Why retailers should offer in-house payment plans

The retail landscape is ever-changing, with new trends and technologies constantly emerging. But one thing remains constant: the need for flexible payment options to drive sales and customer satisfaction. As prices for reliable and current cell phones increase, customers desire payment options rather than paying for an expensive phone all at once. In-house payment plans are becoming the go-to solution. In this article, we'll explore why implementing your own payment plans can not only improve your customer's experience but also significantly boost your bottom line, especially when compared to 3rd-party financing.

The Problem with 3rd-Party Financing

You might wonder why not just stick with third-party financing. While you may have thought there wasn’t any other way, there actually is. The reason that 3rd-party financing has been challenged by in-house methods is that it has its own set of challenges:

• Customers Are Declined: 3rd-party finance companies often have stringent credit checks, require bank accounts, and demand social security numbers, all of which could turn away potential customers, or worse yet, have them be declined.
• Lack of Control: Your customer’s experience, particularly finding the right payment plan is in the hands of another company, which can be a risky proposition. It's not unheard of that 3rd-party finance companies sell your customer information to other retailers (effectively, your competitors).
• Profitability: It's common practice for 3rd-party finance companies to pay you a reasonable retail price (the “MSRP”) for the phone, then take the customer payments themselves. Yes, you make in profit the difference between your wholesale cost and the MSRP paid to you by the finance company.  But, did you ever add up how much profit you are leaving on the table and literally handing it over to the finance company?  It’s not a small change. It’s hundreds of dollars. Do the math sometimes and see for yourself.

Why Go In-House?

In-house payment plans, such as those enabled by the RTO Mobile software platform, offer a host of advantages:

• Recurring Revenue: Offering in-house financing allows you to build a steady revenue stream, turning one-time shoppers into repeat customers as payments are made to you.
• Sell More Devices and Repairs: The more accessible you make your pricing, the easier it is to upsell and cross-sell products and services.
• Keep Your Profits: Unlike 3rd-party financing that takes a whopping chunk of profit that should be yours, in-house payment plans let you keep that profit.
• Less Expensive for Customers:  Since you control the pricing of the payment plan, your pricing will be far less expensive for customers than 3rd-party financing.  Compare pricing for yourself and see by using the RTO Mobile profit calculator.

 

The Customer Advantage

When it comes to offering in-house payment plans, the benefits aren't just one-sided. Your customers stand to gain significantly as well:

• Lower Barriers to Purchase: Traditional financing options often require credit checks, checking accounts, and approvals that could discourage potential buyers. In-house payment plans can often be more lenient, widening the net of eligible customers.
• Personalized Payment Options: With in-house payment plans, you have the freedom to customize the terms based on your customer's needs. Whether it's extending the payment period or adjusting the down payment, a tailored approach is always more attractive.
• Seamless Shopping Experience: Eliminating the need to involve a 3rd-party finance company streamlines the buying process. Your customers can select a product, choose a payment plan, and check out—all without leaving your store.
• Enhanced Trust and Loyalty: Managing the payment plans yourself signals to the customer that you are invested in their long-term satisfaction, not just the immediate sale. This builds trust and can result in more repeat business.
• Financial Flexibility: In-house plans can often be adjusted or renegotiated directly with the retailer in special customer circumstances such as, unexpected financial hardships, or just more time needed with a lower payment amount, providing an added layer of flexibility for the customer.

Rent-to-Own: The Best of Both Worlds

Rent-to-Own models, like those managed through platforms such as the RTO Mobile software platform, offer the ultimate in flexibility and profitability. The software gives you the tools to manage in-house payment plans efficiently while providing your customers with an accessible path to device ownership.

Ready to Reap the Rewards?

If you're looking to elevate your retail cell phone store or repair shop business, there's no time like the present to adopt in-house payment plans. Book a demo with RTO Mobile today and transform your approach to giving customers what they want.