Yes, it is true. You can make more money when you extend credit to credit worthy customers. The ball is in your court to decide who is credit worthy and who is not.
Top 10 ways to make money extending credit:
- It increases customer loyalty which increases sales through that customer and word of mouth advertising (the best kind!).
- If you have new customers fill out and sign credit applications, they know you are serious and plan to be around for a while. They feel like you have done them a "favor" by extending them credit, and so they will tell others about you.
- Because people can pay on credit, they normally buy more which increases your sales and bottom line.
- Customers will buy more if they can pay later.
- It shows you are smart about all aspects of your business, they will feel secure that you know what you are doing.
- You show them you are picky and not desperate, otherwise you would extend credit to anyone who walked in the door.
- It allows you to expand your customer base.
- Customers who are happy with your terms will tell other people about you resulting in more customers and more sales.
- It shows good customer service, #1 thing consumers are looking for.
- It shows you are interested in your customers and want to help them by offering sales, discounts, and credit so they can buy more now and pay later.
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