5 WAYS TO ATTRACT MORE CUSTOMERS—AND MAKE MORE MONEY
In conversations with hundreds of retailers every month, and one topic emerges in nearly every conversation: too many customers leave the store empty-handed because they didn’t qualify for credit.
The retail business—a nearly $6 trillion per year market in the U.S. has plenty of opportunities. Here’s the opportunity many merchants miss: OFFERING ALTERNATIVE PAYMENT OPTIONS.
Consumers who walk into a store have credit of some kind. Data shows that 80%-90% have some credit. Information also reveals that nearly half of those customers (45%) have credit that’s rated subprime.
Credit is a sensitive subject for many people, most of whom don’t enjoy mentioning their low FICO scores. That means broaching the subject without embarrassing anyone. It may also require offering no-credit alternatives to potential buyers with plans like lease-to-own options.
Here are five ways to attract more customers and boost your sales using alternative financing
- Advertise your options. Make clear in your marketing that you offer “no credit needed” financing. Some mention of that option should appear in your print and digital ads, your website, and your point-of-sale material in the store. Don’t leave it to chance. Customers will hesitate to ask about “no credit needed” if they don’t see it offered.
- Explain the easy access to credit. Consumers with bad credit histories can still qualify. In most cases, all they need is a job (and a 90-day record of employment), a bank account (90 days old or more) that features direct deposit of at least $1,000 a month, and a valid ID.
- Show how it can build credit history. “No-credit-needed” plans like a lease-to-own option lets people build payment history—and allows those without any credit history to begin to establish one.
- Point out the advantages of cheap capital. Paying off a plan within 90 or 100 days oftentimes incurs just a small fee. That’s less than most people who are a great credit risk (i.e., a FICO score of 800) pay for any kind of credit. And its much better than the 22% credit cards charge annually, or payday loans, which are often 200%+ interest rates. Research tells us that 35% of buyers who use no-credit financing pay it off within 90-100 days.
- Enable Customers to augment their purchasing power. Armed with cash but damaged or no credit, many customers walk into a store with a particular purchase in mind. Lots of them walk out again because they can’t figure out how to make that purchase work. Help them by explaining how they can finance that nicer mattress or set of radials, partly with cash, partly with a credit option. Offering payment options to people with limited credit is an easy way to lift sales and to upsell into better items.
It’s hard enough attract customers, don’t give them an excuse to leave empty-handed.