FINAREF.COM - News - Figures confirm credit booster effect



Study	19/09/2006

Figures confirm credit booster effect

A customer survey carried out by FNAC and Finaref last June revealed just how important the availability of credit is in purchasing decisions, showing how valuable credit can be in stimulating spending.

Last May, FNAC ran a marketing campaign on digital television and related products: flat screen television sets, digital video recorders and video projectors. The campaign was organised jointly with Finaref, and was coupled with a free credit promotion. FNAC cardholders were also offered a specific discount. A market survey was carried out during the weeks following this campaign, with the main aim of assessing the attractiveness of the credit promotion. Fnac and Finaref decided to do this because although Finaref does stimulate business for retailers, it is sometimes difficult to evaluate the impact of consumer credit on a retailer’s sales. To what extent is the availability of credit a purchase-determining factor?

The main conclusions were as follows:

• How long before a purchase was the decision taken to make that purchase: 44% of customers stated that they had taken the decision between two weeks and one month before actually making the purchase. 36% of the requests for information during this period related to payment facilities. In 55% of cases, customers sought this information on the FNAC website.

• How well publicised was the offer of free credit and how attractive did customers consider it: 84% of purchasers were familiar with FNAC’s free credit facilities and 90% declared they were interested. 53% of purchasers were informed about payment facilities by the sales staff.

• Credit, a way of boosting sales: In 66% of cases, the availability of credit enabled a purchase to be brought forward; In 53% of cases, it enabled customers to opt for a higher range product; In 43% it enabled customers to purchase accessories or complementary services. Offering credit facilities did indeed boost sales: on average, the amount spent by a customer was 7% higher than initially intended.

• Free credit, a plus for FNAC: There is no doubt that the availability of free credit was decisive in the customers’ choice of FNAC: the customers surveyed gave this as the number one factor in their choice, ahead of promotional offers.

Free credit is a real way for a retailer to stand out from the competition, and is the only advantage which consumers considered substantially better than services offered by the competition.

• Did consumers remember that a credit facility was available? Of all the offers described in a newsletter received by customers, the credit facility was the one which customers most remembered (50%) as against 47% for the discounts.

This study clearly reveals that free credit is more than a bonus. It is an integral part of the product and a decisive factor in the decision to purchase. This study confirms Finaref’s role as a catalyst for the growth of its retail partners.

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