Tenato logo


Using Financing as a Marketing Tool

The price of your offering answers the question of “How much?” but the terms of the price answer the question of “When will I have to pay it?” This second aspect can be every bit as critical as the first.

Financing to Entice Purchases

Adjusting the payment terms of your pricing can be a brilliant way to entice purchases, if you are financially stable as a company and capable of doing so. In other words, if a customer cannot afford what you are offering, rather than discounting the price, you may be able to work out a longer payment schedule to enable the customer to pay for it. I’m sure you are thinking that this is nothing new, as we’re all familiar with financing houses, cars, and furniture, but the question is, can other businesses do it?

Definitely. Here are some examples:

  • A hot tub company that offers no money down and 2-year financing on major purchases. This can enable the store to earn as much, or more, than what the item would have cost at cash today, depending on the interest added into the equation.
  • A professional services firm that spreads its project fees over a year-long monthly plan, rather than getting all the money as the work is completed.
  • A sign company that allows a business to finance their new signs over a 36-month period instead of needing the whole amount upfront, when the sign is installed.
  • A contracting company that renovates homes, offering a financing plan to extend the value of the renovations over a 5 – 10 year period.

To make the best use of this technique, present the financing options at the same time you present the price. Why? Because the price alone may deter the customer before you even get the chance to present financing options… so seeing financing options at the same time as seeing the price can move the sale forward.

In other words, when you present the total price, also show a table of financing options with the monthly payment amounts over time. For example, few people can afford $50,000 at once, but at 5% annual interest, many average-income people can afford one of the following:

PRICE: $50,000, or financing available at 5% annually:

Payment LengthMonthly Payment

The point is, that rather than seeking to lower your price too quickly, it can be very valuable to offer financing options; this avoids eroding your profit margin, while still making the service affordable to the purchaser.


It is important to have a sufficiently binding contract that allows you to collect whatever you’re owed if the customer suddenly stops making payments. And, unless you have a very large firm with good lawyers, you’re likely better off using a third-party company to create your financing arrangements and accept the risk. This would allow your business to get all of the money up front, and the financing company to collect over time. There are many of these on the web; be sure to find a reputable one with the best financing rates possible (you don’t want your customers being threatened by collection thugs later on)!

If you’re financing on your own, remember that payment terms should also be looked at from the opposite light. That is, when does your business need the money? If you have a lot of upfront costs to purchase, you may want payment terms to cover your risk earlier rather than later. For example, if you’re an event planner, and need to book a venue with a cash deposit, you’ll want your customer’s money upfront, not later. Asking for terms with upfront deposits makes sense in this type of case; you can make these refundable or not, just ask your lawyer to create a sales contract that stipulates what those terms are.


It is very important to realize that payment terms can be just as important, if not more important, than the price itself. It’s not just “how much” (the amount) but also “when” (the payment terms) that will make a salient difference to whether or not the customer can afford the purchase, and turn many a “no” into a “yes”.

So before you worry about cutting your profit margins by reducing your price, be sure you’ve considered the financing side of the equation. Check out some of the top retail financing companies and see what may work for you.

Click to learn more about pricing strategy, or contact us today.

Share this:

About the Author - Jacqueline Drew
Jacqueline M. Drew, BComm, MBA is founder and CEO of Tenato Strategy Inc., a marketing research and strategy firm with bases in Calgary, Vancouver and Toronto. With over 25 years' experience in all facets of marketing strategy, she is a business consultant, trainer and speaker who loves to use her superpowers "to help the good guys win."