Research Report:
You already know that giving your clients the flexibility to pay over time with financing can often encourage them to take on bigger projects. But did you know that the types of financing plans you offer and the length of the financing terms can have an impact on ticket size as well?
We looked at data on the average ticket size of Wells Fargo Home Projects® cardholders between August 2022 and July 2023 and found noticeable differences between customers who chose a 12 Months No Interest if Paid in Full plan versus those who chose 0% APR with Equal Payments Plans. And when we looked specifically at each plan type over a range of plan lengths, we saw a clear pattern in customer spending as the length of the plan increased. Let’s look at the numbers.
No Interest if Paid in Full plans versus 0% APR with Equal Payments plans:
When comparing average ticket sizes for No Interest if Paid in Full plans and 0% APR with Equal Payments plans, the difference was clear: Wells Fargo Home Projects® cardholders spent more when they financed their purchase with a 0% APR with Equal Payments plan compared to a 12-month No Interest if Paid in Full plan.1
Wells Fargo Home Projects® average ticket sizes, Aug. 2022 – Jul. 2023.
Impact of plan length with No Interest if Paid in Full plans:
To learn more about the specific impact of plan length on ticket size, we then looked more closely at Wells Fargo Home Projects® cardholders who used No Interest if Paid in Full plans with 6-, 12-, or 18-month terms. Among these customers, it was clear that increasing the length of the plan correlated with increased ticket size — in fact, the average ticket size increased by over $1,000 for each additional 6 months of financing.2
Wells Fargo Home Projects® average ticket sizes for No Interest if Paid in Full plans, Aug. 2022 – Jul. 2023.
Impact of term length with 0% APR with Equal Payments plans:
Finally, we compared the purchases of Wells Fargo Home Projects® cardholders who used 0% APR with Equal Payments plans with terms ranging from 24 to 72 months. Once again, we found that an increase in plan length correlated with an increase in ticket size. In this group, we found that average ticket size increased by over $800 for each additional 12 months of financing. The most dramatic increase was seen when comparing 60- and 72-month 0% APR with Equal Payments plans, as customers who used the 72-month plan spent an average of over $3,500 more compared to customers who used the 60-month plan.3
Wells Fargo Home Projects® average ticket sizes for 0% APR with Equal Payments plans, Aug. 2022 – Jul. 2023.
Conclusion:
Based on our research, Wells Fargo Home Projects® customers are likely to spend more on their home improvement projects when presented with financing options that let them take more time to pay. If you find that your customers often hesitate when faced with a big-ticket project, you may be able to close the sale by offering a longer-term financing option. To help empower your customers to take on bigger projects, we recommend giving them a choice of financing plans and term lengths to let them choose the one that’s right for them.
Want to know more? Talk to a Wells Fargo representative today!
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Wells Fargo Retail Services
1-800-577-5313
wellsfargo.com/homeprojects
- Comparison of Wells Fargo Home Projects® cardholder average ticket sizes between August 2022 – July 2023.
- Comparison of Wells Fargo Home Projects® cardholder average ticket sizes between August 2022 – July 2023 using 6-, 12-, and 18-month No Interest if Paid in Full plans.
- Comparison of Wells Fargo Home Projects® cardholder average ticket sizes between August 2022 – July 2023 using 24-, 36-, 48-, 60-, and 72-month 0% APR with Equal Payments plans.