How to Use Financing to Adapt to the Modern Consumer

Podcast: Play in new window | Download

Prices of everyday goods are rising. That means your average customer has less cash to spare when it comes to big purchases for their homes. How can you offer a solution when the only thing standing in the way of a customer and their new system is the price?

This week on Cracking the Code, Contractor University faculty member Russ Horrocks explains how business owners can address the impacts of sweeping economic trends by offering financing to homeowners to help them afford your services.

Audio Transcription (in Beta)

You know the times they really are a changing but financing can help with all these changes and to manage it to your benefit Learn all about it on today’s show

Okay. Well, let’s get started with today’s content. We’ve got in the house today the one and only mr Russ horrocks to show you how to navigate through changing times using financing. Take it away russ The reason that we’re having this conversation a big part of this, uh, the purpose of this is change You know, we’re in an incredibly changing world right now.

Uh, for me, looking back on my career, I can’t think of a time since probably 2007, 2008, where I’ve seen so much change in the marketplace from customer’s perspective, from how customers are making decisions. The information they’re getting and also the changes happening, of course, with pricing. And so for me this year, so grateful.

I’m out there. I’m running calls every week with clients. I’m out there experiencing it, seeing the changes in real life, adapting myself to those changes and trying to make sure I’m embracing those changes. And so, um, one of the things that’s changed is the cost of things. It’s incredible what’s happened with the cost of things, you know We used to as an industry experience about a six to ten percent price increase annually the last two years It’s been closer to thirty percent.

Uh, and it’s not just our industry. Thankfully. It’s everything And if it’s just our industry, that would be a really big problem. But the good thing is our customers Are being conditioned from other areas as well. They’re seeing everything cost more money. So it’s no surprise I think in the in the in the home When I talk to people about price conditioning kind of bring up the the conversation of money and what’s been going on Most people say yeah Everything’s like that right now and they usually give me an example Something they just purchased that was so much more Then what it used to be.

So luckily we have the entire economy supporting this particular change of the cost of things. Things just cost more and everybody’s being conditioned and every aspect of their life. So the good thing we have the support from the economy that’s helping us do that. We’re not isolating that and also the availability of things that’s that’s having a big impact.

Certain things are not available. Uh, I went to with the, without the salesman with one of my clients a few weeks ago, and we have a price book with multiple levels of consideration. And I had to say to the customer, you know, these three are available and these four are not available. Uh, we just can’t get them right now.

So, you know, obviously we want to talk about that being part of the change and how financing might impact that. But I also want to talk about, um, access to information, how customers Get information now is different than it’s ever been. You know, we are a People that is so connected with information information is no longer a commodity.

It’s now a commodity It’s no longer something special and unique, you know in the old days when people didn’t have access to information They had to trust the people that they called out in today’s world. They have access to so much information They trust themselves more than they trust us. So we’ll talk about how to Recognize that how to elevate our game to make sure we’re still impacting people, still showing them how to buy where value is coming from and how to make these decisions to give what they paid for subscription pay as you go.

Society. You know, you think about our world today. I’m sure you’re all like me. Everything we do subscription based. You can’t buy software anymore. You can’t buy phones anymore. You can’t, you know, there’s so many things you just can’t buy anymore. You have to pay to use them. Uh, there’s some, you know, pros and cons to that.

The cons is you’re going to pay in perpetuity. The pros is you always get the latest and greatest. You get access to all the updates. So there’s some real benefits to the pay as you play, pay to play and pay as you go. But it’s something that people are just used to doing. Many of you out there understand and have converted your entire, um, maintenance program to be perpetual.

So there’s no renewal date. Uh, people just get to get on the program pay a monthly fee and they get all the benefits of your service program, um, all the benefit of your maintenance program. And that makes it a lot easier because we’re not having to ask for a lot of money for renewal. People are just looking to maintain the monthly payment.

