We are seeing it in more businesses than ever these days, financing available. Having an effective pay-over-time option may increase the likelihood of customers making a purchase. Letting the customer know they can break their large purchases into smaller payments at lower than market rate interest rates entices them to spend more than they would all at once. The flip side of this is that it also helps the consumer stay within monthly budgets and still be able to purchase goods or services that may be out of reach all at once. Below are 5 advantages of offering financing options to your customers.
1) Increase Average Sales
By offering customers the option to finance a large purchase, you can often up-sell on items they would like but previously assumed were out of budget. A recent Forrester study found that when companies began offering a point-of-sale financing program to customers, their sales increased by 32 percent! This simple option to split purchases encourages buyers to get exactly what they want and not only go for the essentials.
2) Increase Sales Volume
Not only will the average price of sales go up when offering financing, but the frequency as well. Having an integrated financing option within your POS allows the customer to make the split-second decision at the front of the sale and not have to go home and think about it. When shopping for big-ticket items, customers are prone to shop around and compare prices and often try and negotiate the price, but when the opportunity to finance said purchase is available, it alleviates the feeling of needing to shop around.
3) Improved Customer Experience
By offering financing options, your business becomes the contact who is looking out for the customers’ finances. You are helping them reduce large upfront cash outlays or credit line expenditures. You create flexible payment options to fit individual budgets and cashflows. You simplify the process for them by making one contract and payment for equipment, services, and other materials. Your business is the one delivering a digitalized experience, including fast credit approvals. When utilized correctly, offering financing places you at the top of the customer experience and will ensure customer satisfaction and, as a bonus, lead to customer loyalty.
4) Enhanced Cashflow
No more waiting around for contracts to be fulfilled after service has been provided. No more “the check is in the mail.” By Utilizing a financing service, you get paid when the sale occurs, and the customer makes payments to the financing company. This means your capital on hand is higher and up to date based on sales.
5) Increase Profit Margins
When someone sees a large lump sum, they are more likely to price shop. They’ll try to lower the price by slashing parts off of your solution. That is not the case when they see a monthly payment. When the large purchase is broken down into these smaller installments, their frame of mind shifts from the total cost to working it into their monthly budget.
Payment processing, financing, and integrated solutions are some of our specialties here at Peak Utility Brokers. There are many more than the above 5 advantages of offering financing options. If you have any questions about whether your business should provide financing, feel free to contact us here or call. 406-206-7992