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Credit: The importance of offering financing to consumers

February 5/12, 2018: Volume 33, Issue 17

By Rose Burke


When consumers shop for big-ticket items such as new flooring, they are likely to use some kind of credit to make the purchase. What’s more, some credit experts believe people are far more compelled to commit to bigger purchases when they can see their payments broken down into monthly installments instead of seeing the total amount. For example, a $7,000 purchase might not be affordable for most people, but a $400 monthly payment can appear more manageable.

While it is important for retailers to consider offering credit terms to their consumers, it is also crucial they’re offering attractive financing that will actually bring people into their store. What makes credit terms attractive differs from dealer to dealer, industry members say.

“Our financing programs are available on all purchases in the showroom, not limited to just one display or manufacturer,” explained Keith Spano, president of Flooring America. “This gives our retail sales professional the ability to move a customer up and down through the trade-up process without fear of losing the favorable payment terms.”

Other retailers are providing their customers with several credit options in order to make them more attractive.

Ari Ziskin describes the credit terms at Mesa, Ariz.-based Flooring Inc., as transparent, saying, “Our goal is always to make the purchase process as easy and stress-free as possible. One way we do this is by offering several financing options. As a company offering high-value items, we believe this is incredibly important to both the customer experience and continued sales growth.”

When customers walk into a jewelry store or car dealership, they’re often provided with credit terms that lead them toward making a purchase, and flooring retailers should be no different. “Offering credit lets our customers know they can get the flooring they want on good terms, which opens the door to other parts of our business,” said Bob Pireu, president of Bob & Pete’s Floors, Canton, Ohio. “Customers know they are getting a competitive price, plus they can be comfortable with the quality of our services and installation.”

Other retailers have also learned to leverage consumer financing to their advantage. “We have always been a huge proponent of consumer credit financing and the benefits that come along with that,” said Eric Langan, president and owner, Carpetland USA (Langan Group), Davenport, Iowa. “This includes larger average tickets, reduced accounts receivables and differentiation among competitors.”

In addition to being a proven sales tool, credit is something customers have come to expect and is almost no longer an option, Spano said. “Retailers need to look at financing costs as a marketing cost and a cost of doing business in a competitive retail landscape.”

As a recognized sales technique, retailers who have trained their sales staff on the appeal of their credit terms have seen a significant increase in sales. “We’ve spent considerable time training our members and retail sales professionals to discuss financing early and often in the sales process.” Spano said. “Through our training and aggressive buy-downs for our members, we’ve seen our financed sales grow to three times that of the industry while also seeing our average ticket grow almost three times our average credit card sale.”

The most common credit terms offered by flooring retailers is 12-month financing. This breaks down payments into a few hundred dollars a month, but still, retailers hope to see more attractive credit terms for their customers in the future.

“Can you imagine advertising putting hardwood in your whole house for $149 a month?” said Adam Pace, CFO at Metro Floors Inc., Lancaster, Calif. “This would be possible if we had 48- or 60-month financing. It would be a huge boom for the industry. We can offer 36-month financing as it is now, but the cost to the dealer makes it a no-go. The manufacturers need to set-up their own credit unions, especially those that are multi-billion dollar companies.”

Synchrony Bank is a popular option for retailers seeking to offer appealing credit terms to their customers; they offer over 100 different kinds of credit cards and work with dozens of major retailers. With a specialty program specifically designed for flooring retailers, Synchrony  can offer solutions that other banks cannot.

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Credit: Financing options benefit retailers, consumers

October 9/16, 2017: Volume 32, Issue 9

By Lindsay Baillie


Screen Shot 2017-10-17 at 10.31.11 AMWith competition for the consumer’s disposable dollars heating up in the home improvement retail sector, more floor covering dealers are relying on credit programs to gain an advantage. These financing options not only provide consumers with more flexibility in making their purchases, but they also open the gateway to bigger tickets for floor covering retailers.

According to a recent study by Synchrony Financial—which offers credit programs for retailers and consumers—91% of flooring cardholders said financing made the purchase of big-ticket items more affordable. What’s more, 39% said they wouldn’t have made the purchase or would have gone to another merchant if financing was not available.

For dealers such as Greg Miller, president, Henry’s Floor Covering, Greencastle, Pa., offering credit to consumers is a no-brainer. The flooring store offers two credit options: six months and 12 months. “Our customers find with credit options they can upgrade to better products, do their complete project instead of having to do the project in phases and don’t have to rely completely on their savings. And, at the end of the project we’re paid in full.”

Those who choose to offer credit solutions have found the benefits are mutual for both consumers and retailers. Barrington Carpet, Akron, Ohio, offers its customers 12-month, no-interest credit options from both Mohawk and Shaw. Providing the shopper with various credit solutions, according to the company, helps close sales as well as bring customers into the showroom. “Offering credit is a must in attracting consumers into the flooring market,” said Craig Phillips, president. “Flooring dealers are in competition every day with other markets such as the furniture and electronic businesses. Those industries have traditionally used credit as a closing tool. During the national Shaw and Mohawk sales there are benefits for everyone—longer payback periods for the consumers and finance rate buydowns for the dealers.”