They get the full benefits of it. So, you know that that burden of entry into the maintenance program is eased with the idea of flexible payment plans with the perpetuity, uh, the monthly payment. So Yeah, that’s kind of our subscriber or a society mentality right now. And how does financing play into that?

That’s the psychology that’s taking place that’s so prevalent right now in our world. Um, so we’re going to kind of explore that as well. Uh, but the reason we’re exploring these things is because these change requires us to do one of two things. We ignore them or we embrace them. And if we embrace them, we have to elevate our game.

I, I used to be kind of frustrated when, when I saw the markets change and things change in the field because what I was doing would no longer work. But now I, I love when that happens because every time I notice a change, In the market or change in what’s happening. I get to elevate my craft. I get to do what I do better I get to study research practice and find a new way to elevate and become a better professional So we want to embrace what’s changing out there.

We want to recognize it as change So that we can just continue to grow ourselves. You’ve all probably heard this There is no maintaining in business. You’re growing or dying. It’s the same thing with your personal success You’re either growing or you’re dying. What you did yesterday was based on the conditions of yesterday.

What you need to do today will have to be based upon the conditions of today. And so we need to completely embrace change, expect change. I have, uh, uh, uh, Salesperson contacted me about a month ago and he said he was frustrated all these changing, uh, changes were happening in this company Changing changes were happening in this market And I let him kind of get it all out because I think that’s what he did more than anything else And then I said look this is good.

This is amazing. This is I when what you shared with me I saw so much opportunity for growth. Why don’t we focus on that? Let’s see what we can do And so we started to drill down on the different he had the topics and worked on it and showed him different things he could do, different ways he could approach it.

And he went back out there, followed up a couple of weeks with him and he was having a great time. And he had made those changes and saw the success that came with it. And he was having a, uh, an incredible time and enjoying what he was doing. So that, that mindset of change, don’t resist it, expect it.

Revel in it, enjoy it, and look for the opportunity in it, and you’re going to be fine. It’s really the mental game that we have to work so hard to play, and that’s the proper mental mindset if you’re going to get this right. At the same time, though, we want to make sure we’re not ignoring the things that have to stay the same.

There’s so many things that aren’t changing. Um, you know, I remember back in the beginning of COVID, people were talking about this is the new way of doing things, virtual reality, you know, sending people information beforehand. Everyone thought that was going to be the way it was going to change. I never thought that.

I never, I knew nothing could replace the importance of face to face. Nothing replaced, you know, looking someone in the eyes and hearing their stories to why they’re different and why they’re worth it. And I, and I think that’s not changing how people make decisions and choices. Uh, that’s been going on for thousands of years and will continue, you know, how people build trusting relationships, how people value the information that you give them based upon the position of trust that you worked so hard to build.

Uh, the informational content is only as valuable as the environment in which we deliver it. So I really believe there’s certain things that are just not changing. And I know that because again, I get to run calls every week. And I get to verify that and I get to explore that. So it’s kind of an interesting approach that we have to take in our industry.

It’s incredible embracing of change. Recognizing it, enjoying it, elevating our game, but also this important look of fundamentals, making sure we’re not deviating from just how to connect with people, how to allow people to feel safe with what we share with them, how to show people and teach people where value really comes from, that is not changing.

In fact, it’s becoming more important now than ever because while people do have access to so much information, it’s not all good. If you look at the internet and you google how to buy an air conditioner And you’re only going to find what people pay for you to find opinion and marketing And the good information is buried deep within the internet.

No one’s finding it because no one’s doing any kind of optimization No one’s paying for you to see it. So, you know information gathering while it’s it’s out there and readily available It’s often not good information or misleading information So we want to make sure that we’re embracing but we’re also holding firm to the things that work And we’re not throwing those things out with with the changes that are being made But these changes are changing how we have to approach it financing in my mind has always been a Critical skill to have I think that’s kind of the funny thing.

Most people don’t think of financing as a skill set It’s something they introduce after the fact something that they might introduce When they need to be competitive or when the customer is shocked by the price that is not what financing is Financing is a way of thinking a way of doing It’s a way of going to the market with skills and technique and the understanding of timing and strategy.

