Just because you're busy doesn't mean you shouldn't try to make more money on every project. It's not about being "busy"... it's about getting ahead financially by working smarter - not working harder. In this video, we taking about how to offer project financing for painting contractors that's easy to understand and even easier to implement on every sales call.

Painting Contractor Financing

Financing for Painting Contractors

Brandon Lewis:
Let's talk a little bit about financing. It's one of those what I'd almost call secondary disciplines that can help you make a lot more money in your painting business. First thing you have to learn is how to sell persuasively, and then give your clients options.

Brandon Lewis:
Hello, everyone. I'm Brandon Lewis, founder of the Academy for Professional Painting Contractors. Here with me today is James of Hearth Financing, who has helped a number of painting contractors that I know generate more revenue, increase transaction size, process work at a higher closing rate in a way that's pretty interesting and very innovative. We've been working with Hearth for some time. They've been a remarkable partner for those in the painting industry. I'm glad to have him here. James, welcome to the program, buddy.

James Waite:
Thank you so much for having us. It's always a pleasure.

Brandon Lewis:
Well, so let's talk a little bit about financing. It's one of those what I'd almost call secondary disciplines that can help you make a lot more money in your painting business. First thing you have to learn is how to sell persuasively, and then give your clients options. We know that today, the American homeowner, the Canadian homeowner, and the Australian and even the homeowner in the United Kingdom, because we have lots of different folks in different areas, though you only work, I believe, in North America, were seeing a huge shift towards financing. People are financing everything in their life, their own payment plans.

They're looking for those options to preserve cash and capital, especially in an uncertain economic environment. I'm glad to have you on this program, because it really can make a big difference, especially with large, whole house exterior repaints or interior jobs, where the transaction size gets up there a little bit above the comfort zone. When you are a premium price provider who offers better services and reduce risk, you're never going to be the cheapest, so you have to give people tools in order to be able to afford those premier services that you provide.

Talk a little bit about what we're going to be reviewing today, James.

James Waite:
Absolutely. Really, today, we're going to be covering a number of different things. One, obviously, like Brandon said, we've got a long standing partnership with Painters Academy. Again, we've had a lot of success with the members that are actively using Hearth. We'll talk a little bit about that as well. We'll really talk a little bit about why we're different. Again, there's a lot of financing options out there. Most individuals in this space are familiar with some of the more traditional financing options, having to pay things like dealer fees. We broke the mold at Hearth, and have been doing it very much different.

James Waite:
Honestly, it works a hell of a lot better for painting than it does some of the more traditional products. Then the other thing we'll discuss too is just functionally how it works. It's really difficult to envision the value of something new in your organization if you can't see how it would layer into your process, period. You guys have a really great selling methodology, and it's really just an understanding of how you layer in the actual use of our apps on our financing products to understand what this will do for your business. Like Brandon said, there's a massive push globally, really, because money is cheap. It is.

Even if I'm going to be doing a whole house, I mean, my wife and I painted the exterior of our home, and it costs us excess of, I think, it was $6,000, $7,000 to do some of that. When we looked at that, we thought, "I could theoretically pull that money out of a savings or a brokerage, or go against the HELOC that we had for some of the other projects that we did," but in reality, rates are low right now. I can get much easier access to financing with low rates in way faster amounts of time. There's a lot of cool options. We'll go through all that stuff.

Beyond that, we'll also talk about just what are the next steps? If this is something that is on your radar or what you were looking to do, we'll show you how to do that. Obviously, your organization has just been paramount in really educating this industry on how to do this. That's what we're going to be covering today.

Brandon Lewis:
Well, I'd like to talk a little bit about why we partnered with Hearth versus other people, and the way that you have a fixed flat entry. Also, you don't necessarily have a captive financing arm like a lot of the other companies do that offer this. What that means is number one, as a painting contractor, if you get serious, and you should, in my opinion, because every little incremental advantage you can have over your competition just means that for the same amount of work you do, you create a higher income for yourself, so it's necessary to offer financing. Once you're sold on that, then you got to start looking at, "How can I provide the best financing options to my clients, yet retain the largest percentage of gross profits in a project?"

Hearth doesn't take a percentage. They don't take a cut. They don't become a middleman. They are simply a service provider. You walk into them in a very unique way in this industry. The second thing I like is the fact that when you offer financing options through a multitude of different providers, as Hearth does, if somebody has weird credit, bad credit, isn't quite a fit, they have options. It's not a one-size fits all that you're trying to constantly put people into.

