These days some businesses have introduced a new system of giving credit options for the clients, this is done as a measure to increase the revenue as well as their customer base. Business terminology defines this system as consumer financing. This arrangement is usually made between any financial institution or a bank and its clients for extending the credit of its customers. This also means that, a proper documentation is done with the signature (shows the consent of the client) which mentions that she/he has agreed to the terms and conditions specified by the financial institution and is ready to repay the specified amount. Before making the pledge, it is essential to fully understand the details of the agreement.
It is seen that those businesses that provide consumer finance programs have more benefits than those who do not have such schemes. It is primarily because this helps in making the business stand out from the other competitors, and would naturally help in attracting more leads from customers. The existing consumers too would be more than happy to continue as their status would also be upgraded. This added sales as well as consumer retention would boost the business.
This scheme is also called as promotional credit, since its primary purpose is to help the business thrive by attracting people into purchasing their goods. It is often employed as a marketing strategy by the business which is bound to give great results. Studies showed that sales could even increase up to 70%. In some cases, the business might even give credit to its customers at 0% interest, but mostly this is given only for a short duration of time. Also keep in mind that, all these are completely dependent on individual businesses within each industry and cannot be compared with each other.
If you want to boost your sales, then it would be a good idea to incorporate credit option from the beginning of the sales. This is a great method to increase your sales approval just within two or three months. All that you need to do is ensure that the customers are attracted to the right kind of credit financing which would motivate him/her to buy more products.
It is easier to retain the existing customers than to create new customers. The already existing customers might already be acquainted to the policies, price range and kind of products offered by the store. This also reduces your effort in marketing your business, so all that is actually required is to continue and improve their loyalty towards your store. This could be done through proper credit financing strategies. You could be sure of it improving if the consumer comes back to the store for more purchases. This also means an increase in revenue too, as with credit facilities you could be sure of getting new customers too.
However, if the business does not have a credit system in place from the beginning. Then it could be initiated through various ways. Such as monthly payment option or creative marketing strategies.