There’s no doubt that inflation is a hot topic in today’s market. You see it everywhere you go—at the grocery store, gas pumps, restaurants, manufacturers—the cost of goods everywhere has gone up, including your own. In March 2022, the annual inflation rate in Canada jumped to 6.7%, the highest it’s been since January 1991 and higher than predicted. The good news is that with consumer financing options in your back pocket, you’re already armed to combat the impact of inflation.
How Inflation Is Impacting Consumer Spending Behaviour
While the cost of goods continues to rise, most people’s incomes are the same. The result is that many consumers are keeping a closer eye on their budget, which can lead to a few different outcomes:
- They feel like they can no longer afford the home improvement project they want.
- They think they have to scale back on how much work they’re getting done.
- They have a strict budget without fully understanding what it can get them, leading to disappointment.
Despite the impact of inflation, we are still seeing increasingly high demand in the home improvement space, which means the interest is still there. Also, keep in mind that with the Bank of Canada recently increasing its rates, mortgage rates are also going up, and the housing market is cooling down. As a result, people are staying in their existing homes longer, which means they’re more likely to spend on upgrades and renovations.
What does all this mean for you? The truth is you’ll likely encounter more hesitation. But we’ve got you covered with tips and techniques you can use to handle objections.
How to Respond to Common Objections About Cost and Inflation
Here are a few tips to keep in mind when talking to consumers who have objections about cost.
Objection #1: The project is too expensive, and I can’t afford it.
- Solution: Remind the customer that breaking up payments into smaller, bite-sized payments through financing will stretch their budget further and make it more affordable to get what they really want instead of settling for what they think they can afford.
Objection #2: The cost of borrowing is too high.
- Solution: There’s no denying the ripple effect that inflation has had on the cost of borrowing. Reinforce with the customer that they can pay off the loan at any time without penalty. So yes, the interest rate and cost to borrow may seem more expensive now, but instead of putting off the project, they can use this as a bridge to get from point A to point B and pay off the loan when they are ready.
Objection #3: If I put this off for a while, maybe the cost will come down once things go back to normal.
- Solution: Generally speaking, costs aren’t likely to come down. At least not to where they were a few years ago. Not only that, but supply chain issues are still causing delays, so you’ll want to get ahead of that now. Rather than putting the work off, leverage our suite of financing products to lock in the price before costs go up more and avoid further delays.
Objection #4: I have too many monthly payments to manage and don’t want to worry about another one.
- Solution: Increase the amortization period to reduce the monthly obligation. If it’s over $10,000, customers pay less than $90/month* on the 240-month amortization product. This allows you to make it affordable for your customer while still staying within their budget.
This all boils down to one of the most fundamental sales tips: listen to your customers. Understand their concerns, figure out where their objections are coming from, and then try to come up with practical solutions that help them get the job done (with you).
Remember, your Business Development Manager is always ready to help with more tips and tricks to take your sales game to the next level!
*Terms of the loan may vary.
You can also contact Max Zubrick at [email protected] for more information. If you’re a contractor who’s interested in growing your business with consumer financing, click here to join SNAP Home Finance.