Consumer financing is a major difference maker when it comes to closing sales. Studies show that 76% of customers are more likely to make a purchase if they have a simple and straightforward payment plan available. Regardless of the particular field your business is in, you should recognize that customers want — and in many cases, need — solid financing options.
Part of the motivation in offering financing is to establish a long-lasting relationship with your customers. When you offer them financing, you are building a foundation of trust. You’re telling them that you want their business and that you’re willing to assist them in order to get it. It’s a step beyond the usual retail experience that new and existing customers are sure to appreciate.
But beyond that, consumer financing plays an important role in increasing your overall sales and revenue. It’s an essential part of the economy, and a key factor in influencing many consumers to make a purchase. To understand why that’s the case and how it can benefit your business, we first need to explore the role that financing plays in purchasing decisions and the thought process your customers engage in when deciding whether to buy your product or service.
A Payment-Based Economy
Over 70% of Americans have less than $1,000 in savings, and a staggering 45% have no savings at all. Exploring the reasons for this would require an in-depth economic analysis far beyond the scope of this article. But suffice it to say, the large majority of consumers have very little cash stashed away.
Ours is an economy based on payments. Consumers incorporate new payments into their financial planning as they pay off older loans and credit cards. For these individuals, financing isn’t just something nice to have, it’s an essential part of the way they make purchase decisions.
Consider the following scenario. A customer is out shopping for a new sofa. The first furniture store they stop at has good customer service and sells exactly the piece of furniture they’re looking for, and it’s even discounted a little bit. The price point is just about within range, but the store doesn’t offer financing, which means the customer would have to pay everything upfront.
They bookmark that option in their mind and head to the next store, where they find the same sofa, at a slightly higher price. In this instance, however, the store offers financing. So, although the sofa will cost a little more over time, the customer won’t have to pay for it upfront, freeing them up to spend their money on other, more important things.
In the end, they go with the option that allows them greater flexibility, despite the difference in price. Because many customers have limited savings and often live paycheck to paycheck, this exact scenario occurs more often than you might think.
Get Your Money Upfront
Offering financing doesn’t just make things easier for your customers; it’s also simple and easy for you. By using a smart solution like FormPiper for the application process, you’ll save time and avoid the annoyance of duplicate data entry. When your customers decide to go with the financing route and get approved, that ensures you will get your money upfront, and you won’t have to worry about it from there. Your business will receive the funds and the lender will take on the responsibility.
Meet Your Customers Where They Are
Offering financing is no longer a nicety, something that’s good to do but not essential for your business. In today’s economy, where payments over time for big purchases are the norm, not offering consumer financing is the equivalent of leaving money on the table.
By working with a trustworthy company like Financing Your Way to provide consumer financing to your customers, you are setting yourself up for success and giving your customers the flexibility they want and expect. Offering consumer financing is the right choice if you want to match up with the competition. And checking that box means all the other standout characteristics of your business — from great customer service to an exceptional product selection — will stand out even more.