Laybys – thing of the past or the way to more sales?

Certainly, the take-up of laybys from customers has taken a dive in retail over the past decade or so – mostly due to interest-free loans and an insurgence of credit. But for small business, offering a layby service could just be the answer for getting customers across the line and standing out in a noisy and competitive market.

We all know and understand that customers are the lifeblood of any business, and loyal customers are the key to business success and growth – so if you aren’t offering a layby service (or perhaps you are but it’s a little-known secret and not marketed successfully) you could be missing opportunities to make a new customer and build loyalty.

So, when it comes to layby here’s some points to consider: –

1. Make sure your layby terms and conditions are concurrent with our ACCC laws. If you are implementing a layby service in your business here’s the link https://www.accc.gov.au/business/treating-customers-fairly/rules-for-lay-by-agreements
Or if you already offer the service – take some time to check your terms and conditions are compliant. Make any necessary changes.
2. Once you have your terms and conditions correct according to law and according to your store policies – ensure they are accessible to any customer. Ensure they are explained at the point of the layby transaction but also that they are readily available on your website and social media (if appropriate)

3. Confirm your policy has: –

(a) A minimum amount set – the minimum they need to purchase to create a layby – this can work as a great upsell strategy
(b) A clear payment schedule – e.g./ fortnightly payments or weekly payments
(c) A date of when the layby falls due
(d) Whether there is a non-refundable service fee added to the amount
(e) Any cancellation fees – taking into consideration the costs associated with creating, monitoring and following up the layby

4. You need to ensure ALL your staff are familiar with the policies and procedures of laybys and the follow up sequence is easy for anyone to implement.

5. The policy and procedure you set MUST be adhered to. Follow up customers who are in default either in payments or time – if you go the trouble of creating this process- your customers need to know it’s going to be implemented. Follow ups can be done in a variety of ways, but possibly text messages are the best to ensure your customer actually consumes the message – phone calls can be ignored and emails can get lost – but we all pretty much have our phones on us 24/7!

6. Laybys need a designated place in your store (storeroom) also. This section requires a system and procedure just like any other part of your store (and it needs to be easy!).
If you offer a layby service, and it’s a profitable service for your business, that is, it helps to create more customers, more often and increase their average spend, then DON’T KEEP IT A SECRET! Market the service to your customers – do your customers know you offer this service? Do they know the benefits to them? What problems can it solve for them? Make the service part of every piece of “sell” marketing you do – if they don’t know about it – they won’t use it! If I am on your social media or website can I see that you offer this service? If not, why not?

If you love retail like me, follow along and we can learn together. Sign up at www.inspiringretail.com.au or follow along on social media @inspiringretail – I’d love to hear your comments, thoughts and ideas – building a small business in retail is tough by yourself which is why Inspiring Retail exists – to connect, educate and inspire.