Business Tips

Driving Repeat Purchases: How Pay After Delivery Builds Customer Loyalty

Last updated October 2023

Customer loyalty is vital for driving business growth – loyal customers are the key to retention, brand-building, and referrals. They also tend to be the most valuable customers, making up 60% to 70% of sales on average. 

That being said, customer loyalty isn’t easy to obtain – there are many factors that you should consider when creating a strategy to increase loyalty, and payment options are a core element. 

Pay after delivery can help to drive affinity amongst customers and ultimately build loyalty, helping you build a brand that delivers customer satisfaction and encourages retention. Read on to learn about pay after delivery and how you can use it to build customer loyalty.  

Understanding Pay After Delivery: Definition and Function

Pay after delivery (or PAD) is a payment processing strategy that allows customers to make a purchase, receive it, and test it out for quality, fit, or function before paying for it. 

If they’re happy with the product, their payment will be processed through the payment platform they choose. If they want to return it, they’ll send it back by following the return process that the retailer provides. 

Splitit and pay after delivery

With Splitit, you can provide customers with a PAD solution that has the added benefit of BNPL installment payment options. When customers decide to keep a purchase, they can pay for it even more flexibly by using their existing credit card to fund a series of installment payments. 

This encourages customer loyalty in a variety of ways. PAD already accounts for 40% of payments in select European countries and is set to grow in North American markets. By providing a variety of flexible payment options, you’re presenting your customers with the options they’re looking for at the checkout. 

Allowing customers to access the service that they want will differentiate you from competitors, add value to the shopping experience, and ultimately drive loyalty. 

Learn more about how payment processing strategies can help to grow your business.

PAD helps to build customer trust and confidence 

When looking to build a loyal customer base, pay after delivery can help to build trust and confidence between your customers and your business. Integrating PAD into your shopping experience can boost brand affinity in a variety of ways.

PAD creates an enhanced purchase experience

The core benefit of PAD for customers is that it allows them to see a product in person before committing to it financially. They can assess the quality, test it out, and do whatever they need to do before deciding whether they want to keep it. 

As well as providing your customers with this opportunity, incorporating PAD into your shopping experience shows your customers that you trust them, as you’re willing to send them merchandise before they’ve officially paid for it. It also shows that you trust your products, suggesting that you’re confident with their quality and you’re willing to share them with customers ahead of an official transaction. 

When incorporated into your brand strategy, PAD serves as a trust and confidence builder, which can help to drive loyalty between you and your customers.

PAD allows for transparency, flexibility, and better cash flow

Pay after delivery provides financial benefits for your customers, as they can manage their money and their purchase decisions at the same time. 

Traditional ecommerce payments require customers to pay upfront – if they decide to return an item, their money is tied up in the return process. With PAD, they only pay if they decide to keep the item. This provides your customers with the opportunity to make transparent purchasing decisions while helping them plan for better cash flow within their overarching budget. 

Splitit offers even more flexibility, as customers can choose to pay the entire purchase amount upfront or via installments. Once they decide to keep their item, they can choose a payment solution that fits their budget and lifestyle. 

As Splitit operates using their existing credit card, there’s no need to fill out long applications, take out an additional line of credit, or pay additional interest or fees – everything they need to fund their purchase in a way that fits their budget is already at their disposal. 

Customer satisfaction and try before you buy

Pay after delivery can help you to deliver a more satisfying shopping experience for your customers. With the knowledge that they’re able to try out products before paying for them, it can ease anxiety and allow your customers to focus their decision-making on factors beyond financial considerations. 

When they receive a product and decide to keep it, they’re more likely to be content with their purchase and their overall experience. This creates a positive impression of your brand, which helps to drive loyalty.   

Fostering Long-Term Customer Loyalty 

Having a loyal customer base is core to business success. When factoring in conversion, purchase frequency, AOV and referrals, studies suggest growing your customer retention and loyalty by 5% can boost profits by up to 95%. 

Diversifying your payment processing options by incorporating PAD can help with key aspects that drive growth. 

PAD and repeat purchases and higher AOV

PAD can remove barriers to conversion and build trust, which creates a positive experience that your customers will remember. 

Once they have been through a successful PAD experience, customers will trust your brand even more, and are more likely to return. This creates a culture of retention, which can grow into a loyal customer base – people who have made multiple purchases from a brand multiple times are more likely to return, and this likelihood increases after each subsequent purchase.

As well as increasing conversion among existing customers, PAD has the potential to drive higher AOV. The longer a customer has been shopping with a brand, the more money they spend on an average purchase. Customers may also be more likely to make larger purchases knowing they have the chance to test, assess, and decide what they want to keep before committing financially. 

PAD, referrals, and brand advocacy

If you can utilize PAD to create a great brand experience that builds customer loyalty, you can create a positive growth cycle based on referrals and retention. 

As well as returning more frequently and spending more money themselves, loyal customers are more likely to recommend your business to others. This rapidly speeds up new customer acquisition. 

Positive referrals can supercharge your loyal customer base – new customers who have been referred by other satisfied customers have a 37% higher customer retention rate. They also bring a higher AOV – customers acquired through referrals spend 200% more on average.

PAD and brand-building through positive customer experiences

Providing customers with the options they’re looking for means you’re well on your way to delivering a great shopping experience. Considering that 98% of customers consult reviews before making a purchase, creating a great customer experience goes hand-in-hand with building customer loyalty.

Pay after delivery offers multiple points for customer satisfaction, including flexibility in payment options, transparency about products, trust and control over purchasing, the option to pay in installments, and a straightforward returns process. 

Delivering all these benefits to your customers means you’re already on your way to creating great impressions for your brand. 

PAD is a tool that can help you build customer loyalty in a variety of ways. As well as giving your customers the flexible payment options they’re looking for, you’re building trust and creating a positive experience that is likely to result in good reviews, referrals, and repeat business. This can help growth in a variety of ways, from retention and increased conversion to higher AOV. 

With Splitit’s white-label solution, pay after delivery becomes a holistic part of your brand. Get in touch to learn how we can help you incorporate flexible payment options into your shopping experience. 

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