How to Offer Customer Financing and Foster Positive Experiences

At PaySpyre, we believe that everyone deserves access to the goods or services you offer. We also know that not everyone has the desire or ability to pay upfront. Offering alternative payment options can propel your business to new heights, showcasing your customer-centric mindset and increasing your potential for revenue.

In this blog, we’ll discuss the basics of financing for customers, the steps to setting up a payment plan, and how to talk to your customers about financing options.

What is Customer Financing?

Customer financing is a program businesses can offer clients who may not be able to pay the full purchase price upfront. These plans give consumers the freedom to pay for goods or services over time, through different payment options like deferred periods, installments, and loans.

But your customers aren’t the only ones who benefit. Providing this option can:

Increase sales – By offering customer financing options, you can attract customers who are interested in your products or services but may be hesitant due to upfront costs. This flexibility in payment increases purchasing power, allowing more consumers to commit to purchases that might otherwise be unattainable or decided against, leading to an increase in overall sales.
Boost customer loyalty – When you provide financing options, it’s seen as a gesture of trust and support for your customers. This understanding and accommodation can foster a sense of loyalty and appreciation among your customers.
Tap into a new consumer demographic – Customer financing can open up your offerings to individuals who are more comfortable with or only able to make purchases through installment plans or loans. This includes individuals who may not have large sums of disposable income or those who prefer managing their budget through smaller, regular payments.
Demonstrate your dedication to customer service – Offering financing solutions is a clear indicator of your commitment to meeting customer needs and enhancing their buying experience. This dedication to customer service can improve your reputation and boost customer satisfaction levels.

Providing the opportunity to finance for customers of small businesses is a great way to boost revenue, increase customer satisfaction, and build a positive brand reputation.

How to Offer Financing to My Customers

In the modern landscape of customer financing, you’ll have one major decision to make: “Should I offer third-party financing for my customers or in-house financing?” Below we’ll go over the key distinctions between the two. Plus, we’ll discuss how you can start implementing your chosen method and start giving your customers more purchasing power.

Decide What Type of Financing to Offer

As a business owner, you want everything you offer to reflect your brand’s values and support your objectives — including your financing program. Once you understand the core elements of in-house versus third-party financing, you can decide which one is most in line with your business identity and customer needs.

Third-Party Lenders

When you decide to go with third-party financing, you’re essentially partnering with an external lender who is responsible for managing credit assessments, loan origination, and payment collection processes. Let’s look at the pros and cons of third-party lending:

Pros of third-party financing:

Immediate Funding – You’ll typically receive payment upfront, although it can be less than the merchant discount rate.
Risk Management – The lender assumes the risk of customer default, relieving your business of this financial burden.
Operational Simplicity – Typically, you won’t need to manage the financing process, as the lender will handle everything. However, it’s important to note that you’ll have very little say over the process.

Cons of third-party financing:

More Complexity – Involving another company means navigating additional processes, guidelines, and objectives that may not align with yours.
Less Convenient – Working with a third-party lender means customers have to work with you and another company to complete their purchase, adding an extra step in their buying journey.
Limited Control – Acceptance of financing applications is at the discretion of the lender. This means you likely won’t have any influence on which applicants are approved or rejected.
Reputational Risk – Some lenders may have questionable reputations, which may deter customers from finalizing their purchase.
Slower Processing – Third-party financing, especially referral-based systems, is generally slower in processing applications and can delay the buyer journey.
Exclusion from the Process – Many retail businesses end up feeling disconnected from the financing process, as lenders typically don’t keep you informed about customer applications or approval status.
Cost Implications – Going through a third-party lender may add to your overall costs, especially if there’s a merchant discount rate.
Lower Completion Rates – The involvement of a third party can reduce the likelihood that your customers will go through with financing.

In-House Financing

When you offer in-house financing, you and your customers can avoid the headaches that come with working with third-party lenders. Providing in-house financing can also create a personalized experience for your clients. Together, you can discuss their financial goals and decide on a payment plan that’s suited specifically to them.

While traditional in-house lending calls for tedious payment logs, lengthy applications, and hands-on collection processes, partnering with PaySpyre eliminates this busy work. Our easy-to-use financing platform has all the tools you need to offer flexible financing. The PaySpyre team will also vet applicants, create consumer profiles, set up automatic payments, and even generate reports for your accounting team so you can focus on creating positive customer experience. Plus, we’re 100% cloud-based, so there’s nothing to download.

Pros of in-house financing with PaySpyre include:

Custom Finance Programs – We design finance programs tailored to the specific needs of your business and your customers.
Flexible Application Process – Applications can be completed online by either you or your customer, offering greater convenience and ultimately flexibility.
Comprehensive Review System – PaySpyre thoroughly reviews applications and verifies the information provided so you don’t have to.
Credit Assessment – We make informed approval or rejection recommendations based on a detailed review of the applicant’s creditworthiness.
Financing Offers Management – Upon approval, PaySpyre takes care of making the financing offer directly to the customer.
Efficient Agreement Process – Once the customer accepts the offer, we handle sending loan agreements for fast and easy e-signature.
Account Activation Support – Once the loan agreement is signed, you’ll be able to activate the account online with just a few clicks.
Automated Payment Scheduling – Payments are automatically scheduled and pulled directly from the borrower’s bank account. PaySpyre also handles late collection efforts if borrowers fall behind on payments.
Detailed Reporting – We provide in-depth monthly accounting and performance reports so you have all the data you need, right at your fingertips.

When you work with PaySpyre, it’s like having your own finance department dedicated to managing and optimizing your finance portfolio. Our comprehensive service takes care of the heavy lifting so you can focus on what matters most — growing your business.