Brandon Lewis:
James is going to talk a little bit about that, and [inaudible 00:06:25] uniquely positioned with their service offerings, plus, a lot of their digital tools, which are frankly amazing to be able to get this into your power paint presentation process or whatever sales process you use so that at the right moment, you can give your clients tools to say yes. That's what we're really after.

James Waite:
Awesome. Well, again, we're equally as grateful to work with you guys. I'll build off that. Let's take that and run with it. We'll start first and foremost with why we're different. As Brandon mentioned, the historic way that financing for painting contractors works in home improvement, whether you're a painting contractor or a painting professional, excuse me, or a GC, a roofer, it doesn't matter. There was really that one-size-fits-all product, where I took a low APR, typically something that was subsidized, almost like if you were going to go buy a car, and you look at it, and you go, "Oh, I want a new F150." Cool. Ford credit is running a special 0% APR on approved credit.

Why do they do that? Marketing. Brings a lot more people in. It de-risks this idea that, "Oh, man, it's going to be super expensive for me to buy a new car." With 0%, you can get somebody into a much nicer car, because your payments are going to be lower per month." Someone's paying for that. 0% does not exist in this world. In fact, anything lower than 4.99 does not exist in this world, outside of a mortgage or something backed by a significant asset. Again, when looking at a lot of this, historic financing charge you guys, the professional, some dealer fee or per transaction fee.

James Waite:
If I sold that 7,000 exterior painting that my wife and I had to pay, well, if we financed that, they would have charged that dealer typically somewhere 5% to 15% in a fee. That's insane. Why is a bank or a lender charging you guys, the professional, to offer this to their customers? They're making money on both ends. That's pretty greedy. What we looked at is we said, "There's got to be a better way to do it." That's exactly what we did. The biggest thing that we did, and it's the number one pain point that we experience anytime we onboard a new professional in the home improvement space, the number one thing that we hear is, "I hate paying dealer fees."

Financing for Painting Contractors

Cool, no dealer fees. Done. It's a membership-based program, one time annual fee. Typically, no one's paying an excess. This is even some of our multi-hundred million dollar businesses. They're not paying anything more than somewhere around $1,500, $1,700 a year. That's unlimited loan options and offers to customers with no fees whatsoever. Why? We're a tech company. We can do that. We work with 13 lenders that obviously, it's going to be going up as we add additional lenders, but what that allows us to do, like Brandon mentioned, is we can go all the way as low as a 500 FICO with one app.

You never have this instance where you get to that 11th hour in your pitch, and you go, "It's going to cost X amount of dollars." They say, "Oh, well, I want to use financing." Well, historically, you had to go and then do a hard pull on credit. At that point, you either got a, "Yes, awesome, or a no, damn it. What do I do?" Ours, we do it differently. Every single customer starts with a pre-qual. That pre-qual is two minutes or less. It doesn't touch their credit score whatsoever. It's a soft pull, and there's no obligation to borrow if you don't like the rates that you see. What we do is we send that customer's information out to currently those 13 different lenders, and they fight for that business as it should be.

It's their prerogative to offer that person as low a rate as possible, given their financial profile. Now, a soft pull allows us to see a lot of stuff on the back end, things like their debt to income, their FICO score, and then if they have any other negative dings or anything like that on their credit. Like Brandon mentioned, there's going to be those people you work with that they need the paint. They need it bad, but it's a much different conversation around, "Let's get this lowest possible cost of ownership," to, "Let's just get you access to something." You just need options.

The beautiful thing is you have one process that works with literally anyone, and you have products that are tiered and catered to that individual based on whatever their profile is. Honestly, we took a product that originally was homeowner facing, and then built it specifically to work with you guys, that professional. This is a perfect example of what I mentioned. As we go back in and take a look, obviously, this is one of those amazing legal approved rate sheets, but the bigger thing to understand is there's two very important conversations happening. These top two credit buckets are really looking at, "What is the lowest possible cost of ownership that I can get?"

These are the more rate sensitive individuals. They've worked to be on time with their bills. They've effectively built their own personal buying power. Rates can be as low as 4.99 for this group. Our loans, when you start going into this bucket, that bottom end of the credit spectrum, they know they're not going to see much. They know that they've been declined at other places. They don't have likely a lot available on their credit cards. It's just a fact. They know where they're at. Maybe they went through a bad divorce. Maybe they went through a bankruptcy. Whatever it might be, again, COVID messed up a lot of people's financial profiles. It did.

