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How Buy Now, Pay Later (BNPL) Enhances the Customer Experience

MarTech Series

By: Bill Walsh, Chief Customer Officer, Sunbit

Everything has changed.

COVID forced us to re-think consumer experiences, resulting in a large, likely permanent shift in customer expectations.

How many of us, during the height of the pandemic, called customer service when we were concerned about making bill or mortgage payments — and then were pleasantly surprised to find that we were treated by companies with flexibility and compassion? While we basked in gratitude, did we ever stop to think: why should being treated with humanity be the exception? COVID taught us that companies can help people get what they need, when and how they need it, in an empathetic way — and overall, we’re better off.

That has important implications not just for us as consumers but for the brands that want our business. The way I see it, brands have a choice to make: tap into and respond to the consumer sentiments that bubbled up during the pandemic, or revert to meeting pre-COVID expectations, and risk being quickly left behind by a public that isn’t willing to backtrack.

My goal with this article is to help you understand key dimensions of customer experience and expectations that changed, so that you can meet the full set of new, possibly unfamiliar expectations better, for customers’ benefit and your own.

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How the Consumer Experience Changed

Let’s break down the “everything” in the idea that everything changed during the pandemic.

Of course, one of the biggest changes has been the shift to remote. Many of us now work remotely, a trend that will likely continue permanently in some form. We communicate more through video chat and live streaming, for both work and social interactions. Rather than going places to get things, we became increasingly dependent on delivery—of groceries, takeout, toiletries, mattresses, pretty much everything.

Closely related to those changes has been a shift in how we pay for things. Again, the big theme is flexibility. For payments, that’s true for retailers and consumers alike. Sellers now offer more flexible ways to pay, with smart POS systems, QR codes, and platforms supporting multiple payment providers. Similarly, customers have more ways to make payments, with increasing use of mobile wallets and apps like Venmo, Zelle, and CashApp (and even actual cash, occasionally!). Buy Now Pay Later (BNPL) options also grew in popularity. The net result has been greater flexibility and seamlessness in how consumers buy.

Third, and critically, our finances changed. The government and even private creditors offered much-needed forbearance for and suspension of payments on student loans, mortgages, rent, and others. Multiple stimulus payments arrived—directly into bank accounts, for millions. This convergence meant that people were able to save more, consolidate and pay off debt, and invest more, as suggested by the growing popularity of Chime, SoFi, Robinhood, Coinbase, and others in the consumer financial technology space. Meanwhile, we continued to take responsibility for our finances, as suggested by low delinquency rates for consumer loans. We borrowed less overall (consumer loan originations declined during COVID but are picking up as confidence in the reopening grows, and FICO is tightening up its scoring algorithm).

How Customer Expectations Changed

Not surprisingly, customer expectations changed as a result of all the changes described above.

Specifically, we’ve come to expect:

  • Options: We expect more options than in the past, more flexibility. This is true whether we’re learning about a product or service, ordering it, having it delivered, or paying for it.
  • Contactless everything: We want to be able to get what we need without direct contact with other people, whether in-person or by phone.
  • Automation and simplicity: Similarly, we expect to get what we want fast: on-demand, immediate, now. And it shouldn’t be complicated, from the consumer perspective.
  • No gotchas: Along with new choices and options, we don’t want any unpleasant surprises. That means more transparency about terms of purchase, such as no nickel-and-diming on product features and definitely no hidden fees on financial products like credit or loans.
  • Being treated like a human: Above all we want to be treated with dignity and respect as people. COVID taught us more than anything that we long for connection. We’re no longer interested in rigid, scripted conversations with their service providers; we want to work with companies that treat us with humanity and empathy.

The pandemic shaped and accelerated these key dimensions of customer expectations. Now leaders of brands have to think about how best to meet them.

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Meeting New World Expectations

What do all these shifting expectations mean for your brand?

You have a choice to make: work to meet the new set of flexible, attentive, and fair customer expectations, or risk being left behind.

The right answer should be obvious. But I’m concerned too many brands will try to go back to business as usual—because it’s less expensive or effortful.

Instead, think about why consumer expectations shifted during COVID. Yes, it’s about enjoying more options and flexibility even post-COVID, but one of the biggest drivers has to do with the last bullet point above: during the pandemic consumers were treated more like humans as opposed to faceless buyers or, worse, dollar signs. It turned out retailers and banks and other businesses could treat their customers with respect and even make things easier for them in some cases, but had to be motivated by a once-in-a-century global health crisis to make that happen at scale.

A pandemic shouldn’t be the only driver of change. Consumers saw they could be treated better and wanted more of the same. It’s on us to make that happen. At Sunbit for example, we continue to work with our customers on flexible BNPL terms that meet their needs. Many of them tell us how much they’d struggled to get more traditional loans, and how such experiences have eroded their trust in legacy institutions.

The goal, then, should be to maintain and even grow that trust, by offering a flexible, more humanizing customer experience. Because while it seems everything has changed, one thing hasn’t: consumers expect to have their needs met and to be treated with respect. I firmly believe the brands that deliver on that will enjoy the highest levels of performance in today’s climate.

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