How Consumer Credit Can Increase Sales for Your Business
Increasing sales is the first step towards increased revenue. It’s also the second step and most of the steps after that. The problem is, that the first step is the hardest to take. You can’t just force people to buy your products, nor would you want to. You want them to need what you’re selling and not feel bad about spending money to get it. This is where consumer credit can be so helpful; it eases the burden that customers feel when handing over cash or swiping a credit card. By letting customers pay over time, they’re able to budget better and not experience buyer’s remorse, making them far more inclined to make a purchase.
A Good Lending Practice
So many loans have some sort of “gotcha” clause, forcing borrowers to pay far more in interest and fees than they had planned. When you offer your customers a credit line, you’re not making any extra money off of the loan itself. The actual lending company often makes no money off of interest. Consumer credit simply allows people to buy something now and pay for it later. Customers love that kind of offer and they’re fairly likely to take you up on it. What’s more, they’re also more likely to purchase multiple items if they know they can pay the balance over time. Given the option between paying $100 outright or $300 over six months, many shoppers will opt for the latter.
All of this is possible because lending companies will offer consumer financing as a promotional tool. Instead of planning to make money from high-interest rates, they use the service as a means of advertising. Yes, consumer credit does come with interest fees if a customer doesn’t meet the terms of the financing, but as long as dues are paid in time, buyers won’t pay a cent above retail price.
Retailers Get Paid Upfront
If you’re thinking this practice might leave you waiting on your money for months and months, you can let go of that concern. The lending company pays the retailer in full just a few days after the initial transaction and then assumes the responsibility of collecting from the consumer. Merchants collect in full while still making customers happy with the option of installments.
If incremental payments inspire customers to buy more, then consumer credit is a clear way to increase your sales. You can offer a worthy service that will both help people with payments and make them more inclined to spend.