Ideas for Improving Your Accounts Receivable Process
Ever had a customer interested in making a large purchase at your store, but then back out at the price? A customer financing option is a great way to help close those sales!
If you have ever used a payment plan, or financing option, when making an expensive purchase, you know it can be helpful. Buying a set of furniture, or even the latest technology is great! Sometimes though, that item’s price tag can be too daunting. Without the financing option, you likely would not have been able to buy that item. Or, you would have been more hesitant to make the purchase. Small businesses are always looking to grow their sales without high costs. You can do this by offering financing options to your customers. This service makes the purchase decision process so much easier! If you sell products that cost hundreds of dollars, or more, you will want to add this. Offering financing options can make prices look more affordable to potential customers.
The concern with installment payments is that you have to wait to get paid. It might take months or even a year to collect the money. If you have bills to pay, or employees to pay, a couple months might be too long! That is where Acumen Connections can help.
How To Offer Financing Options To Customers
Wondering how to set up financing or installment options for customers? Rest assured you have come to the right place. When you have a customer interested in a product, but not the price, you can offer an installment plan. Simply break up the price into smaller, more manageable monthly payments. We know that you need those funds now to start the project. If approved, you could get funds upfront from Acumen Connections. This is a win-win for you and your customer! You could get the profit upfront, and your customer would have manageable payments.
Without Acumen Connections, figuring out how to work out payment plans with customers can be difficult. With over 22 years of experience, we know a thing or two about business. If you start working with us before offering the financing option, we can help you smooth out the entire process. We can help you with the application, we can help you with the logistics, and we can even help answer any questions you or your customer may have.
Here is how the process works if you are approved: you make the sale, we give you the cash up front, and then your customer pays us the monthly payments. It is that simple. If you want to know more information, or want to get the process started, you can contact us at 800-864-4644 or firstname.lastname@example.org. We will be happy to help explain the process and even help walk you through the application.
Best Financing Option Strategies
When setting prices for your financing option, you will need to be conscious of two topics: the payback time period and the price point. Picking a payback time period is rather easy. Many experts recommend offering a payback period of 3 – 12 months. The real focus is the price point you list. There are multiple reasons infomercials advertise their prices as “only 4 payments of $29.99!” rather than just saying “$119.96”.
• Breaking up the price into smaller numbers makes it more attractive
• The left-digit effect means that English readers focus more on the first digit
• The 99₵ acts as a charm price, which reinforces the idea that this is a good sale
Breaking up the price into numbers with fewer digits is effective. Many more people would be comfortable spending $99 rather than $100. Those two values are only off by a single dollar. However, adding a third digit signals that the product is more expensive. That cost goes from being, “under $100,” to, “at least $100,” in the mind of consumers. Be conscious of the number of digits your monthly payment has.
The left-digit effect theory is based on the fact that English speakers read from left to right. This means that the first number they see is the one that sticks with them the most. If your product is priced at $79, the first digit will stick in their mind. They will read that number as, “$70 and some change”. If you price that same product as $80, the customer may read that as being, “$80,” or, “$10 more”. Again, the reason is because they are focused on that first digit.
To take this consumer behavior theory one more step, end prices with 99₵. Life Science has a great article on why most prices end in 99₵. And no, it has nothing to do with wanting to party like it’s 1999. Ending your price with 99₵ signals to the customer that they are getting a great sale. This is an effective tactic that has been used for over a hundred years. The idea is that by listing it under the closest dollar, customers see it as costing, “less”.
These theories have been tested a number of different ways. One study showed that raising the price of a dress from $34 to $39 increased demand! That same study found that raising the price from $34 to $44 had almost no effect on sales. The idea is that customers see the number $34 and read that as, “$30 plus some change”. Alternatively, they read $39 as, “less than $40”. Would you rather pay more or less for something? The one that signals the idea of “less” is the one that feels like a sale!
You can offer a payment plan to your customers and start closing more sales. Acumen Connections can help. For more information, or to start the process, contact us today! Call us at 800-864-4644 or email us at email@example.com. We will be happy to help.
Has having a financing option helped you make a large purchase decision before? Comment below.