Financing options are also often made more accessible through various buying groups, including Flooring America. “The financing cost is negotiated by [group management] for Classique Floors, which makes it very appealing us,” said Judith Huck, owner, Classique Floors, Portland, Ore. “We also want our customers to be able to purchase from us any way they want.”

It is also important to note that credit programs can be an added bonus for retailers whether or not they have a large number of customers looking for financial solutions. Just ask Deb DeGraaf, co-owner, DeGraaf Interiors, Grand Rapids, Mich., who continues to offer these solutions despite having a low number of consumers requesting credit. “We offer credit all year long and always have a 12-month, no-interest credit option available. We’ll advertise it pretty heavily when there are sales going on with Shaw and Mohawk, and we’ll have on average five to eight customers per sale period take advantage of it.”

For DeGraaf, credit is a necessity for her business because it’s available in other competing industries. “By offering credit your ticket price goes up and it makes it more affordable for customers to spread out the payments.”

One crucial point about offering credit is fully disclosing the cost of financing to the customer. As Henry’s Miller explains: “We’re upfront with our customers that there is a cost to using financing, and most are already aware of that fact.”

Talking to customers about credit and interest rates is part of best practices among most retailers. The retail sales associates at Abbey Carpets Unlimited, Napa, Calif., make sure customers are aware of the high interest charges associated with not paying off the purchase in the allotted time. “This heavy interest could be a negative if you don’t make sure your clients understand the results of not paying it off in full in the time frame of the contract,” said Janice Clifton, owner.

In addition to explaining the terms of a credit card, some flooring dealers require customers to make a specific down payment. For example, Classique Floors requires its customers to pay 10% to 25% down depending on the length of the financing chosen.

Retailers can also take advantage of credit opportunities regardless of their store’s location. For example, Abbey Carpets Unlimited is in a more affluent area yet still has customers who are interested in opening a flooring credit card. “On a fairly regular basis, a customer will choose the financing option, and this often enables her to upgrade her flooring choice or do more areas than she originally intended,” Clifton explained. “Our funding source provides us with the interest-free financing for a discounted rate not too much larger than the upgraded credit cards our customers would normally use. For our store, it provides us with a way to complete a sale that may be more than the consumer is ready to spend right now.”


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Credit: Retailers offer financing tips to entice larger purchases

January 30/February 6, 2017: Volume 31, Number 17

Screen Shot 2017-02-03 at 4.20.56 PMFor dealers like Mark Hayden, Carpet One Floor & Home, broaching the subject of credit and financing options frequently throughout the sales process is key to persuading the consumer to make a larger purchase than she initially planned. “Bring it up at the origin of the discussion when you start working with your customers, and bring it up another time during your conversation,” he explained. “Sometimes telling something to someone a few times will make it better understood and remembered in their minds.”

Evan Blanchfield, Campbell’s Carpet in Port Washington, N.Y., employs a similar strategy. “Let the customer know [credit] is available early on because then you can probably get a bigger purchase if something is out of her budget,” he said. “If your consumers know financing options are available from the start they know it’s within their reach.”

Some dealers look to influence the customer long before she enters the store. Carpetime in Grand Junction, Colo., for example, utilizes the web to educate shoppers about credit terms. “It’s worth mentioning [online] you offer financing that determines whether they come into the store or not. We like to let customers know it is available if that’s what they want and it’s one of the main things they are looking for.”

Jim Jensen, owner of Carpet Mill Outlet Flooring Stores, Denver, cites the importance of promoting credit opportunities through a variety of media. “We have found success with web and social promotions along with salespeople and POP materials. When you add mentions in the mass media like broadcast TV, cable and radio, we find the blanket coverage of all available media is the most effective approach.”

These are just some of the ways specialty retailers are successfully promoting credit in their stores. While the specific strategies might vary slightly from store to store, the common denominator is the sheer availability and access to retail financing options. From credit programs negotiated directly with banks and financial institutions to those offered in conjunction with manufacturers, there is no shortage of choices for specialty dealers.

Communicating this availability of financing consistently across all marketing channels is key to building greater awareness among flooring shoppers, experts say. This includes using promotional vehicles that fall outside of traditional mediums. “Using Facebook, websites, radio, mailers, banners, TV and newspaper advertising to promote our branding shows our customers we are consistent with our ability to finance effectively,” Tom Garvey, president and CEO of Lewisburg, Pa.-based Garvey’s Flooring America, told FCNews. He estimates approximately 30% of sales are generated from purchases financed over a 12-to-24-month time frame.

Consumer research supports the relationship between active promotional credit initiatives and big-ticket purchases achieved via financing. For instance, the findings of a recent survey conducted by Synchrony Financial—which offers credit programs for retailers and consumers alike—show 65% of respondents in the flooring category “always” seek promotional financing options when making a major purchase, while 72% indicated promotional financing makes large purchases more affordable.

