Drive Sales and Boost Customer Satisfaction with Buy Now Pay Later in 2023
In today’s consumer-driven world, businesses are constantly searching for innovative ways to attract customers and increase sales. One such tool that has been gaining popularity in recent years is the “Buy Now Pay Later” (BNPL) option. This payment solution allows customers to make a purchase and delay payment, helping to drive sales in several ways. Some of the leading lipa later companies in Kenya include:
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Safaricom
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Aspira
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Sunking
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Flexpay Technologies
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M-Kopa
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Miti
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Lipa Later
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Julla
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Omni4Africa
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PesaPal
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Argility
The Benefits of Offering BNPL Financing
Convenient and Flexible Payment Options
One of the main reasons why the BNPL option is so attractive to customers is due to the convenience and flexibility it offers. Instead of having to pay the full amount upfront, customers can split their payments into smaller, more manageable installments. This eases the financial burden on customers and provides them with greater flexibility in managing their cash flow.
Increased Purchasing Power
The ability to pay for a purchase over time also increases customers’ purchasing power. By offering the BNPL option, businesses can make their products more accessible to a wider range of customers. This, in turn, can lead to increased sales as customers who may not have been able to afford a product upfront can now make a purchase and pay for it over time.
Impulse Buying and Increased Conversion Rates
The BNPL option can also be a powerful tool for driving impulse buying and increasing conversion rates. When customers have the option to buy a product now and pay for it later, they are more likely to purchase the spot. This instant gratification can lead to higher conversion rates and ultimately boost sales for businesses.
Studies have shown that businesses that adopt BNPL financing experience an average 20-30% increase in conversion and a 30-50% increase in average ticket size. By providing customers with the option to pay in installments, businesses can remove financial barriers and make higher-priced items more affordable, thereby encouraging customers to make larger purchases.
Building Customer Loyalty and Repeat Business
By offering a BNPL option, businesses can also build customer loyalty and encourage repeat business. When customers have a positive experience using a BNPL service, they are more likely to return to the same business for future purchases. This not only increases customer retention but also leads to word-of-mouth referrals, further driving sales for the business.
Increased Average Order Value
Another benefit of the BNPL option is the potential to increase the average order value. By providing customers with the flexibility to pay for their purchases over time, businesses can encourage customers to buy more expensive items. This can have a significant impact on the bottom line and contribute to the overall sales growth of the business.
More Repeat Business
The introduction of BNPL financing has been shown to drive repeat business. Customers who have a positive experience with BNPL are more likely to become repeat customers. Some BNPL providers report that up to 90% of their business comes from repeat customers. By fostering customer loyalty through BNPL, businesses can create a reliable customer base and generate sustainable growth.
Types of Financing to Offer
When considering BNPL financing, businesses should select a provider that offers a variety of financing options to cater to different customer preferences. The key types of financing to consider include:
BNPL
The core offering of BNPL financing allows customers to split their purchases into interest-free installments over a specified period. This option provides customers with the flexibility to manage their payments and helps increase affordability for higher-priced items. A good example is the Safaricom Lipa Mdogo Mdogo and M-Kopa, and Keyplax Lipa Later marketing.
Credit Cards
In addition to BNPL, businesses may want to consider offering credit card financing options. Credit cards provide customers with a revolving line of credit, allowing them to make purchases and pay them off over time. By offering credit card financing, businesses can accommodate customers who prefer this traditional payment method. This may include banks and asset financing institutions.
Personal Loans
Personal loans are another financing option that businesses can offer. These loans provide customers with a lump sum of money to make a purchase and then repay it over a fixed period with interest. Personal loans may be suitable for customers who require a larger amount of credit for their purchases.
Leases
For businesses selling high-value items such as electronics or appliances, lease financing can be an attractive option. Lease agreements allow customers to use the product for a fixed period by making regular lease payments. At the end of the lease term, customers may have the option to purchase the item or return it.
By offering a range of financing options, businesses can cater to the diverse needs and preferences of their customers, increasing the likelihood of conversion and customer satisfaction.
Implementing Buy Now Pay Later
To effectively implement BNPL financing, businesses should follow these steps:
Research and Select a Trusted Provider
The first step is to research and select a trusted BNPL provider. Look for providers with a solid reputation, a user-friendly interface, and a range of financing options. Consider partnering with established providers like PayPal or Afterpay, as they offer seamless integration and have built trust among consumers.
Highlight BNPL as a Payment Option
Once you have chosen a BNPL provider, highlight this payment option prominently throughout the customer journey. Feature BNPL language and logos on product pages, shopping carts, and checkout pages to ensure customers are aware of the available financing options. Consider testing different placements to determine the most effective way to capture customer attention.
Simplify the Checkout Process
Make the BNPL option easily accessible during the checkout process. Streamline the payment flow and ensure that customers can select BNPL as their preferred payment method without any confusion or friction. This seamless checkout experience can significantly enhance customer satisfaction and increase conversion rates.
Monitor and Adjust
Continuously monitor the performance of your BNPL strategy and make adjustments as needed. Track key metrics such as conversion rates, total sales, cart abandonment rates, average order value, and customer lifetime value. Use this data to refine your approach, optimize the customer experience, and drive further sales growth.
Wrap Up
The Buy Now Pay Later option has proven to be a valuable tool for driving sales in today’s competitive marketplace. Its convenience, flexibility, and ability to increase purchasing power make it an attractive option for customers. Businesses that offer BNPL not only increase their chances of making a sale but also build customer loyalty and encourage repeat business. By leveraging the power of BNPL, businesses can stay ahead of the competition and drive sales in a rapidly evolving consumer landscape.
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