How better payment solutions boost profitability by cultivating customer loyalty #SmallBiz - The Entrepreneurial Way with A.I.


Monday, March 29, 2021

How better payment solutions boost profitability by cultivating customer loyalty #SmallBiz

The rise of digital commerce has given consumers more power to determine when, how and from whom they make their purchases. Access to an expanded choice landscape and increased price transparency, as well as expectations for better customer service, has made it easier and more common for consumers to take their business elsewhere when their expectations aren’t met. The result has been a rise in customer infidelity and a decline in merchants' short- and long-term profitability.

With consumers in power, your brand is ultimately replaceable if you don't make purchasing convenient and readily available. "The customer really wants more control and more transparency," said Andrew Rostami, president of the buy now, pay later (BNPL) solution, Citizens Pay. "And COVID-19 has accelerated this mindset of being really prudent."

So, in this type of environment, how do merchants improve customer loyalty in order to turn around declining rates of short- and long-term profitability? While merchants have long understood that a positive customer experience is important to establishing loyalty, the variety of ways consumers can shop today has made the customer experience not just important, but a key differentiator. According to a survey by SuperOffice, rather than price or product, consumers award their loyalty according to the experience they receive.

However, creating the optimal customer experience is complex and multifaceted, so achieving it can be elusive. It's even more difficult to deliver a good customer experience without a well-defined CX strategy, and creating that strategy is complicated, too. POS systems are a prime example of how a well-defined strategy can shape the customer experience. With the right strategy, POS transactions can enhance the overall customer experience and help shape purchasing behavior. A modern POS solution allows customers to choose from a variety of ways to pay, and more payment options leads to more satisfied customers. One way to do this is through a BNPL solution. Merchant Maverick reports that 87% of consumers between 22 and 44 are interested in using a BNPL solution and that 37.6% have already used one.

How do BNPL solutions empower retailers to boost sales and improve the customer experience?

Spurs larger purchases, and drives customer loyalty

A BNPL solution makes purchases more accessible and manageable for customers, which enables larger purchases, boosts transaction values and increases sales conversions for merchants.

"BNPLs are a really important tool for merchants. They are a way to accelerate sales as well as drive repeat customer behavior and loyalty across all channels," Rostami noted. "When businesses can provide a BNPL in an omnichannel way that lets customers purchase those big-ticket items with low monthly payments, whether they're online or at a physical location, it really helps them make large purchases regardless of how they want to shop."

Counteracts "sticker shock"

Consumers today look for payment options that allow them to spread out the cost of expensive products and services. A BNPL solution that doesn't add to their debt with inconvenient interest rates can meet that need as well as neutralize the effects of sticker shock, allowing merchants to better compete on cost/value without diluting quality perceptions or cheapening their brand.

"If it’s also a solution that focuses on the customer experience during not just checkout but the whole customer shopping journey," Rostami added, "it can further help the merchant influence the customer toward different outcomes."

For example, if a customer already has a big-ticket item in the shopping cart, but is thinking of upgrading or adding more items, a monthly payment option can reduce sticker shock and make the decision to upgrade or buy additional equipment easier. A BNPL solution capable of providing an enhanced experience throughout the entire shopping journey leads to better customer outcomes, reduced abandoned cart rates, higher repeat behavior and increased sales conversions.

"This is what the retailer needs to be thinking about," Rostami said. "Not just a strategy to provide an immediate boost, but a strategy that is sustainable and builds the type of shopping experience that will drive repeat behavior."

A seamless digital experience for the customer and the merchant

A BNPL solution with a simple purchase process encourages customer loyalty and word-of-mouth advertising to new customers looking for responsibly structured monthly payment plans. Moreover, a solution that requires a minimum amount of customer information and allows for repeat purchases without a new credit application creates a frictionless shopping experience.

On the merchant side, integration of the BNPL solution is also frictionless, especially if it can offer low funding costs and a level of strategic advisory for powering sales and customer loyalty. Rostami advised that "a BNPL should be able to provide merchants other unique new product opportunities, too, like marketing techniques and analytics, and fraud and credit experience based on an understanding of their vertical and broader financial products."

Delivering the best customer and merchant outcome through a BNPL 

Creating an optimal customer experience is critical to retail success, but it doesn’t come without challenges. A BNPL solution that is easy and manageable for customers can counteract sticker shock, create an optimal customer experience and ultimately turn fickle customers into loyal customers.

via by , Khareem Sudlow