It’s easy to feel for your customers when they can’t make payments. Hearing the plea in their voice for payment flexibility makes it hard to enforce tough terms or upfront payments. Yet, business isn’t personal, and sales leaders' jobs hinge on figuring how to increase sales. If we gave special treatment to every sob story we’d be a charity. Right?
Providing a sense of flexibility and giving your customers terms needs to be good for your bottom line. After all, you’re accountable not only to your customers, but also to your employees and shareholders. You need to be able to articulate a solid business argument to your other stakeholders on why offering customer terms is good for your business.
Here are five ways you can use flexible terms to actually increase sales and boost profitability.
1) Reduce the Number of Abandoned Shopping Carts
On average, 68.5% of shopping carts are abandoned before checkout. These customers have already shown interest in your product or service but often fail to complete the transaction due to price point.
How can you get these customers to complete their order? A recent Forrester study found that companies that offered flexible terms for payment saw sales increase by 17% and average orders climb by 21%.
2) Enable More of Your Leads to Qualify and Convert
One of the greatest challenges of lead generation is qualification. While 61% of marketers send all of their leads directly to Sales, only 27% of those leads end up being qualified. That means salespeople are investing an extra 34% of their time in leads that can’t turn into real customers. By providing flexible financing terms, you boost the number of leads that can afford your services, increasing how many can convert to customers. And this ultimately increases your sales.
3) Build Loyalty and Increase Customer Retention
Keeping an existing customer costs approximately six to seven times less than acquiring a new one, so you need to show your customers you care about their needs. Providing financing options keeps them faithful, even as they come across cheaper options. According to McKinsey, ecommerce spending for return customers is on average $52.50 for every $24.50 spent by new customers.
4) Get a Faster Return on Your Investment
If someone owes you money, it’s likely they also owe money somewhere else. The first business or institution to show flexibility or make a reasonable offer is likely to be the first to see a return on their initial loan.
5) Stay Ahead of Your Competitors
To keep up with the changing pace of the market, you have to stay competitive. Most companies have realized to stay ahead of the game they have to offer some flexibility to their customers. “When you set out to change small business accounting, you want to ensure your services are fully accessible to as broad a base of potential customers as possible," said Brendon Pack, Vice President at 1-800Accountant. "That is why financing options are essential to our clients, allowing entrepreneurs flexibility to make the purchases they need to be successful.”
Get selfish. While offering flexible terms may put your heart at ease, it really isn’t about altruism. Ultimately, terms will help you scale and increase sales. And if you can make a few friends along the way, why not?