Welp MagazineThis article discusses the benefits businesses attain through payment in installments to their customers.
Payment in installments means paying a bill in small portions throughout a given period. It involves an arrangement between a buyer and a seller where they can state their terms in an invoice or a contract. Most of the time, these payments are for bulk purchases or orders. Businesses need to consider offering this payment flexibility to their customers as it has numerous advantages for all. The division of the total cost into smaller payments makes it suitable for most people who may desire an item but cannot pay for it in lump sum and can now easily attain a product or service. Here’s why you must consider providing payment in installments as an alternative to customers acquiring purchases.
Customers readily provide referrals for your business
Established businesses will attest to customers being your biggest marketers. You must strive to provide high-quality services for a great customer experience. When you satisfy your customers, they refer your business to family and friends. Convenient payments in installments ensure your customers come back. They come back with more clients due to your reliability and convenience. If you can make payments in instalments with the avenue your business offers, you can increase your customers’ numbers as they refer each other to the most convenient place.
Your business will have consistent cash flow
A business often requires ready cash to cater for recurring expenses to keep the business in operation. Payment in installments guarantees that you consistently have money streaming in to cater to your bills and reinvest as you accept periodic payments for items and services that would have been expensive for one-time purchases. A healthy cash flow reflects on meeting your expenses and business growth.
It makes payment and the shopping experience easier
Customers who pay in installments ease their cash flow burden and can pay for high-value items over time. It makes it seamless for the consumer experience. You can provide your consumers with financial flexibility as they control their finances and can allocate their funds towards purchasing from your business and tracking their other expenses. You have provided your services without straining your customers’ immediate cash flow.
There is an increase in the average order value
Most repayment plans range between three, six, and twelve months. It enables customers to afford expensive services and goods. This affordability makes them increase the average order value of a business. Your business has eliminated the barrier of high costs, and you can spread its cost over time. So, when consumers buy your items and services in installments, they make you increase the variety of things they would want, and you, in turn, increase the average order value.
Your business can attract more shoppers
Some buyers are on tight budgets but search for products with affordable rates. Installment plans make it easy for a buyer to opt for items and services which can be afforded by extending the payment. Your customers can make little payments and spread the cost over time, ensuring they can keep their budget in check. These low monthly payments make your business more attractive to a broader range of shoppers who might want your goods and services and could not pay the lump sum.
Consumers prefer businesses that can break down the high prices into installment financing. In this way, your business allows consumers to purchase grand items and confidently pay for them. When you offer such financing, customers will come to your business, more and more people will come to you for big purchases instead of shying away from huge price tags. Your customers can even use credit despite having perfect scores leading to more business sales. So, it increases conversion rates for your business.
You alter the consumer’s perception of affordability
By showing how the consumer can acquire an expensive product through a convenient payment plan, you convince them that they can pay for the item. So, you can tap into their psychology and influence their spending behavior. The perception that an item is affordable if they fit it into their budget and go home with the item while catering to their expenses will influence them to buy something they would have considered too expensive. So, you increase the value of an item as you influence people to become open to buying expensive products using payment installments.
Conclusion
Payments in installments benefit both the customer and the business to a great extent. It’s a great attraction to several businesses as customers seek ways to acquire a desired item. Your business enables them to budget within their finances and plan on purchasing it over time. It avoids clients from restraining their funds at one go. Take advantage of a payment in installment solution and uplift your business to greater heights.
