The devil—or God—is in the details, or so they say. What this expression means is that even the so-called ‘inconsequential’ things matter. Customers respond well to good service, dependable product delivery, quality products, and competitive prices. What they also respond well to is ease of doing business or of transacting business with the seller.
The simpler and easier a seller makes the price of acquiring a product the more likely customers are to buy from them. Since money is a pivotal—often deciding—factor in most customers’ decisions about whether or not to buy something, sellers should constantly be on the lookout for ways to make spending it seem much less daunting prospect than it usually is.
One way to do this is by having flash sales and slashing prices; another is by offering customers the freedom to pay for a product or service in increments, by charging them a monthly fee in the form of interest.
What is an EMI? This process of paying for something, over a period of time, at some additional charge for the convenience of avoiding paying for it upfront is called an equated monthly instalment (EMI). Expensive and high-end products, as well as mid-range goods, are typically the kinds of items that businesses like to offer such schemes for.
They tend to attract customers, who would otherwise be put off by price, to actually give these products a second glance. Some EMIs consist of a fixed amount paid at the same time each month, and include both a portion of the principle (the actual cost of the product), and an additional charge or fee. How businesses calculate interest and calculate payments depends on their target audience. In a bid to attract more customers, some businesses even offer what is referred to as 0% EMIs, where the fee for this particular service (in the form of interest), is waived.
The Appeal of EMIs More feels like less: Even though customers end up to paying extra for a product, they are less inclined to ‘feel the pinch’ so to speak when they’re parting with their money gradually. It’s not just the illusion of paying less, it’s also the fact that they’re not parting with a lump sum outright. It’s like covering a huge distance at a steady pace, with plenty of stops on the way, rather than trying to cover it in one single bound. Not all EMIs are created equal:
As mentioned above, 0% EMI schemes—which aren’t necessarily the norm—are often introduced to capture highly competitive market segments. Not all SMBs can afford to offer their services or products at low prices the way that big businesses and companies can. Just as some brands or companies offer rebates and discounts for a limited period of time, you could consider offering 0% EMIs or EMIs with low interest rates in much the same manner. A viable alternative therefore wouldn’t be competitive costs, but a competitive payment scheme. Competitive EMIs are a viable marketing tool, and can play a significant part in attracting customers to your business.
If you are still unsure about implementing them in your business you could try offering them to a small set of customers as a trial and based on the success of the project open it up to your entire customer base.