The ability to offer consumer financing has proven to be an effective growth tool for businesses of any size. In fact, 50% of businesses that don’t currently offer a consumer financing option are considering offering at least one. This is due to the fact that improving a consumer’s buying power is one of the most effective ways to increase the likelihood and value of a purchase.
It is important that businesses understand why they should consider offering consumer financing solutions for their customers. Several benefits make it a lucrative option, and we are going to go over:
- The benefits of offering consumer financing solutions
- The best financing options to offer consumers
- How to offer consumer financing solutions
The Benefits of Offering Consumer Financing Solutions
There are many benefits that come along with offering consumer financing options. By giving consumers more flexible ways to pay, businesses give them the freedom to buy what they want, when they want.
This manifests in the following ways:
- Higher conversion rate
- Higher average order value (AOV)
- More repeat business
- Improved customer satisfaction
Higher Conversion Rate
There are many customers out there that allow upfront costs to keep them from going through with a purchase. By allowing them to easily break up their bill into a few different payments, merchants can make it more affordable for them in the short run to buy. This leads to an average of 20-30% increase in conversion for businesses that offer consumer financing.
Bringing in more customers is useful in itself, but consistently increasing the AOV of consumers can be even more valuable. This is because it often leads to consumers buying more premium products with better margins or purchasing in higher quantities, making investing in inventory less risky for businesses. Both of these can significantly improve profits. Luckily, businesses that offer consumer financing solutions see an average 30-50% increase in AOV.
More Repeat Business
Offering unique value in the form of flexible payment drives many consumers to come back and purchase again. When consumers have the choice between retailers that don’t offer consumer financing and those that do, they will likely go with the retailers that make buying easier.
Improved Customer Satisfaction
Customers feel taken care of when they are given more freedom to purchase what they want and need. Consumer financing solutions not only offer financing but also make payments easier and faster. This leads to more satisfied customers, which is a significant benefit for businesses that can take advantage of referrals.
The Best Financing Options to Offer Consumers
The best consumer financing solutions offer multiple forms of financing. While installment financing is obviously the most important, many customers like using the forms of financing they have already become familiar with. As a result, businesses should be able to offer:
- Installment financing
- Credit Cards
- Consumer Loans
Installment financing is a relatively new form of financing. While it offers many useful advantages over traditional forms—like reduced credit impact, low-to-no interest, and more flexible credit requirements, some consumers still avoid signing onto agreements that they aren’t as familiar with. As a result, businesses need to be able to offer all of these forms of financing to ensure that they attract as many buyers as possible.
The easiest way to do this is to choose a fintech platform that offers all three. Luckily, Skeps does that and more.
Offer Consumer Financing Solutions and More With Skeps
Skeps offers a comprehensive, end-to-end consumer financing program that helps businesses modernize their entire payment process. We go above and beyond one-click payment, also offering a one-click application process for several different types of consumer financing, including:
- Installment financing
- Store credit cards
- Consumer loans and leases
If you’re looking to partner with a forward-thinking fintech company that will keep consumers' eyes on the purchase while offering best-in-class financing, Skeps is the perfect fit.