Like Brandon mentioned, in these uncertain times, you got to have access to both these conversations, access and affordability. We know that rates can be as low as a 4.99 for any customer. We know our loans can be as low as $1,000, but go all the way up as high as $100,000. Again, when you look at that, there shouldn't be a single project that you guys do that can't be used for this. If you do anything in insurance, you can also use this for the deductible. There's a ton of stuff that we've made available. It's just a matter of figuring out what's best for that person.

Go ahead.

Brandon Lewis:
I do want to jump in here especially to talk about large transaction sizes. One of the first things I see with individuals that have very weak selling processes that aren't persuasive, that don't use best practices is that their average transaction size is very low. That's a combination of poor sales processes, low percentages of repeat and referral clients that tend to close at higher rates or strictly sourcing your leads online, where we know that because there's not a lot of familiarity or pre-qualification behaviorally or financially that those close at low rates. But being able to offer financing, when you ask for the business, it takes that conversation from a 13,000 or a 15,000 or a $25,000 transaction, and it turns it into a payment conversation.

It's a lot easier to swallow a payment for most Americans than it is to swallow a large lump sum. If you're struggling when these large exterior and interior projects come around, especially if they've got a significant amount of carpentry or other types of dry wall paperwork, et cetera, you're crazy not to offer this because you've got so little to lose and so much to gain. With the entry into the program, which James is going to talk to discounted through a special offer at the end, honestly, you really got to close half a job, half of an average size job a year to break even that you wouldn't have gotten from not offering financing.

Financing for Painting Contractors

All of the ROI numbers are there. That makes this a very simple decision to make.

James Waite:
Correct. The ROI, like you mentioned, is silly, right? It really truly does become a no brainer. There's two statistics that I'm going to drop as we go on to the next slide, which will actually feed right into what you were talking about, "How do I present this to somebody, whether it's a smaller average ticket or whether it's a huge ticket?" We work with both guys. Again, we represent 52 different verticals, painting being a really healthy one of those, but we work with loans in excess of 100,000. Again, when looking at this, the other thing you have to understand is there's two huge statistics that are just industry wide when it comes to offering financing.

One is just offering financing consistently on each one of your projects saying, "Hey, your payments could be as low as." That alone typically equates to a 17% to 18% lift in your closing percentage, just by doing that, literally by doing nothing other than saying, "Hey, Brandon, you know what? It's a $5,000, but we can get your payments as low as this because we have financing options available," that alone, 17%, 18% lift in what you do. If you didn't run a single additional job for 2021, and all you did was offer financing, boom, you're already net positive.

Brandon Lewis:
From a functional standpoint, now you're having a conversation with the client if you're wise, where you simply go, "Taking a look at this, Mrs. Johnson, we have two options. One of them is to simply pay up front, which would be this. The other one is a payment. Which of those two looks more attractive to you?" At least now, they're thinking about making a decision on financing, and less about whether they're going to go with you or not. It does change the conversation slightly. Occasionally, that can be very helpful.

James Waite:
Absolutely. Then the next thing you have to understand too, just like Brandon mentioned, when you present a cash deal next to a finance deal, the industry statistic, you guys, is that a finance deal is typically 30% larger than a cash deal. If I'm not paying any dealer fees, I'll take that net 30% increase all day long, and you'd be silly not to. Again, I'll show you how we're able to do that. All right, so when we come in, and we actually start selling the cars, one of the things you have to understand too is we can bring financing we further forward in that conversation.

If I say, "Hey, Brandon, it's two minutes or less, it doesn't impact your credit score whatsoever, because this is a soft pull, and then beyond that, there's no obligation to borrow just to see what we can do." What it allows me to do is totally de-risk that pre-qual for that customer. Why the hell wouldn't you? It really truly is a no brainer for that. Beyond that, what it allows us to do is pass this information over to you as a sales rep. Again, if I'm in the home consulting with that homeowner, and I get this information once I complete that pre-qual that, "Hey, I know you've got a decent credit score between 721 and 740. Legally, we have to give you a little bit of a range, not the exact number, but I know that you're going to be a little bit more rate sensitive, and it's going to be more of a conversation around cost of ownership."

