By Lou Pagliarini on Jun 4 2010 - 5:55pm


Consumer Credit As Marketing Tool

Lou Pagliarini is consumer electronics and appliances VP of GE Money 

There are many signs of encouragement for electronics dealers including  a stabilizing housing market, growing consumer confidence and pent-up demand in the marketplace.

As we emerge from the recent economic downturn, retailers are looking for more ways to meet this increased demand and generate sales.

Dealers also need to understand other changes to the retail landscape in recent months.  New federal regulations and tighter credit have reduced the financing options available to consumers including less access to home equity loans and lower credit limits and higher interest rates on some bankcards These changes have caused some lenders to exit the business altogether.

Consumers also have changed.  The current household savings index - which is at its highest levels in years - indicates that consumers are more value- conscious than ever, and they want to make sure that their purchases fit within their monthly budget.  Meanwhile, the competition among retailers is fiercer than ever.

To succeed in this new environment, dealers must have the right mix of marketing, advertising and consumer financing to attract customers and encourage them to buy.  The most basic ingredient in this formula is an effective consumer credit program; here are several best practices to help CE/Majap retailers stay competitive with financing:

  1. Offer credit early and often - Consumer financing provides incentives for consumers to come in and shop, which helps you close more sales and increase average tickets. Data shows that CE sales processed through store credit programs are consistently higher - more than double bankcard purchases.

1.2.      Balance your promotion mix - By using a mix of promotional terms, retailers can effectively manage cost of sales while giving customers attractive, flexible payment options. Work with a provider who allows you to track your promotional mix online with detailed reporting.

1.3.      Use financing to drive organic growth - Customers who open a line of credit with your business are more likely to make future purchases with you. Most private label credit providers have developed tools to let you quickly and easily contact your cardholder and know how much available credit they have with your store. Use this information to cultivate customer relationships and get your “best customers” to spend more later.

1.4.      Spend smarter - Maximize your marketing budget by targeting your best customers. Ask your in-store credit provider for insight on how to target prospects whose demographics best match your most profitable, existing customers. Online marketing toolkits enable you to search online for viable prospects using specific demographic filters such as household income, gender, marital status, etc.

1.5.      Continue to advertise financing- Gaining customer ‘mind-share’ is critical - don’t let your competitors be the only ones talking. Use detailed advertising guidelines and templates from your private label credit provider to create effective, engaging ads that meet current regulatory requirements.

1.6.      Make financing EASIER for customers - Online application processes can become a seamless part of your sales approach.

The best credit providers don’t just offer financing programs, but rather are committed to sharing marketing and technology expertise to help you be and stay successful. Be sure to ask your financing provider for online tools and services that offer instant access to program performance metrics and sales and marketing tools that leverage in-store financing to reach new customers and drive growth.

A business boom may be just around the corner if you have the right tools in place.  Give your customers the motivation and buying power they need by offering an affordable and effective consumer credit program that serves as a vital part of your marketing plan, not just another payment option.

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