4 Steps to a Better In-Store Credit Application Process

Furniture World News Desk on 10/17/2018

Many customers walking into a furniture showroom looking for new sofa or dining table may require financing to make the purchases they want and need. Smart store owners understand and provide a consumer-friendly, in-store finance application process rather than risk losing these potential buyers.

It sounds simple. But it takes thought and planning. A bad finance process may be no better – and maybe worse – than no program at all. Any program needs to meet the needs of shoppers with high credit ratings to young adults still building credit histories and those who may fall in between.

There are basic elements any successful plan should include. Make sure your showroom has these four bases covered and you will likely have a winning finance program.

Privacy

Customers really don’t like sharing their personnel financial details with sales associates. And that’s what happens in stores still using a pen-and-paper application process or verbally requesting the information. Shoppers might walk away rather than go through this potentially painful method.

What works is a private process, one in which customers can privately enter their information into a kiosk, tablet or store-owned computer. The only role of retail personnel should be pointing out the location of the application device.

And this process works better for employees as well. Talk with a few of them and they’ll tell you the old credit application process was intrusive and left them feeling uncomfortable.

There are a couple of other privacy issues involved. Make sure your process includes properly storing or destroying any application data. Or better yet, use a system where everything is created and shared with lenders online. And make sure the line between the store and your finance providers is encrypted and secure. You don’t want hackers getting into customers’ private information.

Ease of Use

It should take no more than five minutes to complete an in-store finance application. All that’s needed are the basics such as name, address, telephone number, employer’s name and monthly income and expenses. Make it much more difficult than that and a customer might still back away.

Let the customer review what he or she has entered and then make it clear where the application is going when the “send” button is hit. People don’t like surprises when it comes to their finances.

Quick Decisions

The application has been filled out and submitted. And now everyone, the customer and sales associates, wait. Don’t keep them waiting too long. Shoppers come into the store wanting new furnishings and they want them now. Their time isn’t unlimited. The pen-and-paper credit process might require a customer to come back the next day for the results. And every retailer knows that once a customer leaves, the chances of closing a sale are dramatically reduced.

With everything online and computerized, an application decision should be returned in seconds. Don’t be afraid to work with your lenders if that’s not the case. Remember, they don’t make money if you lose potential customers.

Second looks

Not everyone has a credit score that attracts a primary lender. These customers may have to consider secondary credit providers. But they shouldn’t have to go back through the original process to be considered by these lenders.

You want a frictionless process. If the primary lender declines the application, it should, with the customer’s approval, flow to the next option. That process saves time and results in more shoppers receiving the financing they need.

Once approved, customers can show the confirmation and two valid forms of identification to a sales associate to make an immediate purchase.

It’s not unusual for a furniture showroom using a system with these customer-friendly processes to see applications increase by 20 percent.  Some retailers report a 40 percent jump in approvals with as many as 90 percent of applicants approved by one financing layer. And store sales can increase by 30 percent.

Customers know what they want. It’s the retailer’s job to see they get it. In a highly competitive marketplace, traditional furniture retailers need to take advantage of all the tools at their disposal. Creating a painless, non-threatening credit application process is a great first step in that direction.

With the right finance solution in place, customers can prepare for their delivery date. Retailers increase sales and build customer loyalty. It’s a great situation where everyone wins.

Kevin Lawrence is vice president, sales and marketing for Versatile Credit, the leading provider of in-store, self-service credit application solutions.