Two, what we also do is we work a little different. You might only ask for seven grand. Let's just say you're doing that exact example with me and my exterior repaint. By doing that, I can say, "Hey, you asked for seven grand, Hearth also works within a range," so I can look at... or the app, excuse me, can look at my financial profile and say, "Hey, James, you asked for seven, but we know your profile can support in excess of 25, so we'll give you options up to $25,000." If you guys are in the home selling with somebody, they asked for seven, yet they're eligible for up to 25, and this is all pre-qual, guys. This is not like a, "Oh, you might be..."

No, it's, "We've looked at your profile, and we know that you can pay back something at that 25K mark." Like you mentioned, something psychologically shifts when you get that person thinking about payments. The same thing happens when I start giving you options in excess of what you budgeted. Knowing that I have $25,000 available, I can go to Brandon and say, "Hey, Brandon, you know what, you asked for seven. We got you up to 25." The good thing is we got a ton of options. Now, I always joke about this with people. It's one of the biggest faux pas in all of home improvement, whether you're doing painting or literally any other task or job in a home.

Number one is they always go, "Well, I don't want to offer financing because my customers never ask for it." That's because they didn't invite you into their home to solve their financial woes. They didn't. They invited you into their home to talk about painting. That's it. If you don't offer it, they don't know that you offer it. It's just a fact, so when you bring things like this up, a, it sets you apart from the other person, but what it also allows me to do is focus on solving their pain with product. That is the only way you are going to overcome any objection whatsoever.

It's not that, "Hey, I got your payment this low per month." It's, "This is the work that we can do to solve the pain, which is the reason why you invited a random stranger like me into your home in the first place. You didn't invite me here to have a conversation. You invited me here to get an understanding of what I can do to make your house more beautiful, period." That's it. This is nothing other than a vessel to get you there. [crosstalk 00:20:24]. Go ahead.

Brandon Lewis:
Well, in that particular objection, I mean, they never asked you, "Are your painter's background checked or drugged tested?" They never asked you if you offer warranties or guarantees. They never asked you to look at a bunch of social proof. They never asked you a whole litany of questions, but it is your responsibility to bring those up in conversations before, during and after the sale, and to provide evidence that you meet those criteria, and so so much of the selling process should not be driven by, led by, nor will it ever by the client. That is the responsibility of the entrepreneur who's trying to make the sale.

James Waite:
1,000% agree. Again, going back to this, this is one of the main reasons why we are so different is you guys have the tool at your fingertips in real time to go back and say, "Hey, you know what, you asked for seven, we can get you up to 25." Psychologically, again, going back, what that allows that person to do is focus on the 25 number, and they totally forget the seven. They might end up spending $8,000, $9,000, $10,000 with you. In their mind, they're not looking at that going, "Wow, Brandon up sold me three grand." No. What they're looking at is going, "Wow, I'm so frugal because I didn't spend all of the money that I was approved for. I came in 15K under what I had available."

Well, in reality, you did upsell them. That is one of the main reasons why it's so easy for you guys to increase the average ticket size is because you have options, and they know it. How do we do that? It's super easy. Again, the technology that Brandon alluded to, we made so that it was absolutely dummy proof, not just for any of you guys to be using in the field, but also for your customers to interact with. Anything that you guys use or bring into the home becomes a direct representation of your brand, so we make it as easy as possible. This is as simple as it is for you guys. If I run an appointment, and don't close it on site, and let's just say they call me back, and I need financing.

Cool. I can do this at my home office. I can even do this before the appointment is even run, "Hey, we're going to pre-qual you before we drive an hour to run that lead," or I can use it on my phone. It doesn't matter if it's an android or an iPhone or my tablet if you're using either one. It works on literally any device or computer. First thing is I can send it to somebody. Like I said, before I run the lead or even after I run the lead, all I have to do is click on offer financing. Put in that customer's info. Typically, we say add a little personal note. Anything that you do that personalizes that experience increases the likelihood of conversion. It does.

It could be something as simple as, "Hope your kid feels better, or thanks for letting me know not to open the gate because the dog is going to bite me." Any of those little things allow me to just better connect with the customer. This is a direct invite for them to go pre-qual. That's it. I can text or email it to it, or email it to that customer. I ignore emails all the time, guys. I have 30 unread emails in my inbox. I have zero unread text messages. This allows you to really make sure that that person gets it and does something with it.

