Sounds crazy, right? Double your conversion rates with just two more words in your copy: “You’re pre-approved.”

Well, it seems to be working for American Express, Delta Airlines, Costco, and hundreds of other name brands. Why can’t it work for you? Let’s start with your dilemma…

The B2B Marketing Dilemma

In an effort to drive more traffic to your site and juice your numbers, you decide to get aggressive and attempt some paid advertising. 

You’ve done all your keyword research, written your ads and tested effective online ad copy, and built well-designed web site landing pages. But after dropping some serious money on ramping up your site traffic, you’re left with a bunch of cold leads…and not much more than a blip in sales. 

So, like the good marketer you are, you attempt to drive new sales off your existing list because that’s just good business-to-business marketing. You try every tweak that you can think of. You experiment with new offers, new ad copy, and lower prices. Nothing seems to work.  Frustrated (and having blown your ad budget for the year), you just give up on trying to monetize your list and go back to the drawing board.

How the Credit Card Industry Gets Better Rates Than You

You know those pre-approved credit card offers (You’re pre-approved for a $5,000 credit line — act now!) that flood your inbox? 

There’s a reason that you get so many of those: They work. 

It’s simple…these offers convert. 

In my time at American Express, my team analyzed hundreds of direct marketing campaigns and I have seen that pre-approvals can increase conversion rates as high as 100% to  200% in direct A/B testing.

Why Pre-approval Offers Work So Well

• It’s like winning the lottery: For someone that is short on cash, receiving a financing offer feels like winning the lottery. When your offer comes linked to pre-approved financing, you just earned a new best friend (and you can sell anything to a new best friend).

• Pre-approvals lower stress around a transaction: There’s an interesting psychology at play when a customer applies for financing. He or she is afraid of getting rejected. At the financing dance, we all crowd the pre-approval punchbowl.  Bank of Montreal released a report in April 2014 that 94% of Canadians said pre-approval offers lowered their stress.

• Lack of financing is a key reason prospects aren’t buying: Something to consider.  Perhaps the reason customers aren’t buying your product is because they’re strapped for cash. Financing (or lack thereof) was the block. Remove the block and you can get prospects to buy.

But I’m the Marketing Guy?!

Financing not your problem, right?  Wrong! 

You can create the most convincing marketing offer in the world, but if the customer can’t pay, your offer will fall on deaf ears. In the B2B world, where terms flexibility often drives the purchasing decision, financing really matters. Net 30 versus Net 60 or a $10,000 line versus $15,000 line can be the difference between success and failure. 

But don’t freak out and don’t tackle your CFO. Here are two simple suggestions:

1. State the Obvious – Your customers may already be eligible for credit terms with your firm and simply need a reminder. Add a box on each marketing communication reminding the customer of their available terms with you (i.e., up to $5,000 and Net 30).  Include this messaging on every communication. Make it available in the customer’s online account management dashboard.

2. Get Some Help – If you’re not already offering terms for your customers, or your terms are too restrictive, it’s time to make a change. Depending on your size, there are numerous companies that can help you create pre-approved credit term offers for your customers. Try to find a partner that will enable you to transform financing into a competitive weapon.

Seeing First Hand Results of Pre-Approvals in B2B marketing

Pre-approvals and marketing work together to lift conversions.

A mobile phone wholesaler, for example, saw a lift of 30% in monthly revenue by hitting its dormant list of prospects with pre-approved offers. It was overwhelmed with the initial response and needed to increase sales support.

Pre-approval offers — if you can make them — work exceedingly well in a variety of B2B industries that share some common characteristics: high margins with quick turnover in inventory. 

E-mail campaigns with pre-approval offers for financing could work well in such industries as electronics, beauty supplies, construction, wholesale closeouts, drop-shipping and new business services (such as marketing and digital advertising). Vendors in the construction industry, for instance, get higher conversion rates with pre-approved offers because contractors in that industry shop for favorable terms once they land a new project. Getting financing means a construction team can afford to take on more jobs.

Reporting Better Marketing Results

As a marketer, you’re paid to bring in new business. Your work doesn’t end after e-mailing offers that don’t convert. If it’s right for your business, test using a pre-approved financing offer to a subset of your list.

I’d even be willing to bet (a pre-approved amount of money) it will beat your standard offer.

Russell Weiss is the vice president of Credit Risk Management at Behalf, a financial services company based in New York that is backed by Sequoia Capital and Spark Capital.

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