Consumer Financing and Competitive Advantage: Standing Out in the Market
Published June 06, 2024
Consumer Financing and Competitive Advantage: Standing Out in the Market
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The marketplace is only getting more crowded. Today’s small business needs a differentiation strategy that emphasizes its unique qualities while engaging with more customers to generate revenue and spark faster growth.
While its true that your product or service offers unique value, more competitors are popping up every day and they’re targeting your customers with their marketing efforts. So how do you stay one step ahead and maintain a strong competitive advantage over these new competitors?
The answer is consumer financing.
Customers choose businesses that offer consumer financing programs because it increases their spending power and provides them with opportunities to access the goods and services that may have been out of their budget. When customers can’t afford to purchase your products or services, that puts your business at risk.
Competitive Advantages with Consumer Financing
It doesn’t matter what your business offers or the industry in which your business exists, if the business fails to generate revenue the business won’t succeed. So why not make it easier for your customers to purchase your goods and services by giving them payment options that make closing the transaction faster and more convenient for both you and your customer?
Consumer financing offers that convenience with financing programs that cater to customer preferences by making high-ticket items more affordable. When your customers are happy, they not only return to purchase your products or hire your services again and again but they tell friends and colleagues about your business.
Increased customer satisfaction and improved brand image are just two of the benefits of consumer financing in the business world. But that’s just the start, there are even more benefits that can give your business a boost in this competitive landscape.
Maintain Higher Profit Margins
Failing businesses will do just about anything to get customers through the door. One of the most common methods is to drop prices on the products or services the business offers to the public in a bid to bring in more buyers. But this only succeeds at cutting into the company’s already thin profit margins and the goal is to increase revenue and grow the business through increased profits.
Cutting prices doesn’t mean cutting costs and the business suffers as a result. Unfortunately, too many business owners don’t realize the mistake they’ve made until it’s too late.
But consumer financing alleviates the need for dropping prices on your inventory because financing allows your customers to purchase your products and hire your service personnel at prices that reflect their value and promote cash flow by generating sales and revenue.
Bigger Invoices, More Sales
Affordability is the name of the game. When a customer can’t afford to buy what you offer, your business loses. Consider how many times you’ve had a customer on the line, interested in closing a transaction – only to decide to wait in the eleventh hour. The price of the product is certainly fair or the cost of your services commensurate with market trends but the customer is having second thoughts.
He or she decides they want to “think about it”. The more they think, the longer you wait to generate revenue and grow your business. How much longer do you want to wait for your business to succeed?
When your business offers consumer financing, the waiting game is no longer an issue. Remember, the customer wants to know that he or she can afford the item or service, but they also want the best deal on that item or service. Value proposition is already apparent to the customer, otherwise he or she may have already decided to shop with someone else instead. But your customers are well-aware that your products and your services are among the best in the business.
They just can’t always afford to pay for them, at least not all at once. When the customer realizes what it costs to purchase your product or hire your services, they may need to think about it because they can’t cover the cost in cash, right now, at this moment, when the transaction is about to close.
So there is always the possibility of the customer walking out the door until they are in a better position to afford the costs without breaking the budget for the month. When will the customer arrive at that “better position”?
Who knows? Certainly not your business and, chances are, neither does the customer. But when you can give the customer a choice of paying in full, upfront, in one lump sum or over a series of low monthly payments through a financing program that offers flexibility the chances are much greater that your customer will be ready to buy from you now. Right now.
Even better, the customer can now have a compelling reason to buy more products from your business or hire the deluxe services package, thus generating more revenue on a purchase order than previously anticipated. All because you were able to give your customer a choice of how to pay for the products and services they needed from your business.
Strategic Moves in a Target Market
Every smart business has a product differentiation focus strategy that emphasizes a particular target market and consumer financing can be a part of that differentiation strategy. Your product or service may appeal to a certain demographic and you can increase that appeal by making it easier for your target demographic to convert on a sale.
The objective is to offer a better product to outshine the competition. While it may cost more due to its perceived superiority, offering a variety of financing programs can make the product more accessible and affordable to your target demographic.
As a result, your chances of gaining a competitive edge in the marketplace improve from the very start.
Word of Mouth
Sometimes gaining a competitive advantage refers to the way a business inspires its customers to extol its many virtues online, in an organic way. There may be no more organic way than by reading honest, unvarnished reviews about how the business made a positive impact on its customers.
In today’s digital marketplace, future potential customers will often read the reviews and testimonials of previous customers who have interacted with the business and its products or services to help inform their decisions on closing a transaction.
Consumer financing often has that positive impact because it puts your business in a positive light for two reasons. First, offering your customers financing options gives them more flexibility to purchase what they need from your business with programs that come with low monthly payments, low interest rates for those who qualify, and flexible terms that meet customer preferences.
Second, by improving brand loyalty through customer satisfaction. Your business can become known for solving problems by helping customers access consumer financing.
When a business offers a higher quality customer experience, those customers are often more likely to return to enjoy that experience over and over again and, best of all, they’re eager to tell others about it.
That word of mouth can significantly contribute to gaining an advantage over the competition in any industry and help you stay ahead of new entrants who are trying to make a name for themselves in your region.
Get the Competitive Advantage with Your Consumers
Yes, your product offers unique features or your services may come at a slightly higher price based on the type of work performed. But when a company gives consumers more choices for buying and hiring with affordable financing programs through Fund My Contract, consider these and other competitive advantages that your business can enjoy.
When you work with Fund My Contract, you have our network of third-party lenders on your side to meet customer preferences for financing options without paying premium prices for the service.
Your customers want to help your business grow, expand, and ultimately succeed. You can make that all happen faster and more effectively with financing options that are designed to help your business thrive.
All you have to do is reach out to one of our consumer financing experts at Fund My Contract and we will help you get started on developing the financing programs that fit your customers best so you can edge out the competition. Let’s reach your business goals together.
Reach out today and start gaining the competitive advantage with Fund My Contract.
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