How to Increase Sales Loyalty With Consumer Financing
After starting a business, most owners are concerned with how to keep it up and running. In order to have a successful company, you have to adapt to the needs and budgets of your consumer base. For some corporations, offering business to consumer financing is one way to increase customer loyalty and bring in more sales.
What is Customer Financing?
With customer financing, your customers enroll in a payment plan, rather than paying the entire price of an item upfront. For those people who are simply looking around your store, this could make the difference between them considering it and actually purchasing a product. It provides them with a way to afford your merchandise.
There are two ways to offer consumer financing:
- Outsource to a third party that collects the payments
- Use a platform that enables customer sign ups where you manage financing in-house
The choice comes down to your business’s preferences and circumstances.
What Are Customer Financing Companies?
If you would rather leave business to consumer financing to the professionals, then a third-party company suits you. A financing company works with you to develop payment plans that make sense for your products and for your consumer base. The companies will pay you the entire amount for an item and then they collect the payments and any interest from the customer. This lessens your risk and increases your revenue right away.
Third party financing companies will complete credit checks on your customers. Usually, the companies will offer consumers different programs that align with their score. In order to find a good financing company, you should have some idea of the average customer’s credit score so that you know you’re choosing a company in that range.
What Is In-House Financing?
In-house financing allows you complete control over the customer financing. You can use digital platforms for customers to apply for financing at your store. The process is quick and you don’t have to deal with an intermediary. For businesses that don’t mind the extra work and want complete control, this is the best route to take.
When it comes to business to consumer financing, it is a fair way to draw in customers. If a consumer is considering a big purchase, the lack of financing options might turn them away. In fact, if your competitor offers financing options, you could lose business simply because of that. Sales loyalty is more likely with customer financing because it gives consumers options.