Privacy Concerns May Keep Consumers From Applying for Credit Programs

Peter Roesler, President - Web Marketing Pros

By Peter Roesler

President, Web Marketing Pros

privacy-conceptFor many large brands, online retailers and small business owners alike, getting consumers to apply for in-store credit is a goal for increasing sales and profitability. However, there are a lot of challenges to getting consumers to take that first step. A recent study suggests that an important factor in all of this are privacy concerns.

A recent survey by Vyze found that about nine in 10 consumers have been asked to fill out a credit application at the checkout, but only about 60 percent do so. There are a variety of reasons why this would be the case, such as the time it takes to fill out applications. However the Vyze study showed that for many consumers, they have serious concerns about their privacy.

According to the story, of the 40 percent of people who do not fill applications, a fourth (26 percent) say they worry about the security of their information when giving it to a store clerk. This isn’t just an issue for in-store applications and clerks. Of those who fill out the applications later online, 24 percent of those in the survey, 41 percent say they have data security concerns.

Privacy concerns have been a growing concerns for consumers and this concerns manifest itself in many different consumer behaviors. This data suggests that in-store credit offers are particularly vulnerable to this issue. It’s something businesses should consider when crafting their marketing strategy for these programs.

“Retailers have invested tremendous energy and resources into extending credit offers to shopper, but there is a significant gap when it comes to consumer response,” said Keith Nealon, CEO of Vyze. “This survey shows that there is great opportunity to stand out and differentiate based on providing multiple financing choices, clear security messaging and the experience itself – in both the store and online channels.”

Before this information starts to look too negative, there was a lot of data that shows the benefits of having these kinds of offers for customers. According to the survey respondents, 8 in 10 shoppers ‘would consider’ using credit to make purchases. So getting people to sign up would be beneficials.

There’s also evidence in the report that shows it people are willing to take on credit cards that go beyond the major credit cards. Of the survey respondents, four out of 10 wanted additional credit options. Of those who wanted additional options, some of the most popular requests included store cards (57 percent), non-store cards (27 percent), and layaway programs (22 percent).

One way business owners can compensate for the privacy issues is offer customers deals and cards they want so much, they’re willing to take the perceived risk. The Vyze study offers some data that can be useful in that regard.

According to the report, rewards/incentives are the most important (59 percent) factors in determining if someone will apply for a card, followed by having a simple application process (51 percent), and a fast credit approval process (40 percent).

The Vyse study shows that there are privacy concerns that may keep people from applying for in-store credit, but the benefits of getting people to sign up makes it worth the effort.

For more recent research that can improve your marketing, read this article on mobile devices and redemption rates.

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