Almost 60% of British consumers see checkout finance as an ideal budgeting tool, so there’s never been a better time to make retail finance work for you.
When sold correctly, consumer credit can help increase conversions by up to 70%. But what exactly is credit? Let’s take a closer look.
What is consumer credit?
There are two main types of consumer credit you can offer to your customers:
1. Interest free credit
Interest free credit lets customers spread the cost of a purchase over a set period of time, with you, the retailer, paying a fee to the credit provider. This is usually offered on high-margin products where your profits are not significantly impacted by paying a fee to your credit provider.
2. Interest Bearing credit
With interest bearing credit, customers will spread the cost of a purchase, plus an additional percentage of the full price, over a period of time. Since you, the retailer, are getting the full order value, this can be offered on lower-margin products as well.
Whichever model you choose, retail finance is just like any other product. In this video, we’ll share our top three keys to selling retail finance.
How to sell with finance
Step 1: Define your credit strategy
Think about why you’re really offering finance. Is it to attract new customers, generate new revenue or challenge the competition?
Some retailers see interest free credit as eroding their margins by focusing on the subsidy they need to pay the provider (like DivideBuy), instead of the fact they’re generating new revenue.
For example: if you’re selling ten items at £1000 with no credit, you’re making £10,000. But with credit options increasing conversion by up to 70% (based on results delivered by DivideBuy), even after fees, you still earn over £16,000. That’s £6000 of incremental volume you’ve earned by attracting new customers.
When you become a DivideBuy retail partner, our experts work with you to find the best credit strategy for your business. We’ll look at how much you should offer, at what price points, to make the proposition as appealing – and beneficial – as possible.
Step 2: Market your credit offering
Once you’ve clearly defined your credit strategy, it’s time to spread the word.
Social media is a powerful marketing tool. You might already be using it to promote your business, but when you’re posting, are you mentioning interest free finance and spreading the cost?
Are your retail finance options visible on all your paid ads – and are there links to your credit landing page for customers to click through? Doing this will drive more traffic to your website, where the next step in your conversion journey comes into focus.
At DivideBuy, we give our retailers a wide range of marketing support – from branded resources and tailored insights, to featuring you on our website and promoting you via our content.
Step 3: Streamline your customer journey.
Make your customer’s credit journey as simple, easy and attractive as possible. Does your finance provider offer soft credit checks ahead of formal application? If buyers know they can check their eligibility for finance, without hurting their credit file, they’re much more likely to apply.
DivideBuy’s Eligibility Checker tool can be advertised at multiple customer touchpoints enroute to checkout. It lets potential buyers find out if they’re likely to be approved for the amount they want to borrow in advance – and is a great way to empower responsible credit purchases.
You can also use our Convert+ tool to show customers how much they would pay monthly over different time periods, and set minimum spend thresholds to upsell to customers.
We’ll give you exclusive retailer access to our Asset Library. Use our banners, pop-ups, and graphics on every page of your website to promote your credit offering.
Hopefully, this guide has given you a better understanding of practical ways to sell credit to your customers – and how DivideBuy’s solution can transform your conversions.
To find out more, book a demo with us today.