Q&A:

With economic uncertainty and high interest rates impacting the roofing market, roofing contractors are paying more attention to financing options for customers — not just as a means of getting paid, but even competing for the job in the first place. Scott Stiglich, senior vice president of channel partnerships at Watercress Financial, brings over three decades of expertise in sales and marketing leadership to his role, where he spearheads strategic growth and innovation.  

Of late, much of his time has been spent in the roofing industry helping entrepreneurs forge business relationships across diverse sectors such as consumer services, professional services, and industrial production.  

RC recently caught up with him to gauge the growing importance for roofing contractors to understand financing and how to turn it into a business asset. Here’s our Q&A.  

Editor’s Note: Answers lightly edited for clarity 

RC: Are roofing contractors different than other tradespeople you work with in the home improvement space?

Scott Stiglich (SS): Roofing contractors encounter many of the same challenges as their peers in the broader home improvement sector, particularly in securing homeowner financing and competing for contracts. However, what distinctly sets them apart is their intricate engagement with the insurance claim process. Unlike other contractors, roofing professionals must adeptly navigate the complexities of insurance policies, including changing terms and conditions, like higher deductibles that lead homeowners in search of financing alternatives, and a more recent trend by roofing contractors to require homeowners to secure financing prior to the project’s completion. 

This added layer of financial management is unique to the roofing industry and requires a specialized understanding of how to synchronize project requirements with insurance coverage stipulations. This unique challenge underscores the importance of specialized knowledge and skills in the roofing sector, setting these contractors apart from others in the home improvement arena. 

RC: Why is offering finance becoming more important for roofers now?

SS: The importance of offering finance options for roofers has surged due to several key market dynamics. The rise in insurance deductibles has placed significant financial strain on homeowners, necessitating alternative payment methods for essential roof repairs and replacements. In an era of economic uncertainty, consumers are increasingly hesitant to deplete their savings on home improvements, highlighting the need for financing solutions that alleviate immediate financial burdens.

For roofers, incorporating finance options into their services is not just about customer convenience; it's a strategic move to boost profitability and tap into new revenue streams. As the costs of roofing continue to climb, homeowners are eager to avoid the high interest rates of credit cards and the complexities of securing second mortgages or home equity lines of credit (HELOCs).

RC: How does financing help roofing contractors?

SS: More roofing contractors are diversifying their services and refining their marketing strategies to include retail roofing services. This shift not only broadens their market reach but also amplifies the need for robust financing options that cater to a wider array of customer needs. Offering accessible financing can be a game-changer, enabling roofers to stand out in a competitive market and meet the evolving financial needs of their clients.

RC: Roofers aren’t bankers. How do they overcome that mindset to accept financing?

SS: It’s essential to simplify and integrate the finance process into the roof sales workflow. Financing options should be clear and comprehensible for homeowners, and this clarity can be achieved through well-trained sales associates who effectively communicate these plans. 

Selecting an appropriate finance partner is also vital. This partner should provide an intuitive platform that makes it easy for roofers to present finance options to homeowners, ensuring a smooth transition from the sales proposal to the credit application and then prompt funding of the contractor upon project completion. By embedding financing naturally into the sales process, roofers can alleviate any concerns among their team members.  

When the process is straightforward, manageable, and well-executed by all involved, it becomes an integral part of their operations, contributing significantly to their success in the competitive roofing market. 

Theresa and Rick Stover, the founder’s daughter and son-in-law, purchased the firm from her father in 2008.

RC: How is a paperless and instantaneous credit process even possible?

SS: A paperless and instantaneous credit process is made possible through our advanced technology platform, which is specifically designed to align with contractors' business processes. This platform automates critical steps such as identity verification, credit checks, and instant approval processes without the need for physical paperwork. It's intuitive, fast, and supports multiple languages, including Spanish, making it accessible to a wide range of sales teams and customers.

RC: Can you elaborate on the platform’s accessibility?

SS: Our platform can be used on any smart device or computer, ensuring flexibility and accessibility. It also helps contractors manage credit applications and loan agreements in process, offering a complete view of each customer's journey. By integrating seamlessly with the contractor's workflow and using advanced tools that allow homeowners to make informed monthly payment decisions, our technology enables a truly paperless and instantaneous credit experience.

RC: What type of financial plans should roofing contractors consider?

SS: When considering financial plans, roofing contractors should prioritize options that provide direct payment to them upon project completion. This ensures immediate compensation and financial stability for the contractor. Ideal plans are those with minimal or no costs for the contractor, offering benefits like low monthly payments spread over terms up to 15 years. These plans should be transparent, free of hidden fees, and without prepayment penalties, allowing homeowners the flexibility to settle their debts earlier if they choose.

RC: What’s the difference between competitive rate financing and revolving credit plans?

SS: It's crucial for contractors to opt for competitive rate financing rather than open-end revolving credit plans, which often carry higher interest rates and contractor cost. By selecting plans with competitive interest rates, contractors can make their services more appealing and accessible to homeowners, enhancing their competitive edge in the market. This approach not only facilitates smoother transactions but also strengthens the trust and relationship between contractors and homeowners, contributing to sustained business growth in the roofing industry. 

Contractors should avoid offering too many financing plans. Presenting an excessive array of options can overwhelm homeowners, potentially leading them to defer their decision with statements like, "I need to think about it and get back to you." A carefully curated selection of financing solutions helps streamline the decision-making process and encourages prompt commitments from homeowners. 

RC: What are common mistakes to avoid?  

SS: In the realm of home improvement, a well-crafted financing strategy is essential, not merely an optional offering contingent on homeowner inquiry. Contractors who proactively include financing in every proposal are likely to experience incremental growth and an increase in average transaction value. Homeowners tend to opt for higher-end products when presented with appealing low monthly payment options, particularly when the sales process utilizes a structured “good, better, best” proposal approach.

The importance of training cannot be overstressed. Sales personnel must be thoroughly trained to transition smoothly from presenting a proposal to introducing financial solutions. This transition should be seamless, transparent, frictionless, and efficient, ensuring that the financial offering is an integral part of the customer's decision-making process.

RC: How vocal should roofers be about their financing options?  

SS: Failing to market financing options on the contractor's website and in marketing collateral is a significant oversight. Highlighting these financial solutions in all promotional materials not only informs potential customers of available options but also enhances the credibility and attractiveness of the contractor's offerings. Such a comprehensive approach not only enhances customer satisfaction but also boosts the contractor's overall success and market competitiveness.

RC: Roofers are misjudged all the time. Can the same be said for homeowners when it comes to financing?   

SS: It's crucial for contractors to avoid making assumptions about a homeowner's financial needs based on outward appearances, such as a luxury car in the driveway or a multimillion-dollar residence. This practice can lead to missed opportunities and does not consider that wealth is not always readily available for spending. Homeowners may prefer financing to manage their cash flow better, retain liquidity for unforeseen expenses or investments, or simply prefer the flexibility that financing offers. 

Contractors should consistently offer financing options to all customers, ensuring an unbiased approach that respects each homeowner's individual financial strategies. This uniform practice not only increases the likelihood of project acceptance but also enhances the professionalism and inclusivity of the contractor's service, making it more appealing to a broader range of clients. 

RC: What other services does Watercress financial offer?   

SS: Watercress Financial provides advanced training designed to ensure contractors are well-equipped to offer financing options effectively, thereby boosting their ability to close deals and grow their business. This comprehensive approach, from generous funding limits to dedicated support and training, underscores Watercress Financial's role as a pivotal partner for contractors in the home improvement sector.