How to increase average order value with finance
Written by
Monday 22nd July 2024
As a retailer, you’ll know that one of the trickiest challenges is attracting and converting customers. But connecting with customers who are already going to buy from you and boosting their average transaction value (ATV) is key too.
Why you should focus on boosting your ATV
Whether a customer is upgrading a product or service or adding additional products to their basket, an increase in average order value can have far-reaching effects that go beyond that one sale.
- Generate additional income without impacting your cost per acquisition
- Improve your profit margins
- Support customers in finding the right products for their needs
- Better understand consumer buying behaviour
- Boost customer loyalty and retention rates
- Increase customer lifetime value
58% of surveyed customers said they spent more due to the availability of our finance
With over half of customers telling us they spent more due to finance, it’s clear offering flexible payment solutions can help to drive average order values up and improve sales for your business.
Whether you opt for interest free, low-APR, buy now pay later or a combination of options, give customers greater flexibility and empowerment when making a purchase.
Boosting average transaction with finance
Many customers tend to shop with a certain price point in mind – and this is usually an amount they can afford to spend upfront.
However, the amount customers can borrow tends to be much greater. Spreading the cost over a fixed term allows customers to be much more flexible as they can find a product that suits their monthly budget rather than the amount they already have saved up.
Finance really helps us to secure the sale with the customer, who might come in thinking of spending £1,000 and will walk out with a bike that’s £3,000 because it meets their needs. They get to spread the cost over a set number of months so it becomes more affordable.
– Mark Edmunds, Store Manager
Retailers can work with a finance provider like Novuna to offer flexible finance solutions. Here’s some tips to help you make sure finance effectively drives increased ATVs:
1. Don’t wait until the checkout to tell customers about your finance options
It’s crucial to promote your finance offering at the very start of the customer journey. Whether it’s a banner on the homepage of your website or a window sticker on the front door of your shop, aim to introduce your customers to the options available before they begin browsing.
This ensures customers start shopping with the flexibility of finance in mind, rather than shopping within a strict upfront budget.
2. Continue to promote finance at key touchpoints
Customers should be reminded of the finance options available throughout their buying journey, so they don’t bypass a product that may be accessible using finance even if it isn’t affordable upfront.
For example, online retailers should ensure a finance calculator is available on product pages. In-store POS material, such as hangtags on popular products, can be particularly effective too. Our retail partners benefit from a host of materials and resources to help them promote finance to customers, so make sure you take advantage of these.
3. Train your team
Your team should feel comfortable and confident discussing finance options with your customers. This will ultimately help customers to find the right product or service that suits their needs and their budget. In order to have these helpful, honest conversations, your team will not only need to understand the ins-and-outs of the finance products on offer, but also the benefits of finance for the customer.
We provide a variety of training solutions for our retailers, from e-learning modules to online or face-to-face training sessions. This helps to ensure sales staff are helping your business to harness the power of finance.
4. Allow customers to check their eligibility
Customers might be aware of the finance options available, but they will also want to know if they’re eligible.
Soft search allows customers to check their eligibility for finance with no impact on their credit report. They’ll shop with much more confidence if they know they’re going to be accepted for their preferred finance option.
5. Introduce tailored finance options
We’ll let you know how much a customer can borrow, so they can browse with a max figure in mind. This provides an ideal upsell opportunity for your team.
Our max loan feature is available at any point in the customer journey – the customer simply answers a few questions and we’ll let them know the maximum amount they can borrow. This supports customers who might prefer an upgraded product or who discover they can actually afford to add a few more items to their basket after all.
When combined with our soft search feature, there’ll be no footprint on their credit file either (though we will need to run a full credit check if they decide to apply for finance).
6. Offer finance responsibly
It’s all well and good upselling to customers, but you must ensure that your customers are treated fairly at every stage too. Finance should only be offered to those who can comfortably afford their repayments, to ensure that your customers don’t end up falling into debt they can’t manage.
At Novuna Consumer Finance, your customers are our priority too. We have robust credit and affordability checks in place to ensure that we only offer finance to suitable customers. This helps to protect both your customers and your business.
Working with Tredz to secure sales and boost ATVs
We’ve partnered with Tredz, one of the UK’s leading bike brands, to offer flexible finance options to their customers.
Bike enthusiasts might come into store or browse online with a set budget in mind but, once they know they can spread the cost and extend their budget, often choose to buy the model or accessories they really have their eye on.
This provides a truly flexible, personalised customer experience – something we know the Tredz team are particularly passionate about. And, from a business perspective, the availability of finance helps to convert customers and improve average order value too.
Novuna help us put the customer on the bike they actually want, rather than the budget they came in with.
– Mark Edmunds, Store Manager
Find out more about offering finance with Novuna
Whether you’re looking to switch providers or start offering finance for the first time, we’re here to help.
Written by
Darren and his team of Relationship Managers are passionate about helping our retailers to make the most of their finance offering. The team builds strong relationships and delivers outstanding service and support to our retailers. Darren talks frequently about the importance of having the right finance proposition in place which can deliver significant benefits to customers and in turn drive sales growth for our retailers.