This is where it takes you. Again, this is branded as your organization. Whatever your logo is, whatever your company name is, brand it. Not us. You. This, when we say two minutes or less, two minutes as if someone types like this, guys. "This form is so easy to use. I can fill this thing out in 30 seconds." If you're even remotely tech savvy, you can. It's like following a little ball on the screen for a sing along. They put in all their customer details, et cetera. They hit agree, and at that point, voila, "Hey, congratulations, Brandon, you were pre-qualed for up to 10,900." I only asked for 10, got extra funds.

James Waite:
That could be the difference-

Brandon Lewis:
Guys, I hope that you're paying attention. If you've watched the GIF on the screen here, this is real easy. I mean, it's super easy. This is not fill out a piece of paper, scan it in, have somebody call them back. It's instantaneous. They can start making decisions and visualizing things immediately. Financing five, 10 years ago were challenging. A lot of people were doing it. This is not anything new. This is not cutting edge to offer financing, but the way that Hearth is allowing you to do it with their current setup without any dealer fees and with all of the technology, that really takes the work off of your plate, and puts it in the hands of the client is a heck of a lot easier.

James Waite:
Absolutely. The nice thing about it is every single one of the offers that I'm eligible for instantaneously pops up. If I need to change the dollar amount, I can do that. It's actually easier to see that using the app. I'll show you this. The majority of the selling that you guys are going to be doing is face to face. They're going to invite you into their home. You're going to be literally walking around going, "Tell me about your vision. Show me exactly what you're looking to do." Oftentimes, you guys are not referred to as sales reps. You're design consultants or whatever it might be that your title is. That's for a reason. You're doing this as a more consultative approach, so do it alongside them.

Literally, you can pull it up. At that point, it says hand them the device, and they fill out their details. Same thing, it's all branded as your organization. You can breeze through all of this. If someone has poor credit, add a co-borrower, all right? Put in the amount that you need. The other nice thing is you don't have to be exact. Oftentimes, when you're exact, that is cementing that number into that person's head, and it's really difficult to upsell them, because that's the number they see is just, "That's what I'm getting." If you round up and say, "Hey, you know what, it pre-quals you for a range." As long as I explained to them how that pre-qual works, round up.

At that point, voila, congrats, you were pre-qualified. Here's your options. Again, it's that simple. It'll always bring the lowest cost of ownership to the surface, and if I need to, it'll also show me we have a 0% option. That 0% option for more of your affluent borrowers, it's like into the same thing as if you're to walk into a Home Depot, buy a bunch of stuff, and I go, "Hey, you know what, you can get six to 18 months interest free on that, say, 5,000, 10,000, whatever dollar purchase if you open up a Home Depot credit card." We just did a soft pull, so we can see what kind of line of credit they can get through a card provider.

It's the same exact concept. Again, if you have some of those more affluent borrowers that are like, "Oh, yeah, I offer financing, but they never accept it, because they don't need it." Well, if I had the opportunity to take 0% to pay that over six to 18 months, I'm going to do that all day long, because I have to make minimum payments on something versus maybe pulling it out of my brokerage, which in 2020 yielded 24%. Why would I do that? It's a lot less expensive for me to borrow than to use my own money. If at the end of it I don't want to keep that credit card, I'm done. Cut it up. It doesn't matter.

There's zero prepayment penalty on any loan or credit card that we offer. Like I said, anything that they're eligible for will show up on screen. It's easy for them to identify exactly what they want, and if for some reason you're taking that more consultative approach, like Brandon said, and selling them on a payment, it's also super easy for me to say, "Well, hey, let's play around with some different options. If we do this room, this room and this room, that's how much it's going to be. Change the loan amount. Here you go. Your monthly payment could be as low as X per month. But if we did this room, that room, that room, and we do a bunch of this other stuff, we could get it as low as this."

If someone's looking at it going, "All right, if I have 1,000 extra dollars, it might be the difference of something like $40, $50 a month, or $40 a month, or $20 a month, or whatever it might be, that allows you guys to put that in some relative term. You're like, "Look, we can do two extra rooms, make your house look like a million bucks for the cost of literally three burritos a month." If you're eligible to do that or able to do that, it becomes a no brainer to that customer. They look at it and go, "Oh, cool. Well, why wouldn't I?"

Brandon Lewis:
We need to be mentally engaged when you sell people. So often, folks, they go through the motions, and just luck when you need to pay attention, when you're painting something that's very tricky, or that if it goes wrong, you're going to have to redo it. When you're out there in front of a client, you need to be mentally engaged, and this is one of those areas where it pays you to do so.

