How companies can make the most of Buy Now, Pay Later services

This year, many shoppers are waiting until the last minute to finally purchase the items they’ve been adding to their wish list for the past few months. Unfortunately, in today’s environment, some might not have the funds on hand to get everything on their list.

Buy Now, Pay Later (BNPL) is a way customers can afford these payments. The scheme allows customers to split their payment across multiple weeks without accruing interest—as long as they don’t miss their payments—which has led to its soaring popularity during the pandemic. It means many customers can enjoy online shopping while still being able to afford their bills.

A study by Clearpay shows that Gen Z consumers are 42 percent more likely to purchase an item if they can split it across multiple payments; that likelihood goes up to 69 percent for Millennials. The popularity of BNPL has also led companies in various industries to offer these services, including retailer ASOS and food delivery company Deliveroo. Customers can benefit from BNPL in almost all aspects of their lives.

As great as it all sounds, companies that offer a Buy Now, Pay Later option must ensure that it improves the customer experience, as it also has the potential to worsen it. A customer who is not aware of additional fees after late payments might find it difficult to trust a company again. So, how can businesses use these financial services safely to improve their customer experience?

Communication is key

First things first: ensuring your customers know what they’re in for is going to save you in the long run. 81 percent of shoppers state they have been waiting longer to buy their gifts this year, so in the rush, customers might be tempted to spend more than they can afford.

Without proper communication about BNPL services, your customers could risk extra fees, damaging their credit and prolonging the repayment processes. While most companies use third-party services (such as Klarna or Afterpay), many customers might still project on your company. This can negatively impact your bottom line—half of customers will walk out the door after one bad experience.

To avoid such scenarios, companies must make sure their customers understand the agreement they’re signing. You can do this by informing sales staff in-store or clearly communicating how the repayment scheme works on your website.

Create great omnichannel experiences

While BNPL services offer benefits to customers—especially in today’s climate—companies must ensure their use eases the customer experience, instead of creating friction. One way to do that is by enabling these services on every channel customers use to purchase their items. In other words, you need to adapt BNPL offerings to your omnichannel strategy.

An omnichannel strategy is vital. If your customers shop in-store and want to buy an item, but they can’t access BNPL services while they know they can online, chances are they will try their luck in another store before giving it another shot online. This is especially true with younger consumers such as Gen Z: 88 percent report a preference for omnichannel marketing.

An omnichannel strategy allows companies to enhance the visibility of the benefits they’re offering to their customers and also helps them retain their customers.

Customer service: No room for error

Good customer service is undeniably important, no matter what companies are selling. Customers are sometimes willing to forgive a surprising amount of mistakes during the holidays—from delivery delays, issues with the quality of products, or even longer wait times—but there’s one thing most of them (92 percent) are not willing to forgive: bad customer service.

It’s very likely that many shoppers will use BNPL services, which could lead some of them to spend above their means. And in these stressful economic times, it’s crucial for customer service agents to be helpful and empathetic, as 71 percent of customers say these attributes are most important when contacting customer service.

Additionally, it’s critical for agents to be trained appropriately for BNPL offerings. Customers could get even more frustrated when speaking to agents who can’t assist with their queries or who give them incorrect or misleading information. If a shopper purchases an item using BNPL services and wants to return that same item, an untrained customer service agent could very well translate into a negative post-purchase experience.

Considering only 16 percent of customer service agents are satisfied with the level of training they receive, it’s no surprise that most consumers are increasingly noticing a lack of agent training. It might not matter which new, innovative, and immersive products companies offer—if their customer service center can’t keep up, the battle to win and keep customers will be never-ending.