Customers who understand their buying power will spend more. Financing programs drive more sales and build stronger loyalty.
For larger purchases—like an engagement ring or new furniture—financing often factors into a customer’s decision about what they can buy and when. Actively applying for financing can, however, impact a customer’s credit score. It can cause some customers to pump the brakes when it comes to completing those credit applications.
But there’s something retailers can do before the official credit application process that really puts the customer in the driver’s seat.
At Alliance Data, we recently introduced a new capability called Prequalification.
Prequalification is a customer-initiated prequalification process, which allows brands to reach up to 25% more consumers—like those who have previously opted out of prescreens.
Prequalification allows shoppers to know if they will be approved for a store-branded credit card, without impacting their credit score. It can also help retailers enable their customers to secure those larger purchases.
Less friction means a better customer experience—and Prequalification removes barriers between browsing and buying.
For example, Carly needs to buy some new furniture, but isn’t sure how much she wants to spend. By collecting a few pieces of information from her, the sales associate can give Carly a better idea of what her buying power is today.
It eliminates the uncertainty—and that arms customers with the information they need to decide what purchase is right for them, right now.
Once customers know their buying power, they can better plan for that big purchase.
Above all else, this capability fulfills an industry need—for both customers and brands.
There’s real potential for Prequalification in the retail space because it offers so many benefits. It can help brands reach more customers. More importantly, it helps consumers make better-informed buying decisions when it comes to securing those bigger purchases. In the end, it’s really a win-win for everyone.