Despite these numbers, experts say there is room for improvement. That same study revealed 32% of flooring shoppers who are not Synchrony Bank cardholders reported awareness of financing options compared to 58% last year. According to Glenn Marino, Synchrony executive vice president and CEO, payment solutions, this means retailers need to do better at integrating credit information across multiple channels.

The good news for retailers is consumers are indeed actively seeking ways to finance their flooring purchases. According to Synchrony Financial, roughly two-thirds of flooring shoppers conduct research through search engines, the retailer’s website and manufacturer sites. Another 34% also leverage third-party online review sites. “Integrated campaigns across email communication and retail site advertising also reinforce dealer participation and broader brand messages to help build incremental awareness among consumers,” Marino explained.

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Credit: Financing options help consumers buy more

October 10/17, 2016: Volume 31, Number 9

By K.J. Quinn

screen-shot-2016-10-17-at-10-28-52-amRetailers are challenged to increase awareness of opportunities to finance flooring purchases, which plays an important role in the shopping experience. Promoting these programs is a necessity during a time when most customers conduct research, including credit options, before stepping foot inside the store.

“Our retailers continue to tell us that offering consumer financing in today’s retail landscape is a must,” said Susan Hahn, director of new business development at Mohawk, which offers a private-label credit card. “Finance plays a major role in the consumer’s decision-making process and is a determining factor in where they shop and ultimately buy.”

More importantly, the availability of credit programs raises the potential for larger purchases. “On average, a finance transaction is eight times the size of an order paid in cash and four times the size when paid with a credit card,” said Aaron John, director of flooring network and retail programs at Shaw.

The proof is in the pudding, as evidenced by Synchrony Financial’s Fifth Annual Major Purchase Consumer Study. The Synchrony cardholders survey, conducted June to July 2016 by a third party, found 65% of respondents in the flooring category “always” seek promotional financing options when making a major purchase while 72% indicated promotional financing makes large purchases more affordable. “Research snows 32% of flooring shoppers who are not Synchrony Bank cardholders reported awareness of financing options, compared to [58%] last year, indicating retailers need to do better at integrating credit information across multiple channels,” said Glenn Marino, Synchrony executive vice president and CEO, payment solutions. (Both Shaw and Mohawk work with Synchrony Financial to provide credit options to the consumer.)

As consumers become more decisive, they may be influenced by the amount of information found during their research process. “Consumer financing should be part of your consistent messaging in all advertising mediums, whether traditional or digital,” said Keith Spano, president, Flooring America/ Flooring Canada, a Manchester, N.H.-based retail group. “Obviously, the best scenario occurs when—through our advertising—a customer comes onto our site and gets approved online for a Flooring America/Canada credit line.”

The consideration cycle for flooring shoppers is significantly shorter—dropping from 90 days in 2015 to 67 days this year, according to the study. As a result, dealers are encouraged to integrate credit and financing offers early and often, especially on their websites. “[This] makes it easy for flooring shoppers to find the information they are looking for during their search and can help ensure a flooring retailer is part of the customer’s consideration set,” Marino said.

Communicating the availability of financing consistently across all marketing channels is important and helps build greater awareness among flooring shoppers. “Using Facebook, websites, radio, mailers, banners, TV and newspaper advertising to promote our branding shows our customers we are consistent with our ability to finance effectively,” said Tom Garvey, president and CEO, Garvey’s Flooring America, with locations in Northumberland and Bloomsburg, Pa. These marketing efforts are successful, he said, noting approximately 30% of business from purchases financed over 12 to 24 months.

Jim Jensen, owner of Carpet Mill Outlet Flooring Stores, Denver, cites the importance of promoting credit opportunities through a variety of media. “We have found success with web and social promotions along with salespeople and POP materials. When you add mentions in the mass media like broadcast TV, cable and radio, we find the blanket coverage of all available media the most effective approach.”

The vehicles retailers employ to promote financing options are ever changing. “Much of the traditional ways of advertising, like newspapers and inserts, do not work as well as they did years ago,” reports Tom Urban, general manager, Great Lakes Carpet & Tile, with three locations in central Florida. “Finding ways through social media and in-store events can be challenging.”

screen-shot-2016-10-17-at-10-31-19-amThe survey reports roughly two-thirds of flooring shoppers conduct research through search engines, the retailer’s website and manufacturer sites. Another 34% also leverage third -party online review sites. “Integrated campaigns across email communication and retail site advertising also reinforce dealer participation and broader brand messages to help build incremental awareness among consumers,” Marino said.

All of which makes it important for credit options to be readily visible with all product specials, sales and promotions. Approximately two-thirds of flooring shoppers decide on their payment method before entering the store to buy, an indication salespeople must be prepared to address queries on financing options. “Sales associates are always asking for payments or deposits from consumers and need to make sure financing options are offered right from the beginning,” Urban said.

