Understand Your Buyer > How To Convert > The Finance Effect
What is it?
The Finance Effect looks at the simple matter of making your offering financially affordable to your potential clients by providing different ways to pay.
Why does it work?
It works because as buyers we can often want something but simply don’t have the money. By offering finance or flexible payment options you can ensure that those who want to buy are able to do so and not deterred through lack of funds. Of all the objections and reasons to lose the sale, lack of funds is both a common and easily handled situation, but if you aren’t prepared for it, or if you don’t make it clear then the client may never ask.
How can you use it?
Remembering that expensive is relative, look at your offering. It’s not just the items that cost thousands that are out of reach to some of your potential clients.
For anything that is greater in price than £100 or $100 can you offer a flexible payment plan or partner with a third party finance provider?
Example
Peloton offers high-end fitness bikes that many people couldn’t justify as a one-off expense (around £1,750). Instead of losing those customers, Peloton uses the Finance Effect by offering 0% interest monthly payment plans – as low as £45/month.
This transforms the purchase from a luxury expense into a manageable monthly commitment, making the product accessible to more buyers without discounting it.
It’s not cheaper.
It’s just easier to pay for.
6 different ways to structure payment for your offering:
- Pay now start later-Allow buyers to secure something but not take delivery or use it until later when they are ready.
- Pay on results -Take payment when you have delivered the desired result for your buyer
- Pay as you go – Allow buyers to pay as they consume your offering.
- Prepayment Allow buyers to create a credit balance that they can then draw down.
- Buy now pay later – Allow buyers to “buy|” today but not actually pay for the item until later in the future.
- Finance – offer finance and instalment payments to ease cashflow for your buyer.
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