One Key Data Point That Can Increase Retail Traffic & Sales

Better motivation to shop. Better closing tool. Better customer experience. All things you can achieve if you just know how your customer wants to pay and can customize the experience for them around how they intend to pay for major purchases like furniture or appliances. That was the subject of a recent conversation with America's Research Group's CEO, Britt Beemer.

"Most companies don't understand what an important piece of information that is," said Britt. "And even fewer know what to do with the data if they have it.Too frequently, furniture retailers focus on a 0% financing offer, when less than 25% of the customers take advantage of that payment option."

Now, I know that having a big 0% finance offer is important to making a sale seem big when promoting an event. But if so few actually take it, when it comes to direct marketing and in-store selling you need other options to convince the customer to shop and to buy. This is where knowing how they intend to buy can be used to your advantage.

How do you know their preferred payment method? With your existing customers, it's easy. They'll probably repeat the way they paid the last time. For new customers it's one of the important pieces of insight the salesperson should gain early in the selling process. They can do this simply by asking, if you were going to buy today, how would you want to pay?

Here are the major ways customers will pay:

Cash/Check
Visa/MasterCard/AE/Discover
Credit cards with points/perks
Store credit card
0% Financing

If you have this information on your existing customers, you can customize your direct marketing efforts with a payment offer that relates to how they would like to pay. And if you make your offer relevant to the way they want to pay, they are more likely to respond. This is because they feel comfortable that you understand them truly as a preferred customer, which will result in more traffic.

How do you customize per payment method? Let's suppose your direct mail offer is 50% off an item plus 0% financing. If you're sending to someone who is likely to pay by credit card, you could offer this instead: 50% off an item plus an extra 5% off your purchase if you use your credit card. Or if they're using a card with points/perks, you could offer them bonus points if they buy with their perks credit card.

You can gain additional insight from cross referencing what the customer buys with how they pay for different types of transactions. For instance, staying with the furniture store example, how does their payment method vary by whether it's a:

Large transaction – multiple rooms
Room group
Single item

This sort of segmentation will show you patterns that will aid in tweaking what offers you send to which customers, especially if you can use your data to predict what they are most likely to buy next. Also, we know if someone has a store credit card, they're more likely to come in to buy right after paying it off, using that same card – so you can offer them up a promotion specifically for them based on their preferred payment method and likelihood to buy now.

When it comes to the in-store experience with new customers, asking how they want to pay opens up a dialog that allows the salesperson to offer up a relevant solution to their personal need rather than offering a litany of payment options. Rather than giving them a whole sheet listing every possible offer, that is likely to make the customers eyes glaze over, you can then serve them up offers that specifically match the way they intend to pay.

For instance, if they plan to pay cash, you can tell them you're able to give cash customers an extra 5% off the sale price today. If using a credit card, you can look at the options we discussed above. This not only acts as a better closing tool, it enhances the customer experience in-store, because it is one customized to their specific situation.