8 TACTICS TO INCREASE CONSUMER FINANCING
If you’ve been watching television lately, you’ve probably seen how heavily auto dealerships and large box merchants promote financing deals. For years, these guys have offered consumer finance on significant purchases, and for good reason.
Consumers can break down large purchases into manageable weekly or monthly payments with financed sales. This makes the products more accessible, allowing a larger audience to purchase them, resulting in increased revenue.
Customer finance has always been a competitive advantage held by a select few, but there is good news for small firms. The game is evolving as a result of advances in financial technology services.
Companies can now provide immediate credit determinations to customers at no additional cost because of advancements in financial technology services. These turnkey financing programs provide all of the advantages of an in-house credit system without the risk or the costs of deployment.
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Many companies, large and small, are pushing consumer finance solutions as a way to entice customers to buy and perhaps improve order value and complete sales. Consumer financing has increased and will continue to grow, and businesses that do not offer consumer financing may see sales decline as a result.
8 tactics to increase consumer financing
Consumer financing offers advantages for every size of business. Here are some of its benefits.
1. Low-risk options for your company and customers
You and your customers will be safer if you have a solid professional relationship with a trustworthy loan broker. Finance applications submitted by your customers will be considered by a reputable brokerage based on numerous criteria to determine their ability to honour payments. This reduces your customer’s financial risk, resulting in positive feedback and ratings – as well as referral business.
2. Take control of the sales process
There will be occasions when your buyer has done their homework, selected your firm as their favorite provider, and arrived at your location with their ideal purchase in mind, only to discover the product is out of their price range. It’s possible they didn’t include in the additional administrative or installation fees, and the deal falls through.
Offering a consumer financing option has the advantage of providing the ideal financial solution while removing the burden of the unknown for both you and your customer. When you use a consumer finance option, you may go about your business as usual; after an application is granted, payments are handled fast, and the sale can proceed.
3. Increase the number of customers
The financing brings in additional clients, as evidenced by numerous studies. According to a recent Forester survey, firms that offer to finance sell 20 percent to 30 percent more than those that do not. If you don’t offer to finance, you’re likely to lose business to a competitor who does.
4. Boost your sales
You enhance the likelihood of generating more sales and larger sales orders by offering a consumer credit option to your consumers. This is especially true when clients are considering making a large-ticket purchase. The possibility for your consumer to pay overtime rather than needing to take out a loan becomes a major motivator in your customer’s decision to buy. Offering a customer credit option is a statistically demonstrable way to boost sales dramatically.
5. Increase the monetary amount of sales
When a business offers consumer credit, the average order size increases by 15%, and 93 percent of first-time consumer credit customers say they will use it again. Companies that provide financing options improve not only sales but also the average order value of a sale. This is especially true in the case of aggregator finance.
Consumers are frequently unaware of their true purchasing power and are surprised to learn how much they are entitled to borrow. Consumers who have access to this information are more likely to spend more than they had expected.
6. Increased Customer Loyalty, Trust, and Referrals
Experience-driven firms have a 2x higher year-over-year growth in customer retention, repeat purchase rates, and customer lifetime value than other businesses.
One of your aims, if not your primary goal, as a business owner is to provide a service that is memorable to your customers, resulting in loyalty and trust. Customers will be more likely to return and, more crucially, suggest your services to their friends and family if you provide them the option of financing their purchase through a consumer finance option. In reality, a few delighted customers can lead to a slew of referrals, and repeat business is more likely if you’re ready to offer flexible payment plans and fair prices.
7. Increased Cash Flow & Quick Payments
One of the most significant advantages for business owners is that sales payments are completed fast after the loan is approved. That implies you’ll be paid in full upfront for the purchase, with the lender bearing the risk of a payment default. You don’t have to put your company’s cash flow at risk to support financed sales.
8. It Is Costless To Provide Financing
While some consumer finance choices may incur monthly or transaction fees, the proper finance solution will provide free financing. You may eliminate transaction fees generally linked with credit card-based finance solutions by using a finance aggregator service and you can also earn extra cash from bonuses you receive every time a customer secures finance through the aggregator.
Summing it up
Customer experience should be one of your top goals as a company if it isn’t already. Customer experience is a broad term that encompasses a variety of interactions between your company and its customers. The satisfaction of choice is one of those experiences that customers value greatly, and with that comes the expectation that an option will be available. If you don’t provide consumer financing, you’re likely to lose business to a competitor who does.