Financing: When to broach the subject

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By Megan Salzano

Special financing in the world of retailing is a useful and necessary tool for attracting, converting and finalizing a sale. Consumers today want easy transactional experiences while also getting the best bang for their buck. Sometimes, that means keeping their cash in interest-making money market or stock market accounts while they pay off zero-interest financing over the course of a year or even two. Other times, it just means a little added help paying off large purchases such as flooring.

Whatever the case may be, special financing has been proven to make an impact on potential sales. In fact, according to Synchrony’s 2019 Major Purchase Study, 50% of shoppers reported promotional financing options were important when deciding where to make their purchase, while 89% of cardholders feel promotional financing makes their large purchases more affordable.

“Promotional financing can help consumers who are considering a purchase afford the things they want and need and may also provide a little extra motivation to continue their buying journey,” said Kevin Cassidy, vice president, lifestyle markets – payment solutions, Synchrony.

The benefits aren’t just there for the consumers either. “Promotional financing in general is quite effective at attracting consumers,” Cassidy explained. “Consumers are looking for simplicity in their shopping experience. They are also looking for choices in how they want to pay. Furthermore, for shoppers who have already come into the store or visited a retailer’s website, promotional financing can certainly help convert a sale.”

However, broaching the topic of special financing to the consumer is not as simple as it seems. Some may find it offensive if they think you’re implying they can’t afford to pay for their purchase on their own. Others might already know about your special financing and see it as poor customer service if you haven’t explained their options early on in the conversation.

So, where does the perfect balance lie?

FCNews tapped several retailers who have found success with special financing for their insights:

“I like to bring it up as soon as possible. It can bring the customer at ease that we offer flexible payment options. It also avoids implying that they can’t afford an option unless financed.”

Adam Pace, CFO, Metro Floors, Lancaster, Calif

“Early and often. Early means in advertising, on our website, on our digital sign in front of our store, on POP throughout our store. It’s important that all customers know we offer consumer financing. With all of the other visuals, it’s natural for our RSAs to bring up the topic in casual conversation.”

Sam O’Krent, president, O’Krent Floors, San Antonio, Texas

“Our salespeople are all aware of how financing can increase the amount of their average ticket, so we try to bring up our plan options very early in the conversation. It plants that seed in the customer’s mind that we understand the importance of making this purchase affordable and we are going to find a way to make it work for them. Plus, these plans all have some costs associated with them and, in some cases, we cannot offer financing in combination with coupons or other discounts. The sooner the salesperson knows which route the customer wants to go, the better.”

Mike Melone, marketing manager, Carpet One Floor & Home, Carroll, Iowa

“I believe the topic of credit should be brought up in the initial conversation with the prospective customer, either during or shortly after asking them qualifying questions about their home and what they are looking for in a new floor covering. Since flooring is a purchase that is typically made only every five to 10 years, it’s important to explain the buying process. A big part of that conversation is payment options, which leads us into the discussion of financing.”

Billy Mahone III, president, Atlas Floors Carpet One, San Antonio, Texas

“We assume they have cash, because that’s not offensive, but then we bring it up a couple of different times—in non-offensive ways. We have a sign by the road that says, ‘12 months, no interest,’ so we advertise that right away. Then, during the consultation. And, our emailed estimates explain the next steps and payment options, including 12-months, no interest with a link right there in the email that goes to the application.”

Typhannie Watson, owner, Carpeting by Mike, Somerset, Wis.

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Feb. 10, 2020

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