Trade Credit

How Digital Trade Credit drives additional revenue


In addition to the direct cost savings that a Digital Trade Credit solution generates, the other primary benefit of such a solution is that it brings merchants the opportunity to drive up revenues. Merchants that have implemented Digital Trade Credit solutions report that revenues increase on average by 40%.

Indeed, all else being equal, offering better payment terms is a good way for merchants to win more business than the competition. This is particularly true during economically turbulent times, when access to financing is normally constrained. Here we look at how Digital Trade Credit can help merchants to both win new clients, gain a bigger share of wallet from existing customers, and provide a better brand experience.

For a full overview of the additional revenue benefits you can expect from Digital Trade Credit, you can use our ROI calculator. Try it out now.

Winning more new clients

Digital Trade Credit helps merchants win new clients in two ways. Firstly, by strengthening the value proposition for new customers and secondly, by offering a more streamlined sales process.

A stronger value proposition for new customers

One of the biggest challenges faced by merchants is that they typically only offer payment terms to the largest customers. Satisfaction levels tend to be highest among these customers, which is reflected in more repeat orders and a higher average order volume and value. Meanwhile there is a long tail of customers (and prospects) who are denied access to payment terms and are not fulfilling their potential.

Digital Trade Credit enables merchants to offer instant decisions on payment terms to a larger pool of customers - even on a first purchase. Implementing the truly risk-based approach detailed earlier helps merchants target and win high potential client relationships and apply caution on high risk clients. Generally, it is possible to offer payment terms in 80% of cases with Digital Trade Credit, whereas with traditional approaches this is only the case for 10-20% of new customers.

A more streamlined sales process

Accelerating the sales cycle also provides a number of efficiencies. Time kills deals and, simply put, coming back to clients more quickly helps to win deals and improve the win rate. As explored in the previous chapter, Digital Trade Credit shortens or even removes the discussions between sales and finance teams to agree terms, discussions that can sometimes take weeks when the liquidity position of the company does not allow for extended terms. Digital Trade Credit provides instant decisioning and enables customers to transact from day one of the relationship. 

Merchants are also able to conduct more effective targeting of prospects (whether inbound or outbound) with Digital Trade Credit. Rather than take a blanket approach to all given buyers in a target segment, Digital Trade Credit solutions enable merchants to automate pre-checks of prospects, so that only those that are in good financial health are developed. This saves merchants considerable commercial time in targeting weak prospects, who may not still be in business in another year’s time! As for those pre-checked prospects that meet the merchant’s criteria – they are much more likely to become customers because of the availability of payment terms.

Increasing share of wallet

When it comes to existing clients, it is important to ensure that credit limits are reviewed regularly to avoid missing out on business opportunities. Offering better payment terms to high potential clients, in particular, helps merchants to drive loyalty and become the default supplier to customers. Indeed, buyers that use multiple suppliers tend to shift most of their business to those that have the best payment terms and buyer experience. Merchants that use Digital Trade Credit report that customers increase their purchase frequency by at least 20% and their average contract value (ACV) typically experiences an uplift of 25%.

Providing a better brand experience

Finally, it is also important to recognise that Digital Trade Credit provides a number of softer benefits in the form of providing a better brand experience for customers. These benefits are less easily quantified, but also play an important role in attracting new customers and improving the relationship with existing ones.

Helping to deliver a modern UX

Many B2B sites offer a dated UX in comparison to B2C sites, yet with the shift to digital since the pandemic there is a growing awareness that this has to improve. Increasingly, B2B transactions are completed without any human interaction taking place with the seller. As such, the pressure is on B2B merchants to provide a strong digital customer experience across the whole customer lifecycle; starting from when buyers start to research products to completing a transaction. Implementing a Digital Trade Credit solution can play a significant role achieving a better UX from making it easier to transact in the first instance to offering trade credit terms and their preferred payment options. Often Digital Trade Credit solutions can provide a tailored approach to integration and can readily integrate into existing checkouts so that the workflow is not disrupted and the return on investment is realised sooner.

Improving customer centricity

In line with providing a modern UX, customer centricity is also a key trend in B2B commerce. It is widely recognised that the customer centricity of B2B sellers lags behind that of B2C companies, yet as B2B International finds, improving customer experience from average to exceptional can lead to increases in key performance indicators such as likelihood to renew or buy another product. One of the best drivers of customer loyalty is to make it easy for customers to transact by removing any points of friction. Digital Trade Credit solutions are an ideal way to remove key barriers for the end customers, making it easier to trade in the first instance and providing a range of payment options.

Want to find more about how Digital Trade Credit could help your business drive more revenue? Download our white paper today.

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