There are many different types of consumer financing and different ways to refer to your program. You can call it “buy now, pay later,” “installment plans,” or “flexible financing” to name a few options, but no matter what you call it, your financing program can provide benefits to yourself and your customers.
Faster Payment Processing
Whether you handle the payments yourself or have a third-party process, you can get your payments faster through this method than through other types of payment processing. For instance, if you go through a third-party financing option, then you will be paid immediately while the third-party collects the payment installments.
Increase in Individual Sales
When your customers have access to consumer financing options, they can make bigger purchases immediately and pay them off over time. This means that the big-ticket-item that he or she has been looking at can be more available to them now instead of having to budget it in and save up for it later.
Promote Lower Costs
Because you can offer your customers a financing option, you can promote your big items at the lower installment payment rate than at the total. This can help your customers see that the things they want are within their price range and help boost your sales. For instance, if you are a retail store selling artwork, then you can advertise your most popular pieces as paying a percentage of the total every month with a deferred interest option.
Build Customer Loyalty
Giving your customers a chance to purchase the items that they want and need for easy monthly installments can help them come back the next time they need something. It can also help them be more likely to recommend your business to their friends and family. For instance, if you are a furniture store and sell one customer a new sectional for his or her home, then everyone who asks about the sectional will be given a review of the product and your business. The more satisfied your customer is, the more business he or she can refer to your store.
Offering your customers consumer financing options can be a benefit to both them and your company. When customers have longer to pay off big purchases, then they buy more and will even be more likely to refer your business to their family and friends. You can even use the payment plan as a way to promote lower costs in your advertisements and show people how affordable your products or services are.