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Article 4 min read

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

Discover how companies can use Buy Now Pay Later services to boost their customer experience and increase their bottom line.

By Lilia Krauser, Staff Writer

Last updated February 23, 2024

This year, many European customers are eagerly waiting for Black Friday to finally purchase the items they’ve been saving to their wish list for the past few months. Unfortunately in today’s environment, many customers might not be able to empty their wish list. If only there was a way they could still buy their favourite items, without paying the full price at once.

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

According to Statista, one in three UK consumers uses these payments more frequently than in early 2020. Plus, a study by Clearpay shows that Gen Z are 42 per cent more likely to purchase an item if they can split it across multiple payments, and 69 per cent for Millenials. Its popularity has also led companies to offer these services in various industries, such as retail with ASOS, or even food delivery services like Deliveroo. Customers can benefit from these services in almost all aspects of their lives.

As great as it all sounds, companies that offer buy now pay later services must ensure that it improves their customers experience, as it also has the potential to worsen it. A customer not aware of additional fees after late payments might find it difficult to trust these companies again. So, how can companies use these financial services safely, to improve their customer experience?

Communication is key

First things first, ensuring that your customers know what they’re in for is going to save companies in the long run. 81 per cent of customers state they have been waiting for Black Friday to buy their items–with the rush of Black Friday, it’s likely customers might be tempted to spend more than they can afford.

Without proper communication about these services, your customers could risk extra fees, damaging credit and long repayment processes. While most companies use third party services such as Klarna or Afterpay, many customers might still project on your company, encouraging half of European customers to walk out the door after one bad experience.

To avoid such scenarios, companies must ensure ways to convince their customers to understand the agreement they’re signing. This could be by informed sales staff in-store, or extra visible information on companies’ websites explaining how the repayment scheme works.

The same services on all channels

While BNPL services offer great benefits to customers-especially in today’s climate–companies must ensure that 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, adapting BNPL offerings to your omnichannel strategy.

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

Hence, an omnichannel strategy allows companies to not only enhance the visibility of the benefits they’re offering to their customers, but will also help these retailers retain their customers.

Customer service : no room for error

It’s no surprise that customer service is undeniably important, no matter the services companies offer. Even for Black Friday, customers are willing to forgive a surprising amount of mistakes, from delivery delays, issues with the quality of products or even long queues, but there’s one thing most of them (92 per cent) are not willing to forgive: bad customer service.

With this year’s Black Friday madness, it’s very likely that a great number of customers will use BNPL services, which could lead many of them to spend above their means. And in these stressful economic times, it’s important for customer service agents to be helpful and empathetic to customers, as 71 per cent of customers say these attributes are most important when contacting customer service.

Additionally, it’s also important for service agents to be trained appropriately for BNPL offerings, as customers could get even more frustrated speaking to agents that can’t assist with their queries, or who give them incorrect or misleading information. If a customer 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.

However, with only 16 per cent of European customer service agents satisfied with the level of training they have been provided, most customers are increasingly noticing a lack of agent training. It might not matter which new, innovative and immersive offerings companies offer, as long as their customer service centre can’t keep up, the battle to win over and keep customers will be never-ending.

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