The KPIs to Keep Your Eye on When Offering Consumer Financing
There are a ton of studies and articles online proving the benefits consumer financing offers your business. When you’re looking for a financing firm to partner with, there are a few key performance indicators (KPIs) you should look for when trying to figure out how well your financing program is doing.
Key performance indicators are measurable values that demonstrate how effectively your business is reaching its goals. Businesses should have KPIs for every project and at every level. But for our purposes, we’ll dive into KPIs specific to consumer financing. Below are the five KPIs you should consider when choosing a consumer financing firm.
Increase in Sales
When you offer consumer financing, you’re providing a way for customers to purchase your goods or services when they might not be able to otherwise. In one survey, 30 percent of shoppers said they would never have made their purchase if they didn’t have a financing option.
One of the KPIs of consumer financing is an increase in your company’s sales. Compare your sales before you offered financing to after consumer financing is an option. Is boosting your sales by one-third really as simple as providing financing? The numbers prove that the answer is yes.
But for your financing to convert more shoppers, you must make them aware that you offer consumer financing in the first place. Make it plain to potential customers and clients that you provide financing options. Update your website, train staff to include financing options in their customer service conversations, and install noticeable signage in your storefront.
Consumer financing can take your business to new heights because you’re able to sell to a larger pool of customers. When considering KPIs for consumer financing, your sales numbers are easily measurable and will tell you how the service affects your bottom line.
Increase in Average Order Value (AOV)
Consumer financing does more than boost sales and brings new faces through your doors. It also increases your company’s average order value. The higher your AOV, the more you’re earning from the same number of customers.
Increasing your AOV benefits your business in unique ways in which simply increasing sales does not. For example, if you can increase your AOV, you increase revenue without spending on marketing, sales costs, and new customer acquisition.
Your average order value (AOV) offers insight into your customer’s shopping habits and allows you to strategize business growth around those habits. For example, if you see that consumer financing influences your customers to purchase certain products or upgrades, you can then offer new items or services that might appeal to your existing clientele.
Consumer financing directly increases your company’s AOV because customers feel the freedom to upgrade or purchase more products by slightly increasing the monthly payment amount or extending the number of monthly payments. When choosing KPIs for your business and evaluating the KPIs of your consumer financing, an increase in your AOV paints a clear picture of your financing’s effectiveness.
Application Approval Rate
Consumer financing provides access and opportunity to customers who might not have the funding to pay for your goods or services upfront. But consumer financing is more effective if the company you’re partnering with boasts high application approval rates. That’s why United Consumer Financial Services works to provide the highest application approval rate on the market.
When a customer walks into your storefront, they’re in a prime position to make a purchase. If they apply for consumer financing but are denied, they’ll move on to your competitors. But partnering with UCFS allows qualified applicants to bring their products home that same day.
Application approval rates are easy to measure: divide the number of approved applications by the number of submitted applications. This consumer financing KPI provides you with precise information about the financing firm you’re working with. The higher the approval rates of your financing firm, the more customers you’ll be able to serve. And that means your sales will increase as well.
Average Response Time
When you’re shopping for consumer financing firms, you want to consider the immediate financial benefit for your company. But at the end of the day, your business is nothing without your client base. That’s why you should think about customer service KPIs when choosing a financing firm. Many aspects of customer service can’t be measured. No one can put a customer’s peace of mind on a graph. But the team at UCFS prioritizes this aspect of a customer’s experience—plus more.
By partnering with UCFS as your consumer financing firm, you provide your clientele with access to friendly, helpful, knowledgeable customer service staff who are quick to answer their questions. And that brings us to the aspect of customer service that is a measurable KPI: response time.
UCFS’s customer service team promptly responds to your clients’ concerns regarding their accounts. They maintain quick response times, so your customers are informed and happy. And we all know that happy customers help your business grow.
Cost to Your Business
When choosing a consumer financing firm, you want to partner with a company that allows you to bring in the most profit possible without hidden fees. With United Consumer Financial Services, there is no registration fee, setup fee, or monthly fee. The business pays a small transactional fee only when the sale is closed with financing.
UCFS streamlines your customers’ payments, and the financing service helps you close more sales and increase cash flow.
As you can see, offering consumer financing brings many benefits to both your business and your customers. Providing realistic, affordable financing options can help your business grow through measurable KPIs. When you’re ready to take the next step in building your business and improve your customer service, the helpful team at United Consumer Financial Services will get you started!