While prime lending offers help lure customers inside the store, educating consumers about how financing options can increase their buying power is an integral part of the selling process. “Proper training of your staff, coupled with ensuring they offer financing at every customer touch, is crucial to any credit program’s success,” said Michael Fredricks, senior vice president of business development at Fortiva Retail Credit.

Lending plans range from private-label credit cards, deferred payments and same-as-cash, which provide consumers with low monthly payments and extended financing. “We have seen retailers creating a buzz to drive traffic in the door via extended deferred interest periods—no payments for ‘X’ amount of years, product discounts [such as] ‘buy one room, get another room free,’ seasonal messaging, etc.,” Fredricks said.

It’s not uncommon for shoppers to leverage credit to upgrade to better quality products or purchase additional flooring. The study found cardholders spend an average of $416 more than non-cardholders. “The fact remains, when a customer engages with our consumer financing, she’ll buy better product than she anticipated, or will purchase more product for more areas of the house than she originally planned,” Canada’s Spano said.

Financing plans make it easier for most consumers to spread out payments for their flooring purchase over a number of months while helping dealers create a platform for building their business. For example: Great Lakes’ Urban recalled a situation involving a couple who initially chose a one-year, no-interest financing option to purchase carpet for their master bedroom. “I also mentioned to them that I had the measurements for the other rooms to see if they were interested, at that time, to do more flooring. They said no, but they would keep it in mind for possibly later next year.”

Fast forward 45 days later, Urban said the couple called after receiving their paperwork from Synchrony and decided to purchase the rest of the flooring that was measured. “My original order was for $1,138, but the last invoice was $2897.30,” he noted.

While there is no one-size- fits-all credit program, lenders can recommend an approach that fits a retailer’s sales model and provide assistance for optimizing results. “Synchrony Financial’s marketing teams understand flooring shoppers’ path to purchase and work with flooring retailers to help build customer awareness across multiple channels, including integrating financing options with online advertising, retailer site finance landing pages, print advertising, retailer POP materials, and any radio or television advertising,” Marino said.

Fortiva’s retail credit program allows participants to close one out of three customers they are losing today. “[This] equates to a 10% to 20% increase in financed revenues to your bottom line,” Fredricks explained. “This simultaneously promotes employee retention with higher sales commissions and increases customer satisfaction and loyalty.”

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Credit: Using financing options to seal (larger) deals

July 4/11, 2016; Volume 30, Number 27

Screen Shot 2016-07-15 at 4.17.05 PMBy K.J. Quinn

The availability of financing can be a key factor for consumers when making large investments such as flooring. And unlike yesteryear, today’s shoppers are savvy, spending an extended period researching their options including credit and financing.

“Customers seeking flexible payment options consider financing during their flooring research and may proactively ask about promotions,” explained Glenn Marino, executive vice president and CEO of Payment Solutions, Synchrony Financial. “Dealers benefit by offering programs to help them stay competitive and help build a stable of loyal customers who may make higher-quality choices or return for future flooring purchases.”

There are many consumer credit options available to finance floor covering purchases. Choices range from private-label credit cards, deferred payments and same-as-cash, which provides consumers with low monthly payments and extended financing. “These programs allow the smaller independent retailer to better compete with the big box stores,” noted Mike Zoellner, Mohawk’s vice president of marketing services. “They can advertise extended-term consumer financing and pay rates that are comparable to large retailers with lots of buying power.”

Synchrony’s Fourth Annual Major Purchase Consumer Study, released in June 2015, underscores the importance of financing. The report found 87% of Synchrony’s flooring cardholders “always” seek promotional financing when making a major purchase (more than $500). What’s more, over one-third of flooring cardholders surveyed would not have made a major purchase if financing was not available. “Further, 91% of flooring cardholders surveyed said they feel promotional financing makes their large purchases more affordable,” Marino said.


Leveraging credit for upgrades

A promotional financing program arms consumers with buying power to purchase the products and services they want instead of settling for something less expensive. “When a customer provides her budget but realizes her project will be more than she had anticipated, financing becomes the perfect fit,” said Brian Witkin, executive vice president of sales, Avalon Flooring, Cherry Hill, N.J., which operates 14 locations in Delaware, New Jersey and Pennsylvania. “Our sales associates can then show more high style/price product options which the customer is open to as she understands the long-term investment.” A sales team can also take the opportunity to introduce complementary products customers may not have been initially shopping for such as window treatments, rugs and backsplashes.

Retail financing promotions have proven to increase the value of the average ticket. Case in point: The Synchrony study found its flooring cardholders spent 64% more for their average purchase than shoppers who did not have a card. “Financing allows our customers to get the floors that they want now and pay the balance later when the funds are available,” noted Kurt Duitsman, president, Floors for Living, which operates 20 locations in the Houston area.

Many plans allow financing to be funded at the time of sale. “To avoid problems, our contracts are very specific about the funding date and our customers initial it,” Duitsman added. “The customer gets free financing and we get the use of the cash prior to paying for the installation and the products.”

