Once you are done with starting a business, the next thing you need to focus on is finding ways to acquire new customers, retain them and learn How to Convert More Buyers. And, to do this effectively, you need new ways to satisfy the needs and wants of your customer. Nowadays, many stores and online eCommerce websites offer several financing solutions to their customers to improve customer loyalty and increase sales. Consumer Financing can be a very effective financial solution to achieve that.
In this article, we will discuss everything related to Customer financing and How to Convert More Buyers and generate leads successfully for your business by providing Consumer Financing to your customers.
What do you mean by Customer financing?
Customer financing is a quite similar financial solution to the “Buy now pay later” financial solution. After enrolling in this payment option while checking out, the customer can receive the product right away and pay the payment amount over time.
This is quite an affordable payment plan for customers. Instead of paying the entire amount of an item, a customer can divide the payment amount into multiple sections and pay it over time. The merchant will receive the total price of the product at the time of checkout, and the customer needs to pay interest on the financing. The merchant will be required to pay a small fee for each transaction.
Sometimes you will see people at your stores or websites who are emotionally ready to purchase a product, but their financial conditions don’t allow them to do so. Consumer Financing is designed in such a way as to convert such visitors into potential customers.
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How to Convert More Buyers by Offering customer financing to your customers?
As I already mentioned, Customer financing enables a customer to purchase a product or service they want without paying the total amount upfront. After enrolling in this payment option, a customer can divide the total amount into multiple affordable and convenient sections and pay it over a while.
Studies have shown that Consumer Financing helps to improve conversion rates of a store and also increases the average order size of a customer. You can make expensive items more affordable for consumers with this payment option.
There are two you can choose to offer customer financing solutions to your customers. The first option is you can run all the credit checks then offer to finance to your customers. And finally, manage all the payment collection processes on your own.
This option may save some extra cash for you as you do not need to pay any transaction fee to any financing company. But this option demands a significant amount of time. You also need to take legal responsibilities as you have to handle customer credit details.
The second option is that you need to rely on a third-party financing company to do the financing. Here, the third-party company will take all the responsibility for credit checks, financing, and collecting payment amounts. In this Consumer Financing option, you are not required to deal with any legal responsibilities. But, you need to pay some fee to the financing company for each transaction.
Most businesses choose the latter option as this is less time-consuming and less hectic. To offer Consumer Financing to your customers using a third-party financing provider, you need to follow these steps.
- After purchasing a product or service a customer desires, he needs to choose the financing option while checking out. You need to make sure your potential customers know about this payment option. So, you need to work a bit on advertising at first.
- After the customer chooses the financing option, the amount details along with the customer’s details will be securely passed to the financing company for decision making.
- Here, the third-party financing company will assess the customer details and run some credit checks to figure out if the customer is eligible for the financing or not.
- Within a few seconds, your customers will know if their request is accepted or denied. Once the request is accepted, you will receive the entire payment of the item right away.
- Then your customers can collect their products. The third-party financing company you work with will provide your customers with the details of different installment options along with the amount of downpayment they need to make. The customers will repay the financing company depending on the installment options they have chosen.
- Your customers will require to pay interest on their financing and you need to pay some fee every time your customers choose this payment option.
- This is how you can offer the Consumer Financing option to your customers. This is beneficial for both your customers as they get more affordable deals. And, also for you as it increases sales of your store.
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Benefits of Customer financing
Now, let’s talk in detail about the benefits you can avail for your business using Consumer Financing.
- Increase sales: The primary purpose of integrating Consumer financing is to increase sales of your store by converting random visitors of your store into potential customers. By offering affordable payment plans, you will encourage more customers to buy their desired products. And, increase sales in your store.
- Gain loyal customers: With Consumer Financing,you will not only increase sales but also gain loyal customers. If your target audience is looking to buy expensive items then they will choose your store over your competitors as you are providing them with affordable financing solutions. This will encourage your audience to keep coming back to your site and eventually convert them into your loyal customers.
- This is a transparent process, unlike credit card services. There are no hidden charges. The interest rates are also reasonable. Here your customers will be fully aware of the amount they need to pay every month before the purchase. It is quite a safer option to choose from as compared to other financing options.
- The overall process is very fast. The customer does not need to wait for a long time before the approval comes. The process gets done within a few seconds.
Best third-party providers to offer customer financing
Several companies provide Consumer Financing to stores and merchants. Here I am mentioning some of my top recommendations that you can associate with.
Viabill is a financing company that lets small businesses offer consumer financing to their customers. After integrating Viabill in your eStore, you will need to pay a 2.90% fee per transaction.
Paypal is also a popular financing company that helps businesses offer Consumer Financing. Paypal credit service is free for those merchants who are already using PayPal as their payment option.
Financeit is a financing company that offers customer financing to purchase products or services up to $60,000. It can be a very good option for you as they do not charge any transaction fees. Once approved, you will receive the payment within the next 24 hours.
The cost of integrating Consumer Financing depends on the company you choose.
I hope this article helped you to learn how to Convert More Buyers and know what benefits Consumer Financing adds to your store and how you can offer these services to your customers. With proper implementations, you can convert your target audience into your potential customers and increase the conversion rate of your store. I have also mentioned some popular third-party financing companies that you can associate with.