Most large retailers lean heavily upon consumer credit to enhance customer purchasing capabilities. However, for the most part smaller companies have been unable to cash in on this benefit because of the supposed difficulties of implementing a program and becoming lenders. Statistics show that companies with consumer credit programs attract and make sales to significant amounts of additional consumers. Here is some important information about this lucrative sales option.
Consumer Credit Basics
Consumer credit functions similarly to credit cards. When customers are ready for checkout, they merely choose this option. Initially they will need to answer a few questions. Once they have been approved, transactions are simple and straightforward. As the merchant, you are paid for the sale shortly afterwards, and the lender takes over collection of the purchase price from the consumer.
The Advantages of Consumer Credit
The advantage of consumer credit to your customers is that they can make significant purchases of either one or several items and pay them off in installments. This often encourages them to spend more than they might otherwise feel comfortable doing, as the payments are spread out over a period of time. You not only benefit from increased sales, but you receive the full income from those sales very quickly. You can also entice consumers to make additional purchases by offering them special financing perks if they spend over a certain amount of money.
Selecting a Program
Some consumer credit programs are fee-based, but others do not charge extra for their services, so compare your options carefully before you decide on the program that is right for your business. Keep in mind that offering terms of 6 to 18 months to your customers will improve your company’s conversion rate. The option of purchasing what they need now and paying over time will also help your customers be more satisfied and loyal.
For more advice on implementing consumer credit for your business, get in touch with Aspen Capital Solutions.