Other retailers are using credit to boost orders. “We find promoting long-term financing has helped to create more sales as well as increase the average order,” said Darren Braunstein, vice president, Worldwide Wholesale Floor Coverings, Edison, N.J.

The retailer, which utilizes Synchrony, usually offers 12 or 24 months of financing with 0% interest. “The main difference with financing today is the requirement for the consumer to pay a minimum monthly payment,” Braunstein added. “This has been a good change in that the consumer is more accountable for the transaction; they have an immediate obligation to start paying down the purchase.”

Financing spread out over 12 to 15 months is commonplace, industry members said, although some retailers are more inclined to offer longer credit payment plans. For example, Flooring America/Flooring Canada offers various consumer financing programs with most members preferring 18- and 36-month deferred payment/same-as-cash plans, explained Keith Spano, president of the Manchester, N.H.-based retail buying group. “Flooring America/Canada members benefit from not only our low-negotiated financing rates but also from the fact that we corporately buy down the rates, saving our members substantial financing charges.”

Groups such as Flooring America have the buying power that allows members to offer interest-free finance promotions throughout the year. “They are able to tie together product and finance [offers] to create [valuable] retail promotions that enable us to provide aggressive price discounts on our products,” said Kelby Frederick, co-CEO and owner, My Flooring Texas, baed in Denton. “Plus, they offer long-term finance offers instead of having to offer one or the other.”

While there is no “one-size-fits-all” credit program, lenders can recommend an approach that fits a retailer’s sales model and provide assistance for optimizing the results. “Our programs do more today than simply fund the purchase of goods and services,” Synchrony’s Marino said. “The proprietary tools, branded programs and promotional financing help attract flooring shoppers and foster loyalty among our partners’ customers.”

Both retailers and consumers want a smooth, seamless experience at every stage of the financing process. A major challenge is effectively communicating options to shoppers. “We mention it early and often throughout the sale and do not ‘sell it’ in the traditional fashion,” Avalon’s Witkin said.

When financing options are explained at the outset it makes it easier to use them as a closing tool. “It moves the focus off the per-unit price and moves it to the full-project price,” Frederick pointed out. “[This] typically allows the customer to seek out higher-quality products she really wants for her home.”

Store employees are advised to receive credit sales training, which includes guidance on how to offer financing in an effective manner. “We have Flooring America corporate staff working with Synchrony daily to ensure a good financing experience for our members and their customers,” Spano said. Synchrony employs a team of trainers dedicated to ensuring its partners have the necessary tools to help them successfully offer financing promotions. By consulting with retail partners, lenders can develop financing programs to help increase engagement, sales and loyalty.

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Credit: Benefits of retail financing options outweigh the cons

April 25/May 2, 2016; Volume 30, Number 22

By Jana Pollack

Screen Shot 2016-04-28 at 1.04.07 PMFinancing programs are more than just a vehicle to bring customers into the store. Ultimately, credit options help retailers upgrade consumers and encourage repeat business.

“These programs benefit retailers by helping them compete in their local markets,” said Mike Zoellner, vice president of market development at Mohawk. Specifically, he said, independent businesses can offer extended financing at competitive rates that are usually only available to large chains and home centers. “These rates level the playing field by allowing retailers to advertise and promote at the same level as the larger home centers.”

Another significant benefit of credit programs is it raises the potential for larger ticket items. “On average, a finance transaction is eight times the size of a transaction paid in cash and four times the size when paid with a credit card,” said Aaron John, director of flooring network and retail programs at Shaw.

Financing not only provides opportunities for retailers to sell more products at higher margins, but it also helps sales associates respond to a common consumer objection: price. “When you remove the cost/affordability factor, it really becomes more about an opportunity for the consumer to get the product that they desire,” John explained.

Repeat purchases become easier once a line of credit is open as this often extends to all of the retailer’s cardholders. (This essentially becomes a “referral” system.) This is significant, John said, given the fact that almost one out of every five of transactions today is a repeat purchase.


Options galore

Shaw offers retailers several different financing programs ranging from 90 days to 18 months, all the way up to five-year plans. The most popular program, according to John, is the 12-month minimum paid deferred interest plan. “There’s a cost for the retailers to process any finance transaction so the longer the payment, the greater the cost,” he explained. “At Shaw we participate with our retailers in that cost and offer them a buy-down, which basically means any transaction that they process on our 12-month plan—as long as they’re selling and installing a Shaw product—we’ll buy that down for our retailers every day.”

Another popular plan is Shaw’s 24-month equal payment option. “Obviously for a consumer it doubles the amount of time they can pay down the transaction, and it extends it so it’s less they have to pay per month,” John explained. “Then, during our promotional periods, we buy the cost of that financing all the way down to the same amount that we buy down our 12-month plan every single day. It’s a significant investment on Shaw’s part and a huge consumer benefit as well.”

