It’s undeniable that the retail industry is shifting towards a consumer financing model. Central to this shift is the recognition that the consumer experience should prioritize accessibility and flexibility, ensuring that purchasing a hot tub does not involve sacrifice or buyer’s remorse. When applied to the spa market, this flexibility not only broadens the appeal of spa ownership but also opens opportunities for dealers to capture a wider market segment, including those who may have previously hesitated due to financial constraints. By providing financing options, you are alleviating the burden on consumers, allowing them to invest in a hot tub without feeling constrained by monetary limitations.  

Johanna Dorn, Director of Sales & Marketing at Costello’s Hearth & Spa, has offered financing at her dealership for years and is a firm believer that this financial strategy increases your competitive advantage, saying, 

“You want to be on as much equal footing as your competitor. Do they offer financing? If they do I need to. If they don’t offer financing I do to give me a leg up.” 

Failure to provide financing options not only puts you at a disadvantage but also risks alienating potential customers who expect such flexibility in their purchasing journey. By aligning with industry standards and meeting consumer expectations, you are positioning yourself as a leader in customer service and satisfaction, enhancing your brand reputation and market competitiveness.  

How To Do Consumer Financing 

The first step to implementing consumer financing at your dealership is to research and establish partnerships with reputable financing institutions that specialize in consumer lending. At Bullfrog Spas we have already completed this step for you by partnering with Wells Fargo for our US based dealers and FinanceIt for our Canadian dealers.  

After choosing a partner, it’s time to build consumer financing into your business model. One approach to integrating consumer financing into your business is by building the cost of financing into the sale price of the spa. By doing so, you can offer financing options without sacrificing profitability. However, navigating the complexities of financing integration requires careful consideration and planning to ensure a smooth transition.  

Johanna from Costello’s has built a spreadsheet with every possible scenario or spa offer they could utilize for the year, including reduced interest promotions, clearance sales and more.

“I margin everything based upon sale price and then how much financing we are actually going to pay on the backend.” Each month she looks at the finances and asks “What do we want to offer? How much can we give away?”  

While configuring a spas ideal price, be sure to consider market demand and competition, ensuring that their pricing strategy remains competitive while still allowing for a healthy profit margin. During peak seasons, such as spring and summer, when demands for spas is typically higher, consider offering special financing promotions or discounts to incentivize purchases and capitalize on increased consumer interest. Conversely, during slower seasons or economic downturns, dealerships may adjust their pricing and financing offers to attract customers and stimulate sales. “Depending upon when in the year it is, we will actually think about how long of a term they get,” says Johanna. “...So in winter or in fall we are trying to push sale and customer is like I’m not really going to get in it more than 2 times this year, well cool we are going to give them years to pay for it.” 

Ultimately, incorporating consumer financing into your business model can be challenging due to the complexity of managing financial partnerships, navigating regulatory requirements, and ensuring profitability while accommodating varying credit profiles; however, doing so will allow you to tap into an entirely new market of consumers. If you are unsure how to build financing into your business model, please contact your Regional Manager.  

Qualifying Consumers for Financing  

When considering offering financing, remember that you have the ability to set financial requirements for the sale, such as minimum credit scores or down payments, to mitigate risk and ensure that financing options are offered responsibly. According to Stan at Colorado Custom Spas who has offered consumer financing since his store opened, “You can set up requirements that the consumer must meet a spending threshold to qualify for a certain plan because that plan is going to cost you more.”  

Try to offer support and guidance to your customers as they navigate the financial application process, addressing any concerns or questions they may have along the way. In the instance that a customer is denied, it’s essential to handle the situation with sensitivity and professionalism. More often than not if the consumer contacts the bank, they will be able to get to the bottom of why they were denied and work out a solution to get them approved.  

Wells Fargo is one such bank that often provides helpful resources for customers, as well as dealers, including collaborating with dealers to create links they can send customers that allows them to easily pre-apply for financing, streamlining the process. Johanna at Costello’s utilizes this link to the max, stating “We have links on our website where if you wake up at 3 o’clock in the morning and decide you want to shop for a hot tub, you can apply for financing online. Before you even set foot into our store…” If you need help getting a link created for your own website or would like to know what other resources Wells Fargo provides our dealers, please contact your Wells Fargo Representative or your Regional Manager.  

Tips for Selling with Financing  

Make sure that you are leveraging your consumer financing offers. You will need to adopt strategic approaches to selling and promoting your spa financing options. Here are a couple of things to keep in mind while selling:  

  • Showcase Affordability: Show customers how financing can fit within their budget and lifestyle, emphasizing the long-term value and enjoyment they will receive from owning a hot tub. A critical aspect that consumer financing addresses is the notion that consumers should not have to choose between a hot tub and other significant expenses, such as vacations or home renovations. 
  • Offer Competitive Financing Plans: Provide options such as low-interest rates, deferred payment plans, and flexible repayment terms to accommodate different financial situations and preferences.  
  • Educate Customers: Many customers may not be familiar with the benefits of consumer financing. Take the time to educate them on how financing can make hot tub ownership more attainable by breaking down the cost into manageable monthly payments. Highlight the flexibility and convenience of financing options, such as low down payments and competitive interest rates. 

Stan describes a technique he and his team often use to sell with financing saying,  

“What we often try to do, is somehow gage what they are into, what are their hobbies or interests, and then tie that into physical health and then tie that into message therapy… the cost of a massage for a couple to go just once a month would be a couple hundred bucks, right? The cost of owning a hot tub you can use every single day of the month and pay about the same.” 

With the right approach, consumer financing can be a powerful tool for making spa ownership a reality for more customers, ultimately increasing your sales.  

Promotions & Financing 

Promotions offering deals on consumer financing offer an excellent opportunity to showcase the affordability and accessibility of spa ownership and can significantly boost sales. Here are some tips on how to effectively utilize consumer financing promotions at promotional events and throughout the year:  

Plan Strategic Promotions: Use consumer financing promotions as a key selling point to entice customers and differentiate your dealership from competitors during sales. Stan and his team in Colorado often strategize their promotions based on inventory, “We’ve also offered promotions on products that we are trying to clear out. So maybe have an overstock on Swim Spas, something like that, then that makes it a little easier for the consumer to get into the Swim Spa market if they have financing tools.”  

Showcase Financing Options: Showcase financing options prominently in your marketing materials, both online and in-store, to raise awareness among customers. Highlight the benefits of financing, such as low monthly payments and flexible repayment terms, to demonstrate how easy and accessible hot tub ownership can be. 

Attend Promotional Events: By participating in home shows and local events, you increase brand visibility, generate leads, and drive foot traffic to your dealership. Make sure you are leveraging your financing options at these events to make hot tub ownership more accessible and attractive to customers.

Ensure you are well prepared and equipped at each event, Stan advises, “Trying to balance the time the salesperson has the time in the booth versus the time it takes to run a financing application is kind of tricky. You want to make sure whatever solution you are going to take to an event is quick and easy, it doesn’t take up too much time.”  Try having a QR code ready for customers to scan where they can easily apply for financing online.  

Ultimately, transitioning to a financing model may not encompass the entirety of your business, incorporating financing options for select customers can significantly enhance your sales potential and customer satisfaction. By carefully navigating the integration of consumer financing into their business model, hot tub dealerships can adapt to evolving consumer preferences and position themselves for long-term success in the competitive marketplace. Reach out to your Regional Manager to get your dealership set up for success with consumer financing.