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Credit: How to upsell the customer every time

by Ken Ryan

Ken Weisbacher, owner of Carpetland Carpet One in Cincinnati, remembers the time when five-year financing terms were the norm in the flooring industry and provided the impetus for dealers to upsell consumers.

That sweet spot has been reduced to 12 months (on average) or 18 months during the economic downturn, according to Weisbacher and others, who noted the use of financing is still very important, albeit less prevalent than a few years ago.

The way to upsell customers through credit financing involves a myriad of steps, dealers say: good sales training, the right financing programs and great products to offer customers. FCNews spoke to several dealers who provided these tips:

1. Keep financing programs flexible.

Nebraska Furniture Mart (NFM), for one, has successfully rotated its financing programs, offering at times a “no down payment for 18 months” program for two weeks and then switching it up. “We’ll run different programs as well as different financing offers—24 months one week and then do something different the next week, so that the consumer doesn’t get used to the same old, same old,” said Gary Cissell, director of flooring. “It’s important to keep it fresh.” He noted 18 months with zero down and then equal payments from there is NFM’s most successful program.

Baker Bros., a six-store chain in the Phoenix metropolitan area, uses credit promotionally to tie into sale events, said Phil Koufidakis, president. “Usually we use 12-month, (sometimes more) no interest, which used to be no interest, no payments and was perceived as a better deal by the consumer.”

Sam Roberts, owner of Roberts Carpet & Fine Floors, an eight-store chain in Houston, said his company uses credit offers in many of its promotions but doesn’t generally make them the central offer. “I believe credit offers are less compelling in better goods. Usually the client is affluent and not interested in monthly payments. Credit is important to the occasional customer for us, and I think it is valuable to have in the arsenal.”

2. Focus on the flooring.

While consumers may be enticed by an offer of no money down, the real benefit, retailers say, is it allows the customer to buy a higher-end product she otherwise would not be able to afford. That’s the true benefit of financing and why successful dealers can upsell consumers with the right sales effort, according to Steve Boardman, president, MMM Carpets, Santa Clara, Calif.

“The reason for the deferred payment is people are really getting better-quality product,” he said. “That approach really flies, but it takes patience. The biggest regret customers have is they had to settle on product, when they wished they would have bought better floor. We are a Stainmaster Flooring Center, so we like to sell better carpet. Financing allows you to buy better carpet and spread out the payment over time, so it doesn’t hurt your budget.”

3. Romancing the customer.

Patience is a virtue for sales associates when it comes to upselling consumers via credit financing. “The sale is a process,” Boardman said. “You want to do what is best for the customer, to give her the best product with the latest technology, and she can achieve that with the opportunity of financing we give to her.”

Olga Robertson, president of the FCA Network alliance of floor covering dealers, said the financing issue “is something you bring up while you are talking about the product; it’s not the first thing you bring up. Along the way you may say to the consumer, ‘I know you have the money for this product but here you can defer payment; you can use ‘Other People’s Money’ for this purchase.’”

4. Closing the deal.

After spending 30 minutes, an hour—even two hours—with a consumer, the last thing a salesperson wants is to tell the customer to “think about it” and hope she returns. In many cases she won’t.

Nebraska Furniture Mart steps up its efforts just before a financing period is about to end, Cissell said. “If our salespeople have worked with customers who have shown interest, we will contact those people and sweeten the offer. We use the financing as the close. It’s been successful for us. We try to stimulate our sales through it.”

Boardman said MMM Carpets doesn’t want the customer to have to come back and look at samples another day; consequently, salespeople do what they can to take care of business that day. “We also like to get 10% down because if the customer puts down money, she has invested in the product. We don’t give customers extended terms and extended warranties they don’t need. The key is to qualify the person because financing won’t work unless you have a customer who is ready to purchase flooring; you take your time with her and tend to her needs.”

Closing the deal in a day doesn’t work for every dealer. Weisbacher said the extended downturn has made consumers cautious to spend money. As a result, they mull over purchasing options, often spending weeks and months before making a decision. “Sometimes it can take up to a year. We’ve had that situation here.”

5. Training, training, training.

Without a trained, educated sales force, upselling customers through credit financing would be an arduous task, especially in this economic climate. Indeed, it requires sales acumen along with finesse and patience, dealers say.

Among the tips for sales associates is not to talk about finance terms too early in the selling process, to instead go over the features and benefits of a product. “We don’t want to scare customers off too early in the process by throwing out credit terms,” Boardman said. “We have to really train our salespeople to take their time with the customer because we don’t want her to second guess the purchase, to have any doubts. Education is a continuous process.”