At Mohawk, the 12- or 18-month financing options are favored by its retail partners. For example, during the Mohawk Love Your Floor Sale, participating retailers offer “no interest financing until 2019,” which means for a purchase of $1,500, the consumer will pay less than $50 per month, or $1.70 per day. Long-term financing options such as these not only drive traffic into the store, but they also serve as effective closing tools, Mohawk said.

Mohawk is working to make the process even more affordable for retailers. For instance, the company occasionally offers rate buy-downs on the purchase of a Mohawk-branded product. This further lowers the net rate retailers are paying for the extended financing offer, oftentimes below the rate they pay to process MasterCard, Visa or American Express charges, Zoellner said.


Overcoming objections

Financing programs come with some inherent challenges, however. Training RSAs to address consumer objections is high on the list. “The challenges are really the retailer and their staff overcoming whatever objections they may have to presenting and discussing financial options with a potential consumer,” John said. Sales associates, he noted, must overcome a common fear that the sales process will go awry if financing is offered to a customer who is ultimately declined.

Mohawk believes these fears are largely unfounded. “The approval rate on our platform is about 85%, so a significant majority of all applicants are approved for financing,” Zoellner said. “From a retail salesperson’s perspective of having a fear of creating a bad experience, I think that’s mitigated by approval rates.”

Shaw agrees, citing statistics that make a strong case for offering credit to the customer. “Fifty-six percent of cardholders who were surveyed said they would never have made their purchase from a retailer if financing wasn’t available,” John said.

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Credit: Dealers share financing tips

February 1/8; Volume 30/Number 16

By Nadia Ramlakhan

From attractive offers on social media and the web to strategically mentioning available options during the sales process, there are numerous ways to entice consumers with financing programs.

FCNews asked dealers for their top tips on how to utilize financing to grow sales.


Qualify your customer

First see if the customer looks like he will qualify so I don’t take advantage of him—that is the main thing. A lot of customers come in and you can tell just by looking at them that they aren’t going to be qualified at all and you don’t want to put someone in a position where they are killing themselves with debt.

—Larry Lauger

Lauger Carpet One Floor & Home

Findlay, Ohio


Often in the process

Offer it more than once. Bring it up at the origin of the discussion when you start working with your customers, and bring it up another time during your conversation. Sometimes telling something to someone a couple times will make it better understood and remembered in their minds.

—Mark Hayden

Carpet One Floor & Home

Owensboro, Ky.


Advertise online

It’s worth [mentioning that you offer financing] on your website—that determines whether they come into the store or not. We like to let customers know it is available if that’s what they want and that’s one of the main things they are looking for.

—Lola Ledebur


Grand Junction, Colo.


Special offers

We offer 12 months, no-interest financing all the time, and on occasion when Synchrony has a better promotion we offer 18 to 24 months; we make sure to put it in our ads. We have a special starting Feb. 10 promoting 18-month financing; it costs us 5% but we figure it is worth it.

—Jack Doolittle

Doolittle’s Carpet and Paints

Fairmont, Minn.


Early bird gets the worm

Let the customer know that it is available early on because then you can probably get a bigger purchase. If something is out of their budget they might say, “Hey, I can’t afford this,” or “It’s out of the way,” but if you let them know financing options are available from the start they know it’s within their reach.

—Evan Blanchfield

Campbell’s Carpet

Port Washington, N.Y.

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Credit: Taking advantage of financing

October 12/19; Volume 30/Number 9

By Nadia Ramlakhan

Screen Shot 2015-10-16 at 1.33.20 PMThe consensus among retailers who successfully integrate financing into their businesses is that it is a win-win for everyone involved. With credit, the consumer has more options to choose from because price is no longer an issue. And from a dealer’s perspective, there are a number of benefits that coincide with offering financing programs, including an increase in the average ticket, more foot traffic in the store and, ultimately, bigger profits. For those retailers who are still unsure of how to gain from financing, FCNews rounded up some advice from top dealers and executives across the country.

Switch things up

Modern consumers have come to expect financing offers on large purchases whether it is furniture, electronics, a car or flooring. With that, dealers should always have at least one offer available—but remember to vary the terms and conditions during key sales events, product launches and busy buying seasons to create a sense of urgency. According to most flooring retailers, customers are more likely to buy when they know the offer is only available for a limited time.

For Kevin Rose, president and owner of Carpetland USA with two Illinois locations, changing the store’s financing offer every other week works best; after all, a special isn’t so special if it is available all the time. “It’s just a matter of switching it up and having something available,” he said.

Early, often in the process

It seems the golden rule of financing is to talk about it early and often during the sales process. Mentioning it throughout the conversation helps ease the consumer into the idea of low monthly payments, which opens the door to more expensive items. Some dealers make the mistake of positioning financing as an afterthought, or an option that only becomes available if the customer is interested in an item above her budget. “The key to financing is making it a part of the sales process,” said Keith Spano, president of Flooring America. “It can’t be something that’s brought up at the last minute; [it should be presented] early and often throughout the sales process.”

