Increasing Customer Retention with Invoice Financing
These days, there are a million and one ways to build customer loyalty. With the increasing presence of social media in every facet of our lives, it is becoming easier than ever for businesses to connect with customers. Brands like Netflix and DiGiornio interact with their customers and in doing so, build a trustworthy, relatable brand that customers return to over and over again.
This also means that it's becoming increasingly challenging for “the little guy” to build brand trust. Small business owners have to get creative and offer additional perks to create customer loyalty and long-term retention with their brands. This is where Ario, a modern digital banking platform comes in, offering customized banking services with your brand, when and where your customers need them.
So, what is one of the most important ways to keep customers coming back? Convenience. What is one of the most accessible means of creating convenience for your customers? Offer payment terms through Invoice financing.
Why is customer retention so important?
Of course, any business needs to acquire new customers. However, focusing all of your efforts into acquiring new customers rather than retaining existing customers can be a severe drain of resources. In fact, “keeping customers coming back will continually result in a greater ROI -- and it costs 5-25X less.”
Focusing business efforts on customer retention has many benefits. Not only will you end up earning more and spending less, but, keeping existing customers also creates a better conversion rate. These customers trust you, you can understand and predict their needs, and the sale is that much easier.
Working with existing customers also means spending less time and money on marketing efforts. They already know you and your product, so the marketing cost per customer will be significantly reduced when selling to previous customers.
Establishing a long-standing relationship with loyal customers also allows you the unique opportunity to receive customer feedback. By asking and listening, you can take active steps towards improving your business without the risk of scaring a new customer off.
How do I retain more customers?
As we said before, customer retention is increasingly becoming challenging for small businesses. To stand out, you have to get creative and stay in tune with your customers’ needs.
There are many apparent options a business can use to increase customer retention with loyalty programs (“Make nine purchases and earn the tenth for free!”), referral programs (“Tell a friend about us and earn 15% off your next order!”), or discount codes (“As a thank you, use this exclusive code for 30% off your next order!”).
While those are useful tools to help a customer make a purchase, there are other, critical issues, that every business faces that you can help alleviate like cashflow. Using invoice financing, you can offer payment terms to your customers and allow them to manage their cash flow more effectively while making your business their go-to supplier.
Every business customer wants better payment terms and options to finance their purchases. They are looking for any way possible to get a better handle on their cash flow. However, offering credit to your customers can be difficult and dangerous as you want to maximize your own businesses cash flow and ensure you are protected from customers who are late to payments. Often, businesses skip over offering financing or payment terms as it's too painful. When they do offer terms, they are usually minimal (15 - 30 days).
Invoice financing allows you to protect your cash flow while giving your customers the flexibility of different purchase options. Invoice financing is a form of short-term borrowing that is extended by a lender to its business customers based on unpaid invoices. Through invoice factoring, a company sells its accounts receivable to improve its working capital, which would provide the business with immediate funds that can be used to pay for company expenses. Invoice financing allows the unpaid invoices to serve as collateral.
As a business, you can utilize invoice financing to optimize your cash flow, while giving your customers the benefits of extended credit or payment terms. It becomes a win-win that helps to drive customer loyalty and retention.
A primary key to success in a competitive world of business is to “make your products and services as accessible as possible.” According to one marketing technology brand, “investing in technologies that can evolve alongside your business and optimizing the services you offer to make each store visit more efficient, will allow store associates to focus more on their personal relationships with customers and improve the overall shopping experience.”
How can you offer invoice financing? Ario.
One way to utilize technology to provide additional convenience to your customers is through an invoice financing app like Ario. Invoice financing is a unique way to provide a streamlined and convenient experience for your customers. Also, because this is a service that is not commonly offered, it also allows you to stand out against your competitors.
Ario is a third-party app that any business owner can use to provide a more convenient customer experience. It allows your customers to conveniently log on, fill out a few questions, and receive immediate access to funding. They provide on-the-spot loans for your customers and manage all of the technology and logistics.
Customer retention can be increased through loyalty programs, rewards programs, and other creative ways. However, one of the best ways to keep customers coming back is to provide them with a more convenient shopping experience. By using invoice financing technology like Ario, you’ll be able to establish trust with your customers, reduce the stress of acquiring funds, and make it all happen in just a few minutes with an easy-to-use mobile app.