The Top 5 Reasons to Offer Financing to Customers

Consumer financing is a hot topic these days. With inflation on the rise and the prices of many consumer goods unfortunately hitting record highs, customers are looking for options when it comes to purchasing goods and services from retailers in a wide range of industries. The economic uncertainties we’re living through currently mean that investing a lot of money upfront has lot a lot of appeal for many customers, including those who might normally make a cash purchase. Simply put, it’s a good time to have liquid assets – cash and assets that can be quickly and easily converted into cash – readily available.

But customers’ desire for financing options across a range of industries didn’t begin within the current period of instability; in fact, consumer financing has been a popular option for many years. There are a lot of good reasons for that. And, if you don’t have a consumer finance program already in place, there are a lot of good reasons why you should establish one.

So, without further ado, here are the top five reasons to offer financing to customers.

Offering financing will boost your revenue.

“Show me the money!” More than an endlessly quotable movie line, this quote speaks to an essential truth of any economy: Money talks. As a retail business owner, you probably don’t see a good reason to invest valuable time, training, and resources into programs and initiatives that aren’t going to have a positive impact on your financial bottom line, and that’s completely understandable.

In the case of consumer financing, the facts are clear: Having a customer finance program in place boosts your revenue, period. You are capturing all those additional customers who are only interested in making a purchase if financing is an option on the table. Conversely, if you don’t offer financing, you’re letting all those sales walk out the door. This is an easy one.

It will help you build trust.

Almost any business model involves establishing a certain level of customer trust. Take, for example, a fast food restaurant: The customer must be able to trust that the establishment is reasonably clean, that the food is prepared safely, and that their order will be correct. Failure to fulfill those expectations marks the restaurant as untrustworthy.

In the same way, customers have expectations of retailers, and a major one is that they will offer financing as an option for the purchase. By providing that option, you are demonstrating to your customers that you care about their needs. Trust is central to the customer relationship, and offering financing is a great way to start building it.

Everyone loves flexibility.

If you went up to a food truck and discovered they only had a single menu option, wouldn’t you find that a bit odd? Or if you walked into a convenience store and discovered that all of the drink coolers were filled with different sizes of the exact same beverage, wouldn’t you start looking around for hidden cameras and wonder if you were on a prank show?

It’s just the way most people are these days: We expect options and we love the flexibility of being able to choose between a large number of them. The customers shopping at your retail business are no different. Maybe they don’t walk into your shop with the intention of using financing to make their purchase, but just having that option on the table will make them feel good. It shows that you understand that all of your customers are unique, and that you’re looking out for all of them.

You will distinguish yourself from the competition.

Let’s say you have some competitors who don’t offer financing at all; in that case, just having a financing program in place will set you apart from the competition and distinguish you in the minds of your customers and potential customers. Now let’s take it a step further: Let’s say your competitors offer financing, but don’t bring it up to every customer, every time. The advantage is yours again. And another step: Let’s say you and your competitors both offer financing and both mention it every time, but your employees are better trained, you have the tools you need to simplify and automate the application process, and you make things easier for your customers than the competition does. You’ve distinguished your business yet again. Congratulations.

Modern solutions make it easy.

Speaking of modern solutions, you don’t have to deal with a slow, labor-intensive application process that involves your employees duplicating data entry for every lender. A waterfall solution such as FormPiper automates and streamlines the consumer finance process from A to Z.

By leveraging the latest technology and the FormPiper solution, which features convenient all-in-one reporting and managed or self-managed services, you’ll be well-positioned to make the most of your consumer financing program without pouring too much time or energy into it. That ease of use makes a big difference, and it is yet another great reason why you should prioritize establishing a robust consumer financing program for your retail business.


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