Kurt Duitsman, owner and president of Floors For Living with 16 locations throughout Texas, introduces his special financing options during the initial greeting with a customer. “To be successful at financing you should mention it at the beginning and end of the sale. In every greeting you must say, ‘In addition to our low sale prices you also get up to four years of free financing,’ [for example]. At the end of the sale you must ask, ‘Did you want to use free financing or would you rather pay cash?’”

In-store visibility

The Internet has made it possible for customers to browse product selections online before stepping into a brick-and-mortar location. This means that once she is in store, she has already done her research and is ready to purchase. Displaying signage and other traditional POP materials in the showroom helps keep financing top of mind for consumers.

For dealers who want to take the subtle route, Scott Perron, CEO of 24-7 Floors in Sarasota, Fla., recommends having sales associates wear lanyards around their necks that read, “Ask me about our 12-month financing” or similar promotions. “It’s much better when it’s the customer’s idea. If you have it hanging around your neck it won’t seem like you’re trying to hammer her and it gives her an opportunity to ask you about it before your hard sell.”

Find the right partner

Different buying groups, banks and manufacturers work diligently to develop plans that appeal to both retailers and consumers in the flooring industry. Because each market has specific needs and preferences, a dealer should find out which partner and plan will work best for him. For example, some companies offer aggressive buy downs and low rates while others provide tools to help with in-store promotion and lead generation.

When it comes to finding the right program, research shows that longer terms and lower monthly payments are more appealing to consumers; however, dealers need to be wary of incurring costs. “Partner up with a bank that can offer [what you need],” said Barry White, owner of Carpeteria in Lancaster, Calif. “Most people that do financing are not as concerned about the total price as they are the payment.”

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Credit: Proven programs, incentives help capture consumers

July 6/13; Volume 30/Number 2

By Nadia Ramlakhan

Screen Shot 2015-07-10 at 11.37.35 AMOver the years, retailers have offered many types of financing options to consumers; some have been successful, while others go as quickly as they come. Although consumers have learned to expect a financing offer on large purchases, dealers wrestle with finding those that will close the sale.

Generally speaking, financing options bring in more money for dealers. “People are accustomed to large purchases being financed whether it’s automobiles, furniture or flooring,” said Ed Cross of Ed’s Flooring America in Hooksett, N.H. “Just offering financing has allowed us to close sales on products that aren’t on sale; consumers actually get what they want at an affordable price.”

Retailers can offer anything from 12-, 18-, 24-, 36- and even 48-month plans; however, 18-month terms seem to be the sweet spot for most successful dealers. “Research says longer terms (three years or more) are more compelling to consumers and motivate them to come into the store but cost [the retailer] more than one-year financing,” said Mike Zoellner, vice president of marketing services for Mohawk. “For the most part, 18-month financing is used most often by our aligned dealers.”

Bret Lowder, vice president of The Floor Store with multiple locations in California, agreed that 18-month plans have proven to be most effective. “People like 24-month terms, but we don’t see an exponential result increasing from 18 to 24 because the interest the dealer is charged jumps. People may appreciate it more, but we don’t see an uptick on returns.”

On the other hand, some retailers find success with longer terms. “The longer the terms the better,” said Kurt Duitsman, owner and president of Floors For Living with 16 locations in Texas. “Four years works best for us because after the 10% deposit we can say, ‘For every $1,000 you invest in flooring it’ll cost you less than $20 per month.’ It’s really about how low you can get the payments.”

For Shaw aligned dealers, there is a significant increase in the average ticket when a consumer chooses to finance a purchase. “Larger purchases are being made when credit is used,” said Aaron John, director of Shaw Flooring Network and its retail programs. While the average ticket is typically about $1,000, Shaw’s 12-month plan with minimum payments and deferred interest is its most popular initiative, increasing the average ticket to about $3,200.

Most dealers always run one financing program or another but make sure to switch it up during busy buying seasons. Some suggest combining special offers with financing options. “During certain events we bring out the big three: interest-free financing, up to 50% off, plus no sales tax,” Lowder said. “You have to be careful because if you constantly run one promotion it loses its effect.” For example, because Memorial Day and Independence Day hit during the peak of construction season, Lowder emphasizes those deals a little more in-store and online.

Bill Wissler, vice president of strategic sales for Carpet One Floor & Home, also noted the importance of combining financing offers with sales. “We encourage our members to offer financing year round as a way to drive incremental sales. We provide additional support with special financing promotions during key sales times and in coordination with new product launches and product-specific sales.”

Flooring America dealers have more success when financing offers are open to multiple products, according to the group, and recently started to vary the terms of plans based on quality of product. “When we offer a financing promotion on one product or brand, it puts the salesperson at a disadvantage,” said Keith Spano, president of Flooring America. “Now we’re doing things a little bit differently. For example, a four-star product may be at one rate, while a five-star product may be at a lower rate.”

Glenn Marino, executive vice president and CEO, payment solutions, Synchrony Financial, urges retailers to take advantage of digital marketing. “Financing is foundational to a retailer’s sales and marketing plans, proven to increase sale amounts and drive repeat purchases. We encourage dealers to communicate available financing programs consistently across all channels—in-store and online.”

