On April 17, ASA’s monthly Webinar Wednesday featured a presentation by Aaron Stokes, client services manager for Synchrony, titled “Increase Sales and Your Customer Value Proposition with Financing.”
Stokes taught attendees how to inform and educate customers with the right information and options suitable for them, resulting in a win-win situation for the customers and the shop. ASA Vice President Tony Molla kicked off the webinar by welcoming attendees and introducing Stokes.
Stokes began by identifying common retailer challenges, including retaining customers, attracting new customers, dealing with declined services and increasing overall sales. He then delved into how financing can help reduce these challenges.
Based on a recent report by the Federal Reserve Board, Stokes said, 4 in 10 Americans do not have the cash on hand to cover an unexpected $400 expense. He pointed out that the majority of the remaining six people would like to have financing options to spread out payments, citing the common practice of financing a cell phone as an example.
“Consumers want to be able to better manage their money,” Stokes stated. “You’re not only financing their car---you’re helping finance their life.”
Stokes shared that 79 percent of consumers start their research online, emphasizing the importance of a website that functions well and that explains what financing options your shop offers as well. While 61 percent conduct in-store research, 39 percent bring their shop in for an estimate. Consultation with family and friends is important to 31 percent of consumers. Stokes pointed out that 66 percent have decided on their payment method before ever entering the shop, 20 percent research financing options, and 31 percent obtain financing.
Stokes then explained the differences between primary, secondary and tertiary lenders. Primary lenders, such as Synchrony, offer promotional financing and purchase rebates. These tend to be reserved for customers with better credit. Secondary lenders are geared towards the credit-challenged but generally offer reasonable consumer terms. Tertiary lenders are a last option for extremely credit-challenged consumers but offer extremely high consumer terms.
Concerning tertiary lender options, Stokes warned, “People look at auto body shop as family. When you’re with family, you want to be taken care of and be reassured that everything is going to be ok. We trust them. We don’t want you to offer these financing options to your family unless there’s no way they can be approved through better means.”