some of the most enjoyable time I spend because I get to spend it with the guys that I know are doing what I did for years and years and years. And hopefully I'm going to share at least three things with them that's going to transform, I hope their income. And that's fun, it's enjoyable. It sounds like you enjoy it quite a bit too.

It is. You know, Jim, we have long term relationships with the contractors that are in our book. And so when you meet those sales team, my contact list is full on my phone of sales reps and they become friends. I like them to call me with, hey, you know, I had a deal that went sideways and to be there to help, that's, that's great. Technology is really picking up those calls for me as it's gotten better and better. So now the calls I'm getting is, hey, you know what? That thing that we talked about in our last sales meeting, I actually did it and I won and I not only sold the job, but I was able to maybe expand the scope of work or move into a higher end product selection. Like those are the calls I love getting. And then coming back into the next sales training and bringing that person up on front with me and sharing that with the rest of the team, that's what it's all about.

So it sounds like you do what my finance guy did. Whenever I was running my own contracting business, he would come in and do some training, get people up to speed with how to position, how to talk about it. What are some of the key things? Like if we're thinking about adding financing to our business or maybe we want to improve what we're doing with financing right now? What are some of the key things a sales guy really needs to understand and know about positioning that and then closing on it. Or should we maybe talk about the decisions the owners have to make first?

You know, it's a more logical progression to talk about the owner. Okay, as far as the experience that I go through because until the owner says this is the lender that I want to do business with and, and selects the products, it's a very specific how whenever you're talking to the sales reps and it's tailored to that tool.

That was always our issue. Like you would have multiple lenders, right? Like we had all kinds of lenders that we would use. And I'm not going to mention any names, but there was so many choices. There's like all these different ways, you know, money, no money, down 18 months, same as cash. There's traditional, you know, you know, short term, midterm, long term loans. And you have all these different choices. And, and each one of those cost a different amount too, right? You have a dealer fee on some, some of them. Maybe there's no dealer fee. Like there's all these different parameters that it falls into. No sales guy can keep up with all that. And so we had to sit with our rep and talk with him about, okay, which ones are the right ones for us? What does that conversation look like for you guys?

Yeah, I think you exactly nailed it, Jim, that what you have here is you have two different interests in mind. You have the business owner and the consumer. And the ideal offer for a consumer might not be ideal for the owner because there's higher cost. So it's having that conversation on here's the different plans. Before we get into the different types of plans, we'll put your audience to sleep with that maybe next. But when we talk about the owner conversation, it's about, look, here's the offers, here's the cost. This is what it is. It is a cost of goods sold. Financing is just like the gas you put in your trucks. It's just like that price increase you received from your manufacturer or multiple this year. You have to embed this as a cost of goods sold because it's the way people purchase today. And that's the very first conversation I have with, with an owner is the need for financing. Look at what's happening in the space today. We can talk the numbers about the affordability and homeowners not having access to the capital in their savings account these days. Those are all real situations. But let me prove it to you. Go on Amazon, go on Walmart, go on any type of e commerce platform today and see a product that's over $100. And you will see a buy now, pay later solution right there, tied behind it at $100. Jim, so what is.

I'm like, no, I'm not doing that. I can't afford a bank. I'm not doing it.

So if you gotta stretch 100 bucks over four payments, what's your $8,000 roof? What's your $20,000 window package? We have to Talk about how it's affordable to the consumers today. Because if we don't, either our competitors are or our customers are going to have to source their own financing. Both of them mean that we're losing the sale if we're at the kitchen table.

Yeah. So back in the day, and when I say back in the day when, when I Left Contracting in 2009, the average roof price was about 8 to $8,500. Siding job, about the same, maybe a hair more. And then windows were usually about double that, maybe triple. Today those numbers are way, like almost double what those numbers were. You know, the average roof price out there between 12,515 grand. So that's a significant increase. It's become almost like buying a car nowadays. And if you don't have this option to say, hey, would you like to pay cash or would you prefer to finance that? You're cutting yourself off. Right. Immediately. Like, if you can't make it affordable for them, they're going to find another solution. So it's something we almost have to do at this point. Would you agree?

Absolutely. So if we're at the owner conversation still, it's. We look at that. So we know that our customers need that. You know, I love your comparison to the automotive market because the, the pricing point's about the same. And look at how we ask their sales force to go to market. The first thing they ask when you walk up on the lot is what kind of payment were you looking for? You know, like they don't even talk about cash anymore. So. So let's look at that. If we know that the consumers need that, then let's look at what is it costing you. Now we know the average cost per lead has just tipped a scale of $400. So by your rep, by not closing the sales pitch table, cost you $400. Now, can. How can we quantify the amount of no's that your reps hearing? Because they did not offer financing, it starts stacking up pretty quick when you look at it in that way.

Yeah. If you got a sales team that closes at approximately 33 to 35%, you're looking at $1,200 cost per acquisition. And so you're literally setting on fire 800 bucks on two of those sales calls. So how do we move that number? By being able to offer an affordable payment option. And so that number goes from 30 to maybe 40 or 50. And then learning how to actually do it, like, it takes technique, but before we get there, what does it look like for an owner, like if you could generalize it, pick like three different packages, what does that look like?

Yeah. And I'm happy to share a little bit about how we tailor a unique solution at Artist Credit, where I am today, to really speak to the consumer at that point of need. But for the owner, what we're doing is we're going to go through the rate card and this is for all lenders and you're going to see different types of loans. You're going to see what we call promotional offers or special financing is a better blanket term. What special financing means is that there's going to be zero percent interest that your customer incurs. And guess what? Because your customer's not paying interest, there is a cost for this service that means it's a higher fee to you, the contractor. That's right. And then you have other offers that are reduced interest rates. You could see an offer, you know, you see 799, 599, 299 types of interest rates that are very, very attractive to a homeowner. Well, to get attractive interest rates, there's a cost for those loans as well because the bank's not making as much. There's not as much opportunity. We have to be made whole. So there's a little bit of a fee and there's a little bit of an interest rate. And then you have those that are more on either a risk based model or a higher interest rate we see in the market typically starting around 9.99 and higher. You have the opportunities to get very low or no fee programs and those make.