James Waite:
Absolutely, and confidence just radiates, especially when you present them with these options, and you show them, "Hey, look, the difference of you doing this, this and this, plus that room, it's going to make the space. Granted it's going to look like a million bucks no matter what we do, but I think if you could just get everything done at once, it's a lot less expensive for me to bring the labor out today and get it all done, specially with rising material costs. Might as well lock that in now than push that off for a little bit longer." That's another way that you guys can start layering this into that pitch, but all somebody has to do, like I mentioned, whether they're doing the 0% option or whether they're using just traditional loans that we have, all they got to do is click on that option, and they can complete everything that they need to while they're in the home with you.

These loans fund in as little as 24 to 72 hours. Again, by that time, it would take you to go buy the paint, allocate the install team or the actual painters to that job site. You could have your money in cash upfront ready to rock. Like I said, the 0% options is an add-on, but it's $199 for unlimited offers throughout the year. Again, for anyone, when you start talking about ROI, one deal, you're more than sold, and you more than have your return on investment. This, especially in the price point that painters typically operate for average tickets, we've seen great success using this, especially in the painting world, so note to self.

All right, moving on, the other thing you have, you're always going to run into those individuals who are like, "Don't touch my credit. I don't care what you say. Don't touch it. They like to run through a lot of hypothetical ideas. They're not sold on something of that. Trust is not built up high enough yet. Cool. We've got a financing calculator. It's available on your computer or on any one of your phones or tablets. This is a really cool way to convey the what-if situations without having to take them down that more formal pre-qual. This is all available at your fingertips. It's pretty basic.

Beyond that, you guys, this is another one of the pieces that set us apart. You have to understand and track and know your customers, where they're at at any moment in time. Not knowing where your customer is is also a direct reflection of your ability to work with them. They're going to look at that and go, "Well, you don't know what I'm doing right now." It doesn't really speak so well to you and your customer interaction or your success, so we built it. Anytime someone interacts with you whatsoever when it comes to financing, whether they were sent the form, whether they did something with it, or even if they take out a loan or a credit card, you'll know exactly what they've done at any given time literally with one click.

All I have to do is pull up either my computer or my phone, and I can see where anyone is at. If we send them that pre-qual form, cool. I not only know if you received it. I know if you opened it, and I know if you started it. Again, if I didn't sell that person the first time I was in their house, cool. "Hey, Jonathan, I sent you that thing. You opened it. You started it, but you didn't finish it. What's up? Tell me where you're at." Beyond that, you can also see if things get denied. This is super important, especially, we've had customers that have pretty broad service areas.

One of the things that they like to do is pre qual customers if they in fact have to drive a decent distance to go run the lead. If that's the case, cool, I can pre qual you and see if it's even worth my time. If it's not, I can call you up and say, "Hey, Joy, you know what, we weren't able to get you options. Let's talk a little bit more directly about budgets. Have you thought about how you're going to do this?" "Oh yeah, I went through a bad divorce. I'll just pay cash." "Cool. I'll see you in an hour," or, "Hey, reapply with a co-borrower, then we can come back in and actually do something."

If someone gets pre-qualed, I already showed you this, you guys, use this in your pitch. "You asked for seven, we got your 25. We got options. Let's see exactly what we want to do knowing that you can spend up to 25K. We don't have to go there unless you want to. But again, there's a massive difference between a $7,000 job, an $8,000 job and a $10,000 job. Let's go." Then the other thing you have to understand too is these loans are all funded directly to the customer, but the nice thing is it's converting that individual directly into a cash buyer. We alert you the second that those funds post so that you can collect immediate upfront payment, period.

You'll know when that money posts before that customer typically does. We'll send you alerts. We'll send you an email. The other thing is they're agreeing to a project intent agreement that says, "There's no obligation for me to see the rates, but if I borrow these funds, in effect, I am agreeing to do the job with you." The knee jerk reaction that we always get, and keep in mind, we've cut well north of 12,000 home improvement professionals as members of Hearth, that's businesses, not individuals. The knee jerk reaction with that is always, "Oh my god, they're going to take the money, and they're going to go to Vegas."

No. Guys, we originate hundreds of millions of dollars in loans a year. It doesn't really happen. Again, your process is your value. Same thing with any of the other terms and conditions. It feels very formal, and people don't take the money in. This just allows you to get a hold of your cash flows early, get that money back in your business so that you're not overextending yourself with any material purchases, allocating labor, and more importantly, being able to put that money back to work for additional marketing and resources. That's one of the other cool things about the tracking.

