Build Repeat Business, Loyalty
Repeat business is the lifeblood of the automotive service industry. In-store financing can help bring customers back IF you offer the right financing options. The wrong type of financing may actually drive customers away.Give your customers financing options
Consumers appreciate and expect choices, and that includes financing. Many retailers offer multiple payment plans because they know that financing is not one-size-fits-all.
For customers who qualify, a credit card dedicated to automotive needs, backed by a strong financial partner, is the best option because the rates and terms are reasonable and provide numerous cardholder benefits. In comparison, there are few benefits with so-called “no credit required” loans. They often come with fees and high interest rates. Their long-term impact on consumers is usually frustration, which is not good for repeat business.
Why Synchrony’s Car Care credit option is different
A private label credit card, such as the Synchrony Car Care credit card, should be the first financing option you offer your customers. There are plenty of perks and it’s a great way for customers to get the necessary parts and repairs in a manner that fits their budget. However, not all customers will qualify for an in-store card, which is why retailers often have other lending options.
Second-tier source lenders provide “no credit required” financing because there is usually no credit check and most people will qualify. But these loans can sting customers with high interest rates that greatly inflate the cost of a repair job. Such loans may have high application fees and penalties for early payoff. The long-term cost and months of payments can sour the sales experience for your customer and may discourage them from returning to your shop.
“Customer loyalty can be damaged by one bad experience,” explained Louis Kemp of Synchrony, providers of the Synchrony Car Care program, one of the largest consumer credit networks in the nation. “No-credit-required financing seems okay at first glance, but the pricing can be deceptive. The effective Annual Percentage Rate (APR) can be well above 100 percent over the lifetime of the loan. That makes car repair very expensive and ruins the experience for your customer.”
As an example, a $1,500 car repair can end up costing more than $3,000 with a 12-month “no credit required” loan. For some consumers, these types of loans may be their only financing option. But what about customers with solid credit history?
Offer your customers an option that benefits them – and you
Savvy retailers encourage qualified customers to apply for financing through their private label credit program for a variety of reasons that benefit both the car owner and your business. Those who qualify will have a revolving line of credit with a reasonable APR that can be used for repeat purchases at your store, as-well-as credit at thousands of other auto-related shops nationwide, and it is available whenever needed. Additionally, there are no sign-up fees or penalties for early payment.
The Synchrony Car Care credit card also offers special credit promotions such as promotional financing for 6 months on purchases of $199 or more. This allows the customer to pay off the amount over a specified period without paying interest. For example, a repair that costs $1,500 can be paid off in six months with equal payments of around $250 per month – with no interest. No wonder consumer surveys indicate that 88 percent of Synchrony cardholders feel promotional financing makes their purchases more affordable.
If the customer does not pay off the amount in six months, then the normal interest charges accrue. This type of offer costs a bit more to the retailer, but it’s a powerful marketing tool that can attract customers.
A popular program fro 30K shops/retailers
Kemp noted that a quality credit program can be a marketing cornerstone for auto service retailers. Synchrony has millions of card holders nationwide and their Car Care cards can be used at over 30,000 participating retailers as-well-as gas stations nationwide.
This greatly expands your potential customer base. As for local marketing, Synchrony Car Care branded credit cards act as “little billboards” in customers’ wallets – reminding the customer that when the time comes, they can finance their repair needs at your shop. The company provides extensive retail expertise through their Synchrony Connect website along with webinars and other training opportunities. They also assist with marketing and special offers which make ongoing customer communication and engagement easier.
“Our company has been around for more than 85 years, so we’ve picked up quite a bit of useful information about what retailers and customers want,” he stated.
These combined benefits help promote repeat business, a fact borne out by consumer surveys; about 72 percent of Synchrony Car Care cardholders look for promotional financing when they are making an auto-related purchase.
Building repeat business requires more than a friendly handshake and good service. The customer experience includes payment options that make sense. In-store credit programs backed by quality lending partners can be the foundation of a sales and marketing strategy that not only wins customers, it keeps them coming back for years.
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