And it’s incorporated all throughout our call and all throughout our time with the customer. And when you understand financing as a skill, it’s one of the most powerful and simple ways you can improve your performance. You can do so much more when you start to understand as a skill before we get into that those skills I wanted to kind of briefly talk about mindset.

I’m not going to go deep into mindset whether it’s good or bad Eja has a lot of great videos on mindset. I encourage you to watch them You can’t convince me. It’s the most important thing. It is the most important thing Most of the calls I have with salespeople all over the country it deals with this It deals with their mind trying to interpret and trying to Navigate through the difficulty the difficult life of being a salesperson or being a technician And so mindset is vital put the time in get good at that.

It’s a skill Um, listen to these great speakers that egai has about mindset and do it But I want to talk about a different mindset today. Not just good or bad I’m going to assume that you already have a great mindset. I’m going to assume that you’ve matured professionally Recognize how important it was Put the time and work in.

You’ve hacked your brain. You’ve created good habits. You have the ability to keep yourself in a great mental position at all times. I’m going to assume that you’ve already done the work and that’s where you’re operating from. But I want to talk about an operational mindset. So this goes to me above and beyond, you know, whether it’s a good or a bad mindset.

I’m going to assume you’ve got the good mindset figured out. You want to be at your best all times. And then this is a, to me, a different level of mindset. And what I mean by operational mindset is what is your thought process about what you do, how you do it, when you do it and the way you do it. And that opera operational mindset, uh, is very different, even with people that have a positive mindset, they’re going to find this operational mindset goes a little bit deeper.

And here’s what I mean by that. I find that most people I work with, whether they’ve been doing this for. Days or years or decades I find that they do all that they know but not all that they can And a lot of that is because of their operational mindset. They they have this mindset of just enough, you know Uh, that would be probably the entry level of operational mindset is functionality enough to get by minimal, no extras, not really interested in exceeding the positional expectations, not really driven to go above and beyond, would never put my free time into my craft.

That’s the, that’s the base level of operational mindset functionality. And I think, unfortunately, that dominates what I see out there. I see just a world full of individuals that are happy just to get a paycheck, not get fired. There’s some level of pride there. But you see no effort beyond that. Um, and if that’s you, that’s fine.

I can’t change who you are, but it’s not going to take you any place special, unique, or exciting. You’re not going to grow. You’re not going to feel the pride of accomplishment, achievement, and constant growth. The next level of operational mindset would be performance. Now, the performance based person says, you know what?

I do want to go above and beyond. I take great pride in what I do. I’ll put extra effort in. I’ll watch a YouTube video this weekend, um, on a HVAC YouTuber that’s going to make me better, more capable to help my customers. I’ll watch EGA videos on how to become better. I’ll attend events. I’ll, I’ll, I’ll go through training.

I’ll, I’ll do my own research. You know, that, that’s a performance based mindset that accomplishment and growth dominates the mindset and they’re always growing. As my business partner, Drew Cameron says, they’re always sucking by their own standards. And I think that’s starting to get into a really nice place of operational mindset where you’re going to find a lot of growth, a lot of opportunity.

People in your life will see and recognize that effort, reward you for that effort. The highest level of operational mindset I like to talk about is just an optimal. And that’s where you’re driven in a very unique way. You’re driven to want to be the best of the best, um, almost obsessive drive to succeed.

I don’t mean that in a bad way. Um, I would probably say I have an obsessive mindset to succeed, uh, from the very beginning, uh, going back to when I was a kid, I lucky enough to have a father that taught me that. If something’s worth doing, it had to be done right. And that’s just kind of how you put your stamp on the world and who you are.

So I’ve never really ever worked to a wage or an expectation. I always worked to my own. I always worked to try to do the best I could with what I was given. And if I was going to do it, do the best I can. And the optimal mindset is really, really fun as a coach and a trainer to run into. Because that’s something you can do something really special with.

