Although cash-basis sales of products and services are critical to your business, you need to understand that offering credit has become just as important in today’s society. This is particularly true for big-ticket items and goods, seeing as many need and want them but have to deal with budget limitations. In other words, failure to offer financing options can result in a major loss of potential customers.
There are many reasons you want to incorporate merchant financing into your business, including the following:
A higher conversion rate could lead to improved number of sales
With financing, you’re giving consumers a way to have a much better and more pleasurable shopping experience, since it takes out the pain of on-the-spot expenses from the equation. This then increases the likelihood of customers not just making a purchase but buying more too. As a result, your business accumulates more revenue in a shorter span of time.
Security of guaranteed cash inflow
Since consumers have a higher inclination to buy more when they can make purchases through credit or financing, it can help you secure a regular cash inflow. Offering this type of payment method significantly reduces the risk of not having any transactions made at all. Just make sure that you keep things balanced by offering short-term credits, such as 60 to 90-day payments.
Better relationships with your customers
Allowing credit can increase your competitive edge over organizations that don’t offer this payment method. Consumers will feel that you have trust and respect for them when you give them the chance to purchase now and make the payment later. As such, you can create stronger relationships with them, which will then make them want to continue doing business with you.
Mixing financing into your payment methods can benefit your business, as long as you properly manage your credit policies and balance both cash and credit-financed purchases.