Providing consumer financing helps you serve new clients, bolster their purchasing power, increase sales, and deliver positive customer experiences that cultivate long-term relationships. Maximizing your financing program includes gathering and reviewing performance data, ensuring your partner provides the services that translate to measurable success.
United Consumer Financial Services, a trusted consumer financing company with more than 45 years in the industry, helps our merchants track valuable financing performance metrics to ensure they’re hitting targets with financing programs that convert, and doing things that help them increase sales with financing. When you partner with UCFS, we provide custom quarterly and end-of-year reports highlighting what to track and why it matters. Read on for more.
Must-Track Financing Performance Metrics
Tracking financing metrics empowers businesses with the data to measure the success of their financing program and their sales team’s performance. Below are the must-track metrics to keep your consumer financing on track
Submitted Applications
The more applications your business submits to your financing partner, the more customers you’ll onboard, increasing sales.
By tracking the number of submitted applications, businesses can determine if their sales strategies yield desired results (more applications leading to more approvals and sales).
Approval Rates and Industry Average
Approval rates help you see if your pricing strategy works or needs tweaking. Comparing your approval rates against the industry average enables you to measure the success of your onboarding and approval strategies.
When you partner with UCFS for consumer financing, you benefit from customizable financing programs that increase approval decisions and help you sell more. Our consumer financing solution gives you the ability to select your program cost structure based upon your business’ consumer credit quality which can impact your approval rates and cost. UCFS provides two basic pricing models for customizable financing: high-risk and conservative risk approaches. And we can customize these programs to fit merchant needs.
Merchants prioritizing growth and volume can pay a higher percentage of the financed amount, which allows UCFS to approve more consumers, even those with less-than-ideal credit. A higher merchant risk translates to increased consumer approvals, empowering more shoppers with payment flexibility to make big-ticket purchases.
Funded Contracts
Funded contracts represent actual cash flow, which is critical to sustaining and growing a business. If many customers are approved but do not move forward with their purchase, revenue projections could be off. The number of funded contracts helps companies see how many consumers followed through with their transactions after their application for financing was approved. This number reveals how effective your sales team is at converting financing approvals into real revenue.
Amount Financed
The amount financed shows how much revenue your financing program is earning. When compared quarter-over-quarter or year-over-year, businesses can determine if they’re using their financing program effectively to increase sales.
Cancel Rate
Your cancel rate refers to the percentage of approved financing applications that don’t result in a funded (completed) transaction because the customer canceled or abandoned the financing process after approval.
Consumers might cancel their financing for a few reasons:
- Confusion about financing terms
- Poor follow-up by staff
- Better pricing from a competitor .
United Consumer Financial Services knows application approval is just one step in a successful financing program. We provide clear, consistent financing terms that help you earn consumer trust. Our team offers training to your sales team to ensure they know how and when to promote your financing options. And our flexible payment plans create affordable options for your customers who do not have readily available cash or credit card bandwidth to make their purchase. We proactively work to mitigate cancellation rates, empowering businesses to serve more customers while boosting sales and revenue.
ACH Capture Rates and Industry Average
A business’s Automated Clearing House (ACH) capture rates communicate completed automatic payments from customer accounts.
The higher a merchant’s ACH capture rates, the fewer issues of late or missed payments. ACH success rates directly correlate to risk management; frequent ACH failures are signs of delinquency or default risk, negatively affecting the merchant’s profits.
And, if a consumer commits to ACH when the credit application is submitted, UCFS has a higher tendency to approve the credit app.
Same-as-cash Utilization
Offering same-as-cash promotions helps you reach more customers, sell more, and grow your business. These waived-interest options help combat pricing hesitations, especially around big-ticket items.
Tracking same-as-cash utilization shows how effective these promotions are at converting shoppers. By segmenting same-as-cash adoption rates, businesses can determine how these offers impact sales during seasonal slumps or traditionally slow sales periods.
UCFS offers 90-days same-as-cash, 180-days same-as-cash, and 12-months same-as-cash options. 90-days same-as-cash is always at no additional charge to a business, when offered to the consumer. 180-days and 12-month same-as-cash may have an added low fee for the merchant.
Early Loss Statistics
Early losses in consumer financing programs are red flags. This loss can signal approval for customers who were actually not able or willing to make their payments. It’s one of the more costly types of non-payments in consumer financing because there’s often no return, and the business may have already delivered the product or service.
Businesses can lose money on early losses, because with UCFS, first payment default from consumers are the merchant’s responsibility. They can impact profit margins and hamper profits and growth. Monitoring early losses and comparing your loss rates against your financing partner’s average can help you determine if you’re on track or if you need to reevaluate your approach when offering consumer financing or your service or product.
Partnering with a Data-Driven, Conversion-Driving Consumer Financing Partner
The data doesn’t lie. Solid portfolio performance is directly linked to sales and back-end performance. Businesses like yours need accurate, complete data to evaluate the performance of your financing program: what’s working and what needs reworking. United Consumer Financial Services provides our merchants with thorough, detailed business reports outlining every aspect of their consumer financing programs.
We work closely with our partners to help maximize financing so they can submit more applications, onboard more customers, and increase sales –– long term. We put the financing data in your hands so you know exactly how effective and lucrative your financing program is. Becoming a merchant is easy. Contact UCFS today to learn more.