Brandon Lewis:
Well, and if you think, "Well, I'm busy, and this is just one more thing to manage," for many of you out there, number one, it's worth managing. Some things are worth managing. If it helps close the sale, that's high-dollar work. That's not low-dollar work. For many of the folks that are watching this today, you've got an administrative assistant or someone who helps you with commercial invoicing, answering the phone, et cetera. This is brain dead simple and easy. You can put this on a daily or weekly checklist for them to go in and monitor, and when there's some change, the individual in your office can administratively follow up on your behalf, or shoot you an email or whatever.

Brandon Lewis:
If you don't ever want to log into it, I mean, if you don't do it, but someone else does, it's automated.

James Waite:
It is. It'll fire off alerts anytime there's a change in someone's status. If someone goes from not completing their pre-qual to completing their pre-qual, boom, "Hey, Brandon has been pre-qualed for X amount of dollars."

Brandon Lewis:
Excellent.

James Waite:
There's alerts that happen automated throughout, and then more importantly, what we did is we knew that there were other tools that need to be baked in in order for especially some of the smaller owner operator organizations to feel and look like some of the juggernauts that we work with, because honestly, that could be the difference between you winning the deal or not is just, "How much do you have a process that is comfortable to me as the homeowner and purchaser?" We built in a payments tool, right? Same thing as financing, I can send you a digital payment request that allows me to remotely pay or in person pay with ACH debit or credit.
:
Again, a lot of people go, "Well, I just collect the paper check." Guys, I'm a homeowner, and late 30s, "millennial." I haven't written a check in 10 years. If you ask me to dig out my checkbook, that's an inconvenience to me that seems archaic, because everything I buy is on Amazon. I walk into a store. I'm tapping my phone to pay with Apple Pay or with Google Pay or whatever it is. Again, this allows you to look and feel like a juggernaut, and it's all included in the membership. There's no additional cost aside from just the processing fees. It's simple.

James Waite:
With one click, same thing. I can send and request payments. It also syncs with QuickBooks, you guys. It basically allows you guys to keep your books incredibly clean, and not have to worry about all the admin nightmare every time you reconcile per quarter.

Brandon Lewis:
Man, that makes it really easy to... I mean, this is something that honestly, you could be able to set up on an administrative standpoint, and even get your painters to collect in the field. A lot of our members currently use applications of one variety or another to manage projects rather and communicate with their crew leaders. This could be another part of your closeout checklist for wrapping up a job for those who don't use paper checks, prefer to use credit card or some other method of payment.

The rule of thumb is just make it easy for your customers. The better the experience, even if you're incurring some sort credit card fee or something like that, which in reality in certain states, you can actually pass that on to the customer, most likely, you're going to be already accounting for that in your pricing model as well. Whatever you make easy for your customer typically equates to things like referrals and high reviews as well. You can create custom invoices. I'm going to breeze through this a little bit because honestly, this is one of those things you guys can dive into later on, but it's all available on the member page through the Painters Academy.

This is your customer experience. They basically get a digital ask, "Hey, Brandon, pay up. We painted your house, or we're about to paint your house." They open it up and it's your invoice with your name and company with a scope of work written directly on it. When I pay, voila, it gives me the three different options, credit card, debit or ACH. Pick your poison. Then at the end of that, if anyone goes overdue or pass you on any of these, same thing like Brandon said, it's automated. They'll get reminders, "Hey, you forgot to pay. Pay up." If they do give you that proverbial duffle bag full of cash or a paper check, I can still send a digital request and mark it as collected so that I at least have that line item in my accounting software, and I don't have to go manage two different processes.

This just allows you to keep it super clean. Honestly, your accountants will thank us. Beyond that, you can track everything, same as you could on the financing side, who I sent it to, who paid, who did not, everything. Then lastly, you guys, you have to have a customer success team that's ready and available at any given time, and the fact that we have a partnership with the Painters Academy means that you guys have access to a dedicated individual or a dedicated team that's been trained on how you typically operate your businesses, that knows the relationship between us and the Painters Academy, and then beyond that, you guys get to go to the front of the line.

It's just another one of those perks that we've developed, knowing that if you don't have the support in the field, you don't always feel confident enough to offer this to anyone and everyone. We did that. Any technical issues, any changes or setup or additional training that you guys need, we can even go as far as let's just say you had an instance where a homeowner was like, "I applied, and I thought I included all the necessary paperwork, et cetera, but I haven't been funded, and it's going on 72 hours." We'll call that home loan for you, and actually take care of that stuff, so you don't have to. You guys are painters, not bankers.