Because that person will put in the time and the work to make themselves the best of the best, because it’s important to them. That internal motivation is driving them. Again, I’m not suggesting be obsessive and ignore your, your balance in your life, because balance is incredibly important. We have to be, as humans, balanced mentally, emotionally, physically, professionally, personally, we have to be balanced.

But everyone’s balance point is very different. I know some salespeople where, you know, after, you know, they get three calls, they have a complete meltdown and they can’t function and other salespeople, they can handle at the highest level four or five calls and that’s where they, they tend to kind of thrive.

So we all have a different balance point. You have to figure out what is yours and then don’t compare yourself to other people, you know, make sure that you’re only comparing to your own growth and your own journey and that optimal mindset will carry you a long ways. And here’s the cool thing. Yeah. If you have a performance or an optimum based mindset, you’re going to see constant growth and accomplishment.

It’s going to feel really amazing. Life’s about fulfillment, not just simply about functionality, bare minimum and getting by and fulfillment comes from accomplishment and growth. To think about what can you do to incorporate these concepts and principles to try to perform at your highest level and try to challenge yourself to become good and better with these concepts and go out there and see the difference that it can make.

I’d like to challenge you to do that, to think of it that way, and then plan it out and talk about how you might incorporate this in your life and how you might approach it and how you might go out and actually achieve it. And then it gets real fun. You know, as a coach, that’s the funnest phone call I get is from someone calling me back and saying, Hey, I left your class or I work with you and here’s what I did And and just to hear the joy and excitement in their voice That to me is one of the most rewarding things about what I get to do Is that I now see somebody that is not just earning a paycheck They’re doing something that I actually truly love and they’ve brought their passion with passion with them and that passions produce incredible results So I bring this up not to spend a lot of time on it But I do think it’s important and it’s important to get in the operational mindset You To adapt concepts, ideas, spend the time to work, to develop this technique so that you can be way better than your competition.

I didn’t mention that, but I probably should have one of the big changes too, is the competition. There has been a lot of consolidation going on in the last year Um reminiscent of the 90s And the consolidation is love, you know bringing a level of professionalism to your competitors They may have been good companies But now they’ve been consolidated by a better company and that company’s giving them operational practices and approaches and training And they’re raising their game.

So as your competition is changing and raising their game. You have to raise As well if you don’t raise equally as they are they’re going to catch you and they’re going to pass you by And so we’ve got to understand that in our markets You’ve got to stay ahead of the competition And you can only do that with this optimal based mindset and this growth based mindset And if you do that, you can always stay ahead of them.

All right, so if you think about change, uh, How you think about financing or if you change the way you think about financing? It’ll change how you feel I’ve talked about that in past uh, broadcasts I’ve done with TFAR, thoughts, feelings, actions, and results. If you change the way you feel about fin or think about financing, it’ll change the way you feel.

And those feelings will motivate what you do. It’ll change the way you behave. And if you change the way you behave, you’re going to see that you get something different. You’re going to see the results change as well. And so I promise you, if you take some of these concepts we talked about, approaches, techniques, skills, and work on them, you’re going to see a big difference.

And what you get out there in your marketplace and the advantage you have over your competition. So be willing to make the change, but it’s not just change in knowledge. It’s got to be change in skill. Learning requires a doing. You’ve got to go out and do it. You can’t just listen, say that’s interesting and walk away.

You’ve got to go out and practice it and be prepared to fail at it. Be prepared to prepare to mess up, you know, misstep and then come back, regroup and think, why did I feel so bad? Why did that not come across the way I wanted? Why didn’t I get the response that I wanted to give? And to be willing to practice it, keep working on it until you get it.

So let’s talk a little bit about why financing why financing is so important I’m going to explore some different angles and to me This is important because if we don’t understand the why behind something there’s no way that we can master it Mastery to me comes from the wise Uh early in my training career in the late 90s early 2000s Um, I became obsessed with the wise because I saw that was the key to mastering so I want to explore and take some time to Discuss why is financing so important from a few different angles?

