7 ways leveraging your retail financing programs can help your business
When customers have cash flow problems it kills sales. You’ve spent top advertising dollar to get them in the door, and your sales staff is doing everything right. But one too many times after they’ve sealed the deal, some customers don’t have the cash or credit to fund their purchases through traditional means. You could discount your prices to close sales – reducing profit margins and possibly put doubt in the customer’s mind about how valuable your product really is – or you can offer that customer retail financing programs, which increases revenue and average order size, decreases walkouts, and provides additional value to your product or service.
#1: Retail financing programs create loyal customers
You know that competition among businesses is higher than ever, and you are committed to investing in advertising to attract and retain a loyal base of customers. The return on this investment can be facilitated by retail financing. Did you know that more than 40% of shoppers prefer to shop at stores that offer financing options? And, retail financing helps keep the customer coming back. Studies have shown that once consumers have financed a purchase, the majority of them – 2/3, in fact – return to finance again.
Just consider the sales that could have been lost if these consumers did not have financing options to fund their purchases. Whether a customer has good credit, or is working to re-establish good credit, providing them with a means to purchase the things they want will create goodwill and good sales! They will remember the customer service you provided, and come back to buy from you again, and again. They’ll probably even refer their friends and family.
Look at how customer financing will grow your business:
- Allow customers to make purchases they otherwise might not be able to
- Give customers confidence to make larger purchases
- Open up new revenue streams that have been previously unavailable to your business
#2: Say goodbye to walkouts
How many deals have you lost by walkouts and turndowns? You’ve got an interested consumer that wants your product or service, but they just can’t make the math work. They turn around and walk out, and you just lost a sale…and maybe a customer forever, if they walk into your competitor’s establishment that offers consumer financing.
It’s time to stop blowing sales at the last minute because of customer financing problems. Don’t lose that customer’s business by letting them walk out and over to your competitor, earn that customer’s business by making it possible for them to finance their purchase responsibly. Many smaller retailers don’t offer retail financing. You have the opportunity to get an edge over your competition by offering retail financing options to your customers which will bring them into your store, and keep them coming back.
#3: Boost your average ticket with retail financing
Financing consumer sales so your customers can buy from you will drive more sales and increase the size of your orders. In fact, small businesses typically see an increase in average ticket size of 15% when they offer consumer financing. A customer with increased buying power will feel confident to shop, buy more, or upgrade to a higher level of product or service. Having the option of paying for their purchases at a later date will encourage them to feel free to extend their shopping, and pick up additional items they would otherwise leave on the shelf. If you offer your customers sensible “Financing Your Way” solutions, you will see an increase in your bottom line and customer retention.
#4: Finance in retail improves customer satisfaction
Offering financing solutions to your customers goes deeper than just increased sales and larger average orders. Customer satisfaction increases. You make them happier and they, in turn, buy more. They become your advocate. These happy customers will be your best marketers, by telling their friends and family what a great experience they had. They will sing your praises. The best part is, it’s advertising you don’t have to pay for!
#5: You will empower your sales staff
Retail financing is an invaluable tool your staff may need to close the deal. Give them the support they need to convert interested browsers into paying customers by providing the resource of consumer financing for those customers who need it, or want it in order to upgrade or buy more.
As customers are shopping, they are thinking about how they will pay for the product or service your salespeople are trying to sell them. If they feel comfortable knowing they have more time to pay for these, don’t you think they’ll be more inclined to say yes?
If the customer is low on disposable cash and does not have any deferred payment options, how successful do you think your salesperson will be in sealing the deal? Probably the customer will curtail their shopping, and the salesperson will miss out on capturing certain sales. Retail financing gives your salesperson more options to close the sale.
So, it’s clear to see the benefits retail financing provides for you, the business owner. Let’s take a look now at how it benefits your consumers.
#6: Flexible payment options boost spending power
Servicing all of your customers properly and respectfully includes offering them financing options. Retail financing can elevate their budget, and gives them a way to purchase what they really want, and not have to settle for something less than that.
#7: Retail financing programs are fast and easy
Many small business shy away from consumer financing because they think (falsely) that it is too hard and risky. Not true! Here are a few quick facts about retail financing:
- It gives your customers extended payment options, sometimes up to 60 months
- Financing amounts can go from just a few hundred dollars to $20,000 and more
- Approvals are fast, sometimes taking only a matter of minutes
- Same-as-cash options are available
- The entire process is easy and fast for both the consumer and the retailer
- No lengthy applications to fill out
So now you are 7 times more aware of how and why retail financing programs can help both you and your customers!