Brandon Lewis:
That is a huge benefit, and you've outlined a number of things that for a very small price and a little bit of education and training can allow people to get a lot more benefits. Talk a little bit about how people can get started.

James Waite:
Again, pretty simple. You guys, we, again, set all this stuff up directly with the Painters Academy. Again, it's paintersacademy.com/finance. We have a dedicated page that's linked in there that shows you not only all the nuances and details of our program, but it is also that direct branded page. Brandon and his organization have allowed us to work with you guys to give you actually preferred pricing. Same thing as we go through any of this stuff. You guys, because of your relationship with Painters Academy, get access to this, whereas others don't, so easiest way to get started is that paintersacademy.com/finance. It is, Brandon, correct, this is going to be linked in the member portal as well?

Brandon Lewis:
In closing, what I would tell you guys is you're crazy. To put yourself in front of a client 100, 200, 300, 1,000 times a year per salesperson in many of your organizations, and to know full well that every time you get in front of them, you're going to close at 17% to 18% lower rates, and that your transaction sizes are going to be lower, and that some jobs will be lost entirely, which means that you pay the marketing expense of generating the lead and the labor of trying to sell the job and all the administrative follow up that goes in knowing that a certain percentage of those won't close, and knowing that your gross profits are going to be lower on every transaction and knowing that you're now going to have to go see more people and paint more projects to make the same amount of money in a time right now where labor is scarce as we record this.

Brandon Lewis:
Every competitive advantage and edge that you can get, you need to have. Finally, we don't know what the economy is going to do moving forward. They have spent a lot of money, a lot of your money, and they continue to spend it. We know that inflation is climbing at unprecedented rates, so you need to do everything you can to protect your income, and this is just one of those things. James, I'll let you have the last word, buddy.

I think I'll leave you guys with just really three main statistics. The first one, like you mentioned, is if you think you're the only one providing them an estimate, you're kidding yourself, all right? One of the industry statistics that we've seen is that 92% of homeowners get more than one estimate for a job, 92%. All right, that's at least two quotes. Beyond that, it goes up. There's even... Most people are being told again and again and again that, "Hey, get three or four quotes. Do this. Do that." It's literally every single organization that you hear the Angie's List that modernizes all of these companies, home advisor.

They're saying, "Three plus estimates," mostly because they're selling that lead three to four times, but it's predominantly something they use in homeowner facing marketing. What you guys need to do is you need to set yourself apart from anyone that's going to be quoting in front of her behind you, and the way you do that is through your experience. Give them options. Use data like how much they qualify for to educate them. The more that they can connect with you, you don't have to be the cheapest job. You don't. You just have to evoke or incite the right emotions to build the trust, to get them to want to do the job with you.

Then more importantly, give them the options they need to pay for the job. We work again with 12,000 plus different organizations, and that grows by almost 500 to 1,000 new customers per month for us. The reason being is because financing for painting contractors works. It does. Again, think about how this would fit into your org. You have a tool that can literally work with any sales process, whether you bring it forward or whether you do it at the very end, it doesn't matter. This will at least give you that pain-free approach to offering people affordable financing options. You know what, guys, at the end of the day, if they say, "You know what, I'll just pay you cash," that's an objection you don't have to overcome.

At that point, just send them a payment request, and go do the job, but giving them the options allows them to see exactly what could be. Honestly, hope is the biggest and most exciting thing that you can sell them beyond that vision of the home they've always dreamed of. Again, I'll leave it at that. We're super grateful that you invited us on today to talk through this. We're constantly making changes, and updating. I know this won't be the last time we do this, but really appreciate you guys bringing us on. Any questions that you guys have whatsoever, again, paintersacademy.com/finance.

James Waite:
We're always there to show you guys a demo, see if it's a fit. Again, any of the Painters Academy's members can absolutely make sure that you guys are eligible for the benefits to the program that we have in the relationship. Thanks again, Brandon. I really appreciate it.

Brandon Lewis:
Well, James, thanks for being here. Guys, do go to paintersacademy.com/finance if you do not currently offer financing or if you're unhappy with the provider you have because of the dealer fees. Again, that's paintersacademy.com/finance. Until next time, I'm Brandon Lewis with the Painters Academy, signing off.

 

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