Article sponsored By PayPal
Buy Now, Pay Later (BNPL), is a digitalized version of old installment plans. BNPL allows consumers the flexibility to divide large purchases into multiple monthly payments. This is all interest-free. This industry is rapidly growing, with 37.7 per cent of US consumers opting for it as of July 2020.
Customers love BNPL. It encourages them not only to budget well, but also helps them save money on higher-priced goods. 44% of consumers agree that BNPL is very or somewhat important in determining their spending habits.
It is easy to see why this popularity is so important. The Buy Now, Pay Later option allows consumers to spread large purchases over several months. It's an easy way for consumers to improve their financial flexibility and get credit without having to pay interest or apply for a card.
BNPL is a way for online retailers to attract customers and grow their revenue. Business leaders are paying attention. Here's how you can get started with BNPL for your business.
1. Choose a provider that you trust in Buy Now, Pay Later
First, choose a BNPL provider. This feature is available in many apps and tools, including PayPal's Pay in 4. While each tool might offer similar integrations and features, there are many differences.
PayPal's service integrates with PayPal wallet to allow users to manage their payments easily.
You should consider trust platforms when comparing different BNPL options. Popular options such as PayPal can increase trust and increase sales. A recent IPSOS study showed that consumers are 54% more likely to buy from online retailers that accept PayPal. Additionally, a Morning Consult survey revealed that PayPal is the 2nd most trusted brand in the entire world.
2. Highlight your BNPL Payment Option
BNPL allows consumers the opportunity to make larger purchases than they otherwise would not be able to afford. This can drive sales, especially online. Businesses should highlight this option as early as possible in the buying cycle to encourage conversions. This is before customers decide that an item is too expensive and leave the funnel.
CMOs might have their marketing teams test messaging on product pages, or add a logo and short description to the add-to-cart button.
You can determine the best place to put your customers. Consider adding BNPL information to the category page or the product page if you notice a lot of traffic leaving the product description page.
The cost of items added to a shopping cart can quickly mount. The final cost can cause them to abandon their shopping cart. However, the BNPL messaging and other trusted payment options might encourage them to make the purchase.
Design and UX teams should test various placements to make the BNPL option standout. Conversions may be encouraged by exit-intent popups that mention BNPL.
Only testing will allow you to determine the best format to convert your audience.
Testing is essential to a successful BNPL marketing strategy. Your marketing teams can pivot as necessary by understanding what works and what doesn’t. You might, for example, edit your direct marketing copy or modify the design to test other copy options, placement of BNPL mentions and ad campaign target.
BNPL doesn't just drive sales. It can also increase average order values, as users are more likely to purchase an extra shirt or try out a new cologne if they can split their payments. An analysis of PayPal data from October 2020 to January 2021 shows that Pay in 4's average order value was 39% more than standard PayPal transactions.
These are some KPIs that your team should monitor to measure the success of your BNPL strategy.
- Conversion rates overall
- Total sales
- Cart abandonment rates
- Average order value
- Customer lifetime value
What should you do if BNPL doesn't produce the results you want? You should test each step of the process. How can users find out more about the BNPL option Do you think it should be earlier? Which segment of your audience is it? BNPL is extremely popular among younger users.
Frequently Asked Questions: Buy Now, Pay Later
What is “Buy Now, Pay Later”?
Buy Now, Pay Later (often abbreviated to BNPL) allows consumers to divide their purchases into multiple, often interest-free payments.
What are the advantages of BNPL for ecommerce businesses?
BNPL can encourage consumers to buy and sometimes even allow them to spend more. Offering a trusted BNPL option can help increase revenue, especially since more consumers are using BNPL options.
What is PayPal's “Pay in 4”?
PayPal's Buy Now, Pay Later option allows customers to split their purchases into four interest-free installments, one every two week, beginning on the day of purchase. Pay in 4 is available for eligible purchases of $30 to $1,500. Find out more.
Pay Later, Buy Now Conclusion
Did you know that GenZ and Millennial consumers are 28 percent more likely than GenZ to shop with merchants who offer a buy-now-pay later option? Are you hesitant to offer this new payment option for your business?
Your competitors may not be doing this, and your customers could reap the rewards of loyalty and increased sales.
Find out how PayPal's Payment in 4 can help drive eCommerce growth.
By: Neil Patel
Title: How to Attract Customers with Buy Now, Pay Later Options
Sourced From: neilpatel.com/blog/buy-now-pay-later-2/
Published Date: Tue, 21 Sep 2021 13:00:00 +0000