As we've discussed in some of our other guides, retail finance is an excellent method of converting more customers, and there is also much that you can do to boost approval rates once these individuals have embarked upon the customer journey.
Yet retail finance is, in itself, also a powerful tool for customer acquisition, and a proven winner when it comes to boosting the value of your customer’s shopping carts too. To help you harness this power, we've put together a handy list of tips to make retail finance work better for you.
1. Get it in there early
In visual terms, introducing the finance offering to customers early is proven to be far more effective. Add a line under any prices on your site saying, “Or X monthly payments of £X” and watch your conversion go through the roof. Provided the APR is competitive (or even zero), splitting the cost of a purchase into smaller amounts makes the purchase much more attainable. You have mere milliseconds to engage and win over an online user, so it is vital that you don't miss your chance to convey this valuable credit facility to them.
2. Refine - and double refine - your customer experience
Optimising your customer experience should be a high priority. Are the product images on your site of high quality? Are the products alluringly presented? Is it easy to navigate the various pages? And is the customer journey slick? Equally, it's vital that key information and customer support complement such features effectively - particularly with respect to retail finance. Do you have a wide-ranging set of FAQs, and are they concise and easy to understand? And, crucially, are your sales and customer service colleagues fully trained on retail finance? If you haven’t already, it’ll really pay dividends to focus on each of these areas.
3. Co-brand the retail finance customer experience
By co-branding the customer experience, you can ensure that the customer feels safe and secure all of the way through the journey. A cold hand over to another brand (i.e. to a retail finance firm) can result in a customer questioning who they are dealing with, whereas by having your branding present from start to finish gives the customer the confidence that they are dealing with a firm that you have a formal arrangement with, thus increasing the likelihood they will complete the application.
4. Slim and trim application process
Take another look at your retail finance application process, and ask yourself: is every step that's in there really necessary? Can the form be trimmed down? You shouldn't need much more detail than the customer's personal details, income, employment status and contact details. Focus as much energy as you can on streamlining the application form (be ruthless!) and keep the number of required clicks and pain points to a minimum. You may just be surprised at how much conversion improves by as a result.
5. Automation, automation, automation
One of the key drivers behind higher conversion is greater automation (i.e. fewer referrals). A vital criterion when assessing which lender you want to partner with should be their automation rate. Can they provide the cutting-edge technology needed to drive automation? You should also seek to pave the way for repeat customers to acquire retail finance without any friction. If they've proved themselves to be creditworthy, and are demonstrating loyalty, then there is no reason why this shouldn't be reciprocated with instant, one-click approvals.
Digital brings with it immense opportunities, but marginal gains are harder to come by as marketplaces become increasingly competitive. Retail finance, however, can unlock whole new channels of customers - ones who see the benefit of flexible alternatives which allow them to buy now and pay later; safe in the knowledge that these future outgoings will not place undue strain on their monthly budgets.
Building a high-end retail finance offering, and presenting it effectively to your users, can deliver the sort of market penetration and return on investment for your online store that few other initiatives can match. At Lending Works, we believe we have all of these angles covered, and more. To find our more, click here.