By Shawn Cadeau, Revenue Manager, Jobber
Before a project begins, the moment of truth is usually about funding. From major renovations to unexpected repairs, most jobs fail because the money just doesn’t work for the client. When a potential customer likes your business, trusts your quote, but just doesn’t have the funds to move forward, it can be a tough pill to swallow. This is just one reason why consumer financing, where people can pay for jobs based on monthly payments, is rapidly taking hold in the plumbing industry.
Based on a Jobber survey of 1,000 US adults (aged 25+) exploring financing trends among consumers and homeowners, here are three factors that are accelerating the use of consumer finance and the adoption of this offer by plumbers and other home service companies.
It’s been a whirlwind year for the plumbing industry. About a year ago, when many office buildings closed, plumbers made headlines as demand increased due to individuals spending more time at home resulting in clogged pipes and other issues. Fast forward to a year into the pandemic and once again, plumbers take center stage as they continue to help repair the damage caused by the historic Texas winter storm that left wreaking havoc on homes and buildings by freezing and bursting pipes.
While these are unique circumstances, they underscore the importance of homeowners having funds available to deal with unforeseen emergency repairs. Having that emergency fund to dip into is not a reality for many consumers. Nearly one in four homeowners in Jobber’s survey (24%) said they had less than $500 available for emergency home repairs, and 39% said they had $1,000 or less. In many cases, repairing a blocked drainage system can be difficult to afford at the moment.
It’s no surprise, then, that landlords are increasingly open to financing as a form of relief. In fact, 66% of respondents said they would be more likely to use monthly financing in situations requiring emergency work, such as fixing a burst pipe. When it comes to emergency repairs in this climate, allowing customers to pay in monthly installments can mean the difference between deciding to do a do-it-yourself do-it-yourself repair and having it done by a professional.
While many people have felt the pain of this historic crisis, those who have not are taking the opportunity to undertake new home improvement projects. Others dove into the boiling real estate market to buy homes that need updating. In both situations, existing and new homeowners are eager to get the work done as soon as possible. However, again, having the necessary funds can mean the difference between homeowners settling into a bathroom renovation or pursuing their dream renovation.
A majority of landlords (54%) in the Jobber survey said they postponed a real estate project due to a lack of funds. One in four (25%) have even considered borrowing from their 401,000 to complete a home improvement project. Sixty-three percent (63 percent) of homeowners in the same survey indicated that they would be willing to take on a more expensive project if there was a consumer financing option available to them. There is clearly a demand for these projects and easy financing offered by plumbing companies could be the key to unlocking these opportunities.
When it comes to consumer financing, younger respondents (25-34) indicated the most interest in this type of offering for a variety of reasons. It’s that group of tech-savvy homeowners who already depend on apps and websites for banking, investing, home lending and now see consumer finance as an extension of this FinTech wave. A consumer finance option built into a plumber’s online quote is a feature that enhances their customer experience. Combine that with a willingness to fund projects and it opens up strong possibilities for home service providers.
According to the Jobber survey, more than half (53%) of respondents (aged 25-34) put a home services project on a credit card so they could pay for it over time. Their desire for more payment options doesn’t stop there. A higher percentage expressed interest in consumer financing, with 80% of the age group saying they would choose one home service provider over another because they offered monthly financing. Millennial customers want options from their home service professionals, and they want them before the time it takes to find another contractor on the internet.
Stay ahead of the competition
The plumbing industry is extremely competitive and is becoming more so every day. Every edge is needed to stay ahead of the new competition. Staying ahead of the consumer finance trend positions plumbing companies to immediately start earning new jobs, while meeting the expectations of a young and growing population of homeowners.
If a plumbing company is unwilling to offer installment payments due to the risk of not being fully paid, there are simple solutions for this. With the right business management software, this offer is just a plug-in or additional feature that can be attached to quotes. Homeowners can apply for financing without any additional work from the plumbing company or the added risk of not getting paid. The plumbing company will be paid when they perform the service, while customers will have the benefit of paying over time. It’s a win-win that gives plumbers a head start on a trend that will soon become commonplace.
Shawn Cadeau is Chief Revenue Officer at Jobbeur, the leading provider of business management software that has helped small businesses deliver more than $15 billion in services, and growing, to more than 12 million homes. Cadeau is responsible for the company’s global growth strategy and leads the sales, marketing, business operations and customer success teams. He has 15 years of experience in C-level positions in high-growth technology companies