How Things Will Change The Way You Approach Customer Financing

Customer financing has now been growing in the market in certain niches such as auto, furniture, etc. You might have seen automobile businesses promoting financing on television, but we have seen businesses hesitate to adopt customer financing for their business due to the risk associated with them. However, customer financing can help you retain customers if done right.

If you are facing issues of retaining customers or customers abandoning your cart, customer financing can help you to a great extent. We have curated a guide that will change your approach and viewpoint towards customer financing.

How Will Customer Financing Work On Your Platform?

There are several payment options available on the websites such as debit card, credit card, cash on delivery, etc. When a customer visits your platform to make purchases, they finalize a product but later drop it in the cart due to lack of balance in their account or the product being out of budget. This often leads to losing a potential customer for the business. To reduce the chances of abandonment, customer financing comes in handy. You can offer products to customers by allowing them to pay in installments with some interest rate. These installment payments may range from 6 to 24 months, you can either have an in-house financing option or connect with a financial broker or third-party customer financing services.

Here Is A List Of Reasons That Make Customer Financing The Best Way To Attract More Customers:

Drive sales: There are chances that customers might have researched about your product. Even if they don’t, when they visit your platform to buy a product, only to find out that product is not in their reach. They will either drop the product in the cart or look for other options to buy the product if your website does not have other financing options, you will lose customers for your business. Offer customer financing to your customers to retain customers for a long time. Moreover, you will drive more sales and reduce cart abandonment by your customers.

Boost trust and loyalty: By providing consumer financing options to your customers, you will not only develop a sense of loyalty, value, and trust among customers. When your customer gets products in their budget requirements with available financing options, they will feel satisfied. A satisfied customer is most likely to return to your platform whenever they need something from your niche. Moreover, they might become brand advocates and refer your brand to friends or family. This strong relationship between customers and your brand will take you a long way in building a strong and loyal customer base through customer financing services.

Fast payments and cash flow: If you are not using the in-house financing option, you can use third-party consumer financing options which means you get upfront payment for purchases, and risk for lending will be handled by a third party. The more purchases you will have, the more payments and cash flow. Thus, improving your revenue and growth. Financing for customers using third-party customer financing services is one of the most beneficial approaches that can help you gain more customers and reduce risk. The upfront payment provided by a third party for customer financing can improve your cash flow. Upfront payment means financing or money to purchase products will be offered by a third party, they will charge interest from customers, and you will receive an upfront payment from a third party. However, these factors depend upon the services you take for your customers.

Low-risk solution: Customer financing options with financing brokers or third-party financing companies can be a low-risk solution. You can build strong relationships with financial brokers for financing your customers. Having brokers will give you more stability for customer financing as the risk of lending would be handled by these brokers. You can receive the benefits of financing options and reduce risk chances, which help your business grow. The lower risk you take, the more you can improve your business.

Free financing options: Some financial brokers or third-party customer financing companies charge money to provide financing options, while some do not charge extra from you. You add financing options for customers without providing charges.  These free financing options reduce your investment cost and provide additional services to your customers.

Conclusion: customer financing programs are a great way to improve your leads and reduce your cart abandonment. Moreover, if you approach third-party customer financing, the risk of lending money will also be reduced. Businesses consider financing for high-end or expensive equipment. However, even if you offer products or services at medium or low range prices, customers financing can change your sales and order value. Therefore, consider adding a customer financing option to improve your business and user experience.