And I think that will help fuel your effort and help point out how important this topic really is So making something valuable is not enough We also have to make it affordable and I noticed this earlier in my career when I worked hard to increase To increase the perception of value of me my company my offering If I didn’t work hard to also increase the perception of affordability.

I found at the end of the call. There’s a separation And that separation often caused in the customer saying to me, thank you. You’ve been terrific We’ve got a lot to think about could we get your card and it frustrated me I’m, like why is the call going so well, but yet i’m finding at the end I’m being told that they need to think about it.

They called me for a reason They called to succeed. They didn’t call to fail, you know, so what happened? What did I do to mess that up? And that kind of goes back if you read the book good to great it talks about how You know the top tier of leadership views the world, you know, a lot of mid level managers see the world through windows They’re always looking out past themselves looking out into the world And assigning reasons and blame for results where top cheerleaders don’t do that They see them the world and all they see is mirrors as they’re looking around They see mirrors and all they see is their own reflection and they focus on what can I be doing differently?

What could I be doing better? And I think as we look at um these concepts and ideas We have to look at what can we be doing differently? Uh, it’s not your market You It’s not the competitive nature of your competition. It’s not that they’re offering finance programs that you can’t compete with None of those reasons are valid.

Those are all just reasons we told ourselves as to why we’re not getting results that we want I call them salesman’s binkies. It’s their little binky that makes them feel comfortable and safe It’s the reason why they didn’t succeed allows them to go to the next call and feel like i’m, okay And there’s, you know, there’s some valid reasons that exist, you know, sales, a salesperson’s job is difficult.

There’s a very emotional position and it’s really challenging. And you have to have a way to overcome failure, a way to overcome not getting the result that both you and the customer wanted. But the problem is it denies you the opportunity to grow. So if we keep assigning our failures to lead source, location, uh, type of, um, uh, you know, marketing, is it a market lead?

Is it a, is it a tech lead? Obviously that would be, you know, something that most of you guys want. Is it, uh, the, the, the zip code in the, in the city that you live in, where you feel like nobody there buys from your company, we have all these reasons. Is it a, you know, a landlord? Is it a house flipper? We have all these reasons why we think we failed, but none of them are valid.

They might be contributing, but they’re not. If you elevate your game and find a way to overcome them, you can. So, it’s not enough to make something valuable, you have to make it affordable. And I learned that difficult lesson early in my career. After I lost enough jobs, didn’t get enough jobs, I started to look in the mirror and say, What am I doing and what do I need to be doing differently?

And that’s when the real growth started happening. That’s when the change that was necessary started taking place. So here’s the thing to ask yourself. Can you ever guess who really needs financing? Think about it. And you go into home. Do you really have the ability to guess who would need or prefer financing?

And you and I both know the answer is no. Of course you can’t. You’ve all been if you’ve done this any amount of time you go into a home that appears to be in a very affluent home Um a high income bracket They seem to have a lot of stuff and at the end of the day They they say we need to finance it and they can’t get approved for anything we’ve also been that home where it’s a thousand square foot single story rambler that’s Very humble the car in the driveway is very humble It’s paid for and these people were blue collar workers their entire careers, but they’re financially rocks You They’re incredibly solid Excuse me And um, you know, they own their car.

They own their house. They have savings They have investments and they could afford anything. So we just never know and I think early in my career. I figured out Quit trying to figure it out You know, we don’t know so why even try? Because if you don’t offer financing, you can make a huge mistake.

Well, thank you so much, Russ. We really appreciate that amazing content, great advice, and we should all probably take it. Now listen, be sure and share this on Facebook. And if you’re not a member, I want you to click the link and sign up for a free trial. It’s a 30 day free trial. You get access to all of our content and I guarantee you, if you follow the advice, if you take the courses, you will take your company to new places, new amounts of success.

Well, folks, that’s our show for this week. We’ll see you next week. Until then, bye bye for now.