Consumer financing is, effectively, a third-party lender insofar as the consumer is concerned; the lending institution and the merchant are the ones involved in the transaction. For you the consumer, it is the primary option for acquiring goods that you cannot (or will not) pay for in their entirety, upfront. The ability to pay over time is a proven method for businesses to increase sales and thus cash flow.

Consumer Financing Drives Sales

Studies have shown that consumer financing drives sales – there’s no question about their benefits to the business (and the consumer, by facilitating payment). Here are the numbers: 15% improvement in order value, and a 17% improvement in incremental sales. An added bonus to the business owner is that you actually see these payments, not over time, but all upfront from the lending institution; negating any cash flow issues that would otherwise arise from multiple lines of staggered payments.

A Most Effective Sales Pitch

Going more in-depth with consumer financing, one of the primary drivers of sales and larger orders is the approach of certain holidays. By being able to offer very popular deals such as the common one by PayPal and Billmelater: “No Payments or Interest if paid in 12 months”, you encourage more buyers.

To save even further, business owners should consider prioritizing the lending institutions that don’t exact a monthly fee for using their lending services in the manner above. Basically – look for free to offer deals, which means that the only payment that your business makes to the company is for the specific transaction from the consumer.

No Reason to Delay Offering Consumer Financing

If you haven’t gotten aboard this train yet – you’re losing money. The most reliable metrics show that there is a nearly 70% shopping cart abandonment rate across the business sphere for all different kinds of products. If you can corral even a few extra percentage points with consumer financing options, then it is certainly worth it.

Contact KPI today to learn more about consumer financing.