Customize Your Terms

PaySpyre is on a mission to equip every business with customer financing options that align with their budget and brand. That’s why we’ve crafted a variety of payment plans that cater to a broad spectrum of shoppers.

Below are some of the products available through PaySpyre:

No interest / No payments – Shoppers enjoy a promotional period during which time no interest is charged and no payments are required.
Equal payments without interest – Consumers can break the total purchase price into manageable, equal monthly payments, without interest.
Equal payments with interest – Consumers can make equal monthly payments with interest. This interest can help your business offset costs, provide a buffer for potential losses, and provide a new revenue stream.
Short-term to long-term options – From three-month plans to multi-year ones, PaySpyre offers finance schedules that meet the needs of your customers.
Small balance to large balance options – Whether your client needs help funding a small portion of a purchase or the entire thing, we offer every size of loan from micro to mega.
Multiple credit products for different uses and promotions – Help your clients take the first step on their personalized financial journey. Our extensive menu of credit products and promotional offers unlock more buying confidence for your shoppers.

Advertise to Customers

Your customers can’t unlock the full potential payment plans if they don’t know they exist. Maximize the impact customer financing programs can have by marketing your plans as enthusiastically as you market your goods and services. Here are a few quick tips:

Promote online – Promoting flexible plans on social media and displaying options front-and-center on your company’s website lets customers know from the get-go that they have options. Showing them your support from the first touchpoint sets you apart from the competition, improves brand reputation, and encourages purchasing decisions.
Train staff to promote – Financing is a powerful tool for your business, and like any tool, it’s only as good as the team using it. That’s why every member of your staff should have an in-depth understanding of plan options and be prepared to offer financing to customers who express budgetary concerns.
Display marketing materials – Keep stacks of brochures and pamphlets in high-visibility areas, like waiting rooms or next to the cash register.
Run limited-time offers – Limited-time offers can attract new customers who want to take advantage of plans like no payment/no interest installments while they can. They can also encourage a customer who is on the fence about a purchase to act now.

How to Talk to Customers About Financing

Talking to your clients about their financial situation can feel daunting and awkward. It’s a very personal conversation that can be difficult to navigate, especially if you’re new to the game. The truth is that financial conversations are as awkward as you make them, but there are ways to approach these discussions that can ease that tension.

Here are tips on how to offer customer financing that focus on direct, transparent, and superior customer service.

Understand Their Concerns

It’s common for customers to have worries about hidden fees, high interest rates, or even being rejected for financing. Assure customers that you prioritize transparency in every agreement, making sure applicants fully understand the total cost they’ll pay before they sign anything.

With financing, customers can spread the cost of your goods or services over time (Buy Now and Pay Later). You choose your payment program and PaySpyre will facilitate financing and handle the back-end processes for you. As for their concerns around rejection, PaySpyre boasts high approval rates and credit history is not required.

Build Rapport and Trust

You’re a human first, and a business second. Demonstrate that to your customers by building rapport and establishing trust. Some ways to do this include:

Relate to the customer through genuine shared interests or experiences.
Asking open-ended questions to encourage communication
Acknowledging and directly addressing their concerns and confirming their concerns have been adequately addressed.
Being open, direct, and honest about pricing and payments

Initiate the Financing Conversation

When learning how to offer customer financing without seeming pushy, the key is to engage in a way that feels natural and customer-focused. Begin by discussing the sale as is. This approach helps you determine whether financing might be needed. Start by asking for their thoughts on the product or service to understand their stance on the purchase. This conversation can lead to insights into their purchasing decision and any potential hesitations.

Typically, price or cost concerns arise when you move forward with the sale. This is your opportunity to smoothly transition into financing options, with an opening like: “Have you considered financing your purchase? If you would like some information, I’d be happy to discuss it with you.” This approach is non-intrusive yet informative, offering a solution to their budgetary concerns while keeping the focus on their needs and the value of the product or service.

Present Financing Options Clearly

Make sure you clearly lay out the benefits of financing, explaining that it empowers consumers to pay on their terms. For example, paying the full cost upfront might feel daunting for a client. In a case like this, demonstrate the value of a payment plan. Discuss what a comfortable payment looks like for the client and seek to provide financing terms that match the desired payment. With PaySpyre it’s quick and easy so you can talk about financing terms in real time.

Emphasize how financing enables them to access the benefits of the product or service they need today — without the burden of upfront payment.

Handle Objections and Concerns with Grace

This is an important thing to keep in mind: objections are a normal part of these conversations. It’s important to fully understand the objection so that you can properly handle it. Ask questions to ensure you fully understand then provide additional information to address the concerns. Once you feel that you have handled the objection, ask the client if their concerns have been adequately addressed.

Ensure your conversation is focused on the benefits your product or service will provide the customer. This will help them understand how the product or service fulfills their needs.

Finalize the Sale

Once you’ve received confirmation from the customer that they’d like to move forward with the sale, review the terms discussed and start the finance application. You can start this process by confirming your understanding of the deal and asking if they have a moment to complete the finance application. With PaySpyre our user-friendly online application makes this process a breeze.

Follow-Up and Customer Satisfaction

Show customers you care about their experience, even after the transaction is complete, with a follow-up strategy. Touching base post-purchase can boost engagement, strengthening that relationship and increasing the chances of repeat business.

Innovative Financing Solutions From PaySpyre

Transcend the limits of conventional financing with PaySpyre. Our innovative financing platform gives your customers access to the funding they need on the terms they want, so they can buy today and pay tomorrow. We provide customer financing for small business operations, enterprise organizations, and everything in between.

Learn more about how our financing works and create customized experiences for your customers today!