Financing is a very crucial factor for any business. Be it financing the business itself or the customer end everything requires definite plans and policies. A business with good financial stability often presents an espousing hand in marketing and sales.
After a business is established one important thing that business owners need to keep in mind is the needs of their customers. Businesses must ensure to curate the model they follow in such a way that it sticks to the needs and demands of the users. The best way to proliferate the business module is by using good financing options. Often individuals tend to keep away from certain products or do not become buyers is the price associated with the product.
This needs to be avoided, and more flexible options should be provided to the customers to make them potential buyers in the long run. This can be achieved by consumer financing. This helps to increase sales and improve the credulity and loyalty of the customers and the business.
Let us see how consumer financing helps the business.
What is customer financing?
Consumer financing helps the customers acquire more than one finance option. The customers do not need to pay the entire sum of money in a single go and can divide the payment according to their payment options and needs.
This helps in increasing the sales as more individuals are inclined towards buying the products rather than just browsing them. If you are someone who needs such options this financing option can be the best for you. Let us learn more about how to offer the financing and how it can help in improving the sales of the company.
How to offer customer financing?
As we know customer financing is all about providing multiple payment options to the customers to convert them into buyers. One best way to offer customer finance is by applying a segmented payment option. This involves dividing the total cost of the entire product into different parts and paying it over a period with a small interest.
For example, a $1000 product can be divided into $100 for 10 months, or $200 for 5 months, plus a small interest rate. This allows the customers to buy the product at their continent price and not lose the opportunity to buy new things.
This helps the merchants to convert browsers to buyers and earn more money in every product and sale. It also helps in receiving customer loyalty. It is observed that more than 15% of customers used the option at the end of the sales and have confirmed to use this service again whenever required.
If this sounds a good option and also beneficial it never hurts to know how to provide these services with ease and convenience. Let us see the two different options through which you can offer customer financing to your customers.
- This includes in-house credit checks, offering options for finance, and collecting the payments according to the payment procedures. This is quite a tedious task as it is bound by legal procedures and marketers need to follow a set of rules and regulations to undergo the procedure of finance. Along with legal liabilities related to lending, this also involves the security of the customer information. In the end, this is a time-consuming process.
- The second option involves collaborating with a third-party finance provider. These providers take care of all the credit checks, lending, and collection of money according to the period assigned. They help marketers provide a wide range of finance options that the customers can use to make their purchases easy and convenient. This also helps to take away all the legal proceedings that are related to financing and only a few of the work is associated with the actual business.
The second service is most widely used due to its convenience. Marketers choose a throw party trusted finance provider that works in collaboration with the marketers to provide customer financing options at the time of the purchase. This saves a lot of time from the marketer’s end and the system is also quite easy to set as the legal associations are very low compared to opting for in-house options.
So, are you interested in knowing how this works? Let us walk you through the process.
- The customers choose a certain product or service they want to avail themselves from the company.
- Once the product is selected the store owners can provide the customer with the options to finance their purchase. Here the marketers need to make sure that the customer finance option is well marketed among the customers and they know what benefits they will receive if they chose a certain option for finance. At this stage, the finance provider looks for credit checks.
- As the basic information is filled in and all the procedures are completed the customers will know within seconds whether the customer is eligible for the finance and whether they are approved of the option they chose.
- As the finance is approved the customer receives the product or service and the marketer gets the entire payment of the product through the finance provider.
- The period over which the customers pay, the interest rates, and other terms and conditions are provided by the finance provider as owe their convenience and market deals.
- The customers need to pay a small interest or a certain percent of the product price to the finance provider. In some cases, the marketers also need to pay a certain amount in case the purchase is done, or if you have this option in your stores.
Ultimately, finance will proliferate the sales and help in converting browsers to buyers. Marketers must know all the details related to financing before providing the services in the stores. They must also choose a trusted service provider for the same as the business can be tricky sometimes and involves money and payments.
If you are sure you want this in your stores, go ahead and include the option today.