Should you just rely on customers making purchases with credit cards or should you look into offering customer finance options?
The answer is that financing consumers and giving them options when it comes to making payments will not only make them happier, but more loyal customers to your business. While accepting credit cards has long been a necessity for any business, offering financing to consumers brings a whole new level of opportunity. It can be used to effectively increase sales and drive revenue to your bottom line.
But Which Program is Best for My Customers?
Customer finance programs come in many varieties. They can be customized to fit your business. Whether you’re a one-person service or a large retailer, program options can help zero in on exactly what you and your customers want and need. Customer finance often carries lower interest rates than the “written in stone” rates credit cards demand. In some industries it’s standard procedure to offer no interest for up to 2 years. That can bring a major increase in purchases, especially if you sell pricier items or services.
Consumer finance can also lengthen the time needed to pay off a purchase. Customers can stretch the payment schedule over several years. Just think of automobiles and homes where payments now go for 5 or 6 years for the former and 30 years for the latter. Again, if what you’re selling is beyond the amount of cash a consumer has on hand, financing of this nature is almost a necessity.
How Does Financing Consumers Help My Business?
While many people still make big purchases with credit cards, a large part of the population is trying to keep credit card debt under control. They are much more likely to make a big purchase using consumer finance you offer.
Finance in retail can also be seen as an attractive benefit for customer service. Shoppers will see it as a major reason to buy from you as opposed to other retailers, even the very largest. In this way, a great finance program can help build your brand creating a great deal of good will among the public.
Over the time the customer is paying off their purchase, they are frequently reminded of your business. This is free advertising that keeps your brand top of mind. You can expect additional purchases over the payout period as the customer comes back again and again to buy more.
At the end of the day it makes the most sense to offer both: accept credit cards while offering your own customer finance option.