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Credit: Partners that make a difference

April 27/May 4, 2015; Volume 29/Number 2

By Nadia Ramlakhan

Screen Shot 2015-05-29 at 5.12.30 PM There are many benefits that come along with a dealer being able to offer financing to his customers. Advertising these offers increases foot traffic in stores, encourages consumers to purchase more or better products, and gives specialty retailers the edge they need to compete with the big boxes and stay in the game. Although independent dealers can offer financing plans to consumers on their own, having the right partner can make all the difference when it comes to building business, whether it’s by providing lower rates, varying options for different customers or generating more leads.

“When a consumer is approved for financing, the question of affordability is taken out of the equation,” said Aaron John, director of Shaw Flooring Network and its retail programs. “It becomes a question of which products she likes and which ones meet her lifestyle. Every product in the showroom is now available for her to choose from.”

Synchrony Financial (formerly GE Capital) understands the importance of building a loyal customer base and works with multiple manufacturers and buying groups to meet the specific needs of floor covering retailers. Having been in the industry for nearly three decades, Synchrony recognizes that special financing programs help dealers attract and retain customers as well as build repeat business.

“We’re committed to helping flooring dealers drive traffic and provide the best consumer shopping experience,” said Glenn Marino, executive vice president and CEO, payment solutions, Synchrony.

According to Synchrony Financial’s third annual 2014 Major Purchase Consumer Study, 81% of cardholders said they always seek financing options when making a large purchase like flooring. “That’s why Synchrony Financial continues to offer access to a range of special financing options including no, low or deferred interest,” Marino said. “We also work closely with our flooring partners to offer promotions throughout the year.”

In addition to providing aggressive rates through its partnership with Synchrony, Shaw offers buy downs which essentially reimburse retailer partners for the cost of financing, so they typically only pay the cost of using a credit card; most dealers have already included that cost in regular pricing. Shaw’s 12-month plan with minimum payments and deferred interest is its most popular credit program and is offered to retailers every day as part of a strategy John calls “all Shaw all the time.” Special deals and rates are offered during sales and promotions throughout the year.

With the help of Synchrony, Shaw’s extensive variety of financing options helped Kurt Duitsman, owner and president of Floors For Living, open 16 locations throughout Texas within three years. “Finance is my best product,” Duitsman said, adding that over 40% of his business comes from credit programs. “Some customers need longer plans while others only need six months, but almost everyone wants no interest money.”

Mohawk is another major manufacturer that looks for ways to help retailers offer financing without incurring the usual costs. “It’s important to find a bank that understands the flooring industry,” said Mike Zoellner, vice president of marketing services for Mohawk. “For example, with electronics a customer finances something for 12 months, puts it in a car and takes it home. In our world, a customer leaves a deposit for mScreen Shot 2015-05-29 at 5.12.25 PMaterials and the installation is scheduled for some time in the future.”

Through its partnership with Synchrony, Mohawk’s programs allow retailers to get the money on the deposit as opposed to most banks, which don’t pay the retailer until the product is delivered or installed. Mohawk also negotiates with Chase to offer retailers preferred rates on MasterCard and Visa processing as well as low rates for private label cards. It also uses a lead generating system to keep track of cardholders.

“We looked for other things we can do in partnership with Synchrony that give value to retailers, things they can’t do on their own,” Zoellner continued. “All the leads we generate for a specific retailer go into the lead center. We can market to everyone who has bought using a Mohawk credit card, especially if they have an open line of credit. In six months we can go back to them and say, ‘You love your floors and still have some credit left, why not start on another room?’”

Bret Lowder, vice president of The Floor Store, with multiple locations throughout California, is one Mohawk dealer who has embraced financing programs, making sure his sales staff always leads with offers that result in upselling. “The program has proved invaluable to us,” he said. “With high-ticket items, everybody focuses on financing; even the wealthy love free money. When you look at the rates we get from Synchrony, it’s comparable to what Visa will charge us. In reality we increase the sale 67% by using a private label plan and the cost is the same.”

With most consumers researching flooring online before even stepping into a store, financing options have become an expectation as they are ready to buy once they are in front of a dealer. “It certainly drives traffic and by talking about it often and early in the process retailers are meeting that expectation,” said Keith Spano, president of Flooring America. “Retailers can provide financing on their own but the rates may be the same as everyone else’s and they have to foot the bill themselves, whereas we spend significant dollars in buying down rates to make it affordable for our members.”

Spano explained that most big boxes typically offer 12-month plans, which puts retailers at an advantage as they are able to offer up to 60-month plans. Advertising longer terms gives dealers the upper hand.

Synchrony helps dealers provide a consistent experience across all their sales and marketing platforms, ensuring the customer sees the same promotional details online and in-store. “The most successful dealers integrate financing into their sales and marketing plans to help customers understand that the right offer can help them get the flooring they want, within their budgets,” Marino noted.