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Merchants, you’re planning for growth. But are all your teams on the same page?
Sales and finance both play a crucial role in Retail Finance, but are their objectives aligned? If not, you could be leaving money on the table, or worse: giving away margin unnecessarily.
The Sales vs Finance dilemma
For sales teams, interest-free credit is a no-brainer. It helps close deals, increases order values, and attracts more customers. But for finance teams, it’s an ongoing challenge – it costs money and can squeeze profit margins.
If your growth strategy relies on market share expansion, 0% finance can be a powerful tool. But if profitability is the priority, offering it without a clear strategy can erode your bottom line.
So, the big question is: have you reviewed your Retail Finance strategy recently? Is it aligned with your long-term business goals, or is it just running in the background with no real strategic direction?
Making Retail Finance work for you
Interest-free credit doesn’t have to be an all-or-nothing approach. Used smartly, it can drive both sales and profitability. Here’s how.
Match finance to your goals
If increasing market share is key, 0% finance can be a great driver. But if margins are under pressure, consider offering it selectively on high-margin products or adjusting the terms.
Think beyond the checkout
Don’t just place a finance option on your website and hope for the best. Use it as a tool throughout your customer journey to drive conversions where they matter most.
Stay in control
Implement minimum spend limits, tweak your finance options, and use SKU-based pricing to allocate your finance products appropriately.
Be strategic with your finance options
A blend of interest-free credit, low APR options, and longer-term promotions can attract customers while protecting margins. Use your longer-term interest free products strategically to help you achieve your goals, whether that be unit sales, market share increases, etc.
Your finance provider: partner or problem?
A good finance provider should be more than just a payment facilitator – they should be a partner working with you to drive success.
If your provider isn’t helping you optimise your finance strategy, challenge them. Are they offering the flexibility you need? Are they helping you protect your margins while driving volume? If not, it might be time to explore alternative providers who will.
Retail Finance isn’t just a payment option – it’s a growth strategy. Make sure yours is working for you, not against you.
