Why Offering Financing Is Smart Retailing
For whatever reason, many bike retailers have somehow formed negative opinions about financing, whether it’s out of irrational fear of not serving the needs of customers, the added work of promoting it or something else. The fact is, if you’re not offering financing as an option for your customers, you could very well be losing business as a result. Let’s take a minute to go through the most compelling reasons you should reconsider putting your financing message front and center.
Consumer Psychologist Ian Zimmerman, Ph.D has studied the topic of purchasing on credit and has found a link between financing and impulse buys. Bike prices are rising at a rate faster than the rate of inflation and consumers are spending their discretionary dollars on more categories than ever - especially electronics. And bikes aren't the only high dollar item that bike shops want to sell, think about wheelsets, power meters and car racks. The ability to finance such a purchase, can improve the chances of browsers making impulse buys.
What does buying a bike mean to your target audience? For many, it means incurring a hefty expense that they may not be ready or willing to take on. By offering financing, you can effectively shift the thought process from cost to benefit. When your customers can clearly understand how they will benefit from purchasing a bike without the concern of coming up with a large sum of money upfront, the chances of closing the sale go up exponentially.
As a business, you want to create as many repeat customers as possible. Unfortunately, this is not often the case in our industry. A person may purchase a bike from you but never return for anything else in their lifetime - a trend that appears to be getting worse as more accessory and clothing spending goes online. Financing can help you establish a long-term relationship with customers. You made their bike purchase easier and you freed up their monthly budget to buy their accessories from you too if you can get them back into your store.
As mentioned earlier, many retailers in the bicycle sales industry are still not on board with the concept of financing. What this means for your business is a chance to stand out amongst the competition. When a prospect is shopping around for the best bike and they notice that you offer financing, it just might be enough to tip the scales in your favor.
The industry is only getting more competitive, now’s the time to shake off any misconceptions you may have about financing and considering incorporating this powerful tool into your upcoming marketing strategy.