Your business might be providing great value with its products and services, and traffic towards your website may be skyrocketing. But the sales don’t seem to be consistent. That’s because how you price matters more than you realize.
The budget of your potential customers plays a major role in influencing their buying decision, especially at the “Check out” stage of the process. Buy Now Pay Later can help in terms of converting these potential customers into long-term buyers.
Buy Now Pay Later (BNPL) is a sales method that has gained more popularity over recent years, especially amongst the younger generation. It allows the buyers to buy what they need when they need it and pay the entire amount gradually without hurting their pocket in one go.
Perks of Buy Now Pay Later for the customers
The option’s name is self-explanatory. However, it is more than just that for its target audience. Let’s understand the perks of the Buy Now Pay Later option for customers.
Great option in times of need
Ever since the pandemic hit, financial stability has been a major concern for many. Bulk buying became common, but due to salary cuts and layoffs people faced financial troubles. During that phase, Buy Now Pay Later became a go-to option.
And now when things are getting better, people are still hooked on to the idea of paying in installments rather than paying in one go. It makes them see things from a more affordable and accessible perspective.
It’s more flexible and convenient
People who are more accustomed to online payments than carrying cash will find Buy Now Pay Later as a more flexible and convenient option on the go. It even allows them to buy what they need without worrying about paying a huge amount on the spot. They can manage their funds better by opting for the type of installment that suits them best.
It’s more affordable
The BNPL choices offer a less expensive payment option than credit cards since they often have lower fees and interest rates. Credit cards get their revenue through interest rates and late penalties. However, opting for the Buy Now Pay Later can be more beneficial and budget friendly for customers.
How does buy now pay later work?
We have discussed the advantages of BNPL. But how does it work? Purchase Now Pay Later, or BNPL simply operates like this: a consumer purchases something now and makes the payment for it later.
This process happens in the following way:
Adding items to the Cart
Before opting for any payment option, the customer fills their cart with the products they are looking to purchase.
Payment Mode
Upon checking out, the customer gets to choose from multiple payment modes. Here, the customer chooses the Buy Now Pay Later option.
Initial Payment
Now the customer has to divide the overall payment into smaller ones, over a few weeks or months. Generally, four to six smaller payments are made. At the time of checkout, the customer only pays the first installment.
Checkout and Delivery
The service provider completes the order as usual and sends the package to the customer. The BNPL provider immediately pays the full buy price to the service provider, less any processing fees. The BNPL provider then receives the remaining amount from the customer as installments based on the tenure chosen by the latter.
Buy now pay later for small businesses
Small businesses are always on the lookout for avenues by which they can increase their sales and visibility in the market. And online payment options are one of them. The inclination towards online payment has increased significantly. This is where the option of BNPL – Buy Now Pay Later comes in.
Buy Now Pay Later has provided small business owners with a way forward to get more sales. This option makes it easier for the buyers to buy what they want with no worries about affecting their budget. This attracts more users to explore other products as well that are in store.
Let’s discuss some of the benefits in detail:
It can convert potential customers to buyers
When a user is browsing through your website, they might be intrigued to buy certain things right away but may still avoid doing so because of their budget. However, BNPL can make them rethink their decision and purchase instantly as it will now seem easier and more affordable.
Buy Now Pay Later proves to be a good conversion technique to increase sales. As customers are able to make heavy purchases at once and pay in installments.
It can help improve the customer lifecycle
The lifecycle of a customer begins from when they first hear about your business to the time they make their first purchase. Many other factors like marketing, conversion, customer retention, etc are involved throughout this lifecycle.
Providing the option of Buy Now Pay Later can help you set apart yourself from your competitors in front of your potential customers. It can make their shopping experience better and more affordable. Once a customer knows about the BNPL option, they might want to come back and make more purchases, increasing the customer lifecycle.
BNPL lowers friction across the whole buying process
Because it decreases friction, BNPL is very effective at increasing conversion. Customers may view prices at two critical points throughout the purchasing process: once when they visit a product page and next when they check out. If they are offered BNPL, they are shown a much lower and reasonable value. This eliminates the shopper’s hesitancy both before they decide to add something to their cart and after they click the “pay now” button.
Important points to remember while using Buy Now Pay Later option for your small business
Now you know how the Buy Now Pay Later option can help your small business. But there are some important points you must keep a check on before and while adding the option in your payment modes.
Decide on a reputable provider of buy now pay later
Choosing a BNPL supplier is the first and most important step. Make sure to evaluate the services offered by the provider and how they will impact the user experience.
State Your BNPL Payment Choice
BNPL enables customers to make larger purchases that they would not have been able to afford all at once in the past. Sales may increase as a result, particularly for internet retailers. Businesses must emphasize the choice early in the buying cycle, before customers feel an item is too expensive and leave the funnel, to successfully drive such conversions.
Examples include adding a BNPL option logo and a brief description next to the add-to-cart button or having a popup message on product pages.
Find where customers usually drop off in advance to identify the ideal placement and add BNPL option there. Consider putting BNPL information near the search bar, or on the category, or a product page for instance, if a significant part of traffic drops off on the product description page.
On your checkout page, include a brief description of your BNPL option
The cost might quickly rise as shoppers add things to their shopping carts. When customers see the total, they might decide to quit their cart, but the BNPL message and other reliable payment methods might persuade them to finish the transaction.
Have design and UX teams explore various positions, such as before and below other payment alternatives, to make the BNPL option stand out. Exit-intent popups that reference BNPL’s accessibility may help promote conversions. The only way to determine which format will encourage your visitor to convert is via testing.
Track your progress and make necessary adjustments
Once the option is out and running on your website, make sure to track the progress it’s making to assess its efficiency. It is necessary to see how a certain marketing or sales strategy is doing to identify its success for your business.
Buy Now Pay Later is not only helpful in terms of increasing your sales. High order value is also an added advantage when the customer is open to splitting up the payment.
The takeaway
Nowadays, people are more accustomed to bulk buying to save time, and Buy Now Pay Later helps them to make these purchases easier on their pocket. By fully understanding its potential and using it for your small business, you can take advantage and leverage it for conversions and long-term customer relations.