Issue link: https://resources.greenskycredit.com/i/936999
Do not allow the cost of financing to hold you back! No matter what type of financing you are offering, there is almost always a cost to your business. There are a few plans available at no cost to the merchant (payment card network fees may apply), but if you offer no interest if paid in full within promo/no payment* or low interest financing, your business will incur merchant fees. Above all else, remember this: The cost of your merchant fees is likely to be a small fraction of the additional business you will gain by increasing close rates and average order values. So, no matter how you chose to recognize that cost, it's going to be a great investment in growing your business. A few suggestions: Treat merchant fees as a marketing expense. You should promote financing offers in your marketing programs to attract new customers. This spreads the cost among all of your customers, just like the cost of direct mail, print advertising, events, emails, or any other promotion. Spread merchant fees across your entire pricing structure. For example, if you assume that 50% of your customers will use financing and your average merchant fee will be 5%, you could increase all prices by 2.5%. In this way, those who pay cash will help cover the cost of those who accept your financing offers. Find new operational efficiencies, beginning with financing. Many contractors have taken a queue from the GreenSky® Mobile App and increased their use of technology, such as CRM, estimating, visualization, presentation, etc. Not only does this reduce costs, your customers will be impressed. Keep your eye on the bottom line When the subject of merchant fees comes up, we often pose this question: "Would you be willing to pay $66 to make an additional $1,000 in sales?" Of course you would! So, feel free to account for them in any way you wish, just be sure to keep them in perspective as the high- value investment they are. 12 *Interest is billed during the promotional period, but all interest is waived if the purchase balance is paid in full before the expiration of the promotional period.