One way to make sure that you are getting as many customers as possible is to offer consumer financing to customers who may not be able to pay for their entire purchase or the service that they need and who may have a hard time with getting the loans that they need from other sources. So, what exactly is consumer financing and what are some benefits of it?
Consumer Financing Defined
Consumer financing is a loan service that you offer onsite with the help of a finance company with whom you have partnered. Consumer financing doesn't work for every business. However, there are a lot of business which would benefit from offering consumer financing. Those can include dentist offices (so that patients can get the pricey treatments that they need when their insurance only covers part of it or none of it at all), furniture stores, and funeral homes. If you own a business that would benefit from partnering with a finance company so that you can offer consumer financing, what are some of the benefits to doing so?
Benefits of Higher Conversion Rate
This means that you are going to get more people buying than just browsing. Say that Person A really wants to buy that giant TV and surround sound system to go with it that they keep coming in and looking at, but they can't afford the payment. That means that they aren't going to be making a purchase, and will just keep looking at what they want. However, if you offer a buy here/pay here or 6 months free with financing kind of plan, then they can take advantage of that by signing up for it and use that to get the TV and sound system. You've converted a browser to a buyer.
Benefits of Larger Purchases
Another reason to offer consumer financing to your customers is that it makes them more likely to make a larger purchase. If Person B wants to get a $500 TV but then they sign up for your finance plan, they are more likely to move up from that $500 TV to the $800 TV that they were really wanting in the first place instead of settling for the one that they thought they could afford. That puts more money in your profit column.
If you are in a business that would benefit from consumer financing, then you may want to look at what it would take to to get consumer financing program implementation.
