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Understanding the value of financing consumer purchases to accelerate product adoption

Background

The product development organization of a Central US utility was in the process of developing product launch plans, including product sales forecasts. The organization retained MCR to help determine the potential impact of offering product financing, which would allow for no upfront costs to customers, as a way to speed product adoption.

Solution

MCR started the project by analyzing and presenting a series of case studies related to the impact of consumer purchases on product adoption. The case studies covered a wide range of products and industries, including retail, mobile phones, consumer electronics, as well as various utility offerings, including solar, water heaters, and energy efficiency. From the case studies, MCR and the project team developed a number of key learnings, which captured how, when and under what circumstances consumer financing can make a difference in product adoption rates. Working with the client, these key learnings were turned into specific alternatives for offering financing that addressed a number of key issues related to the source of the financing, the ability to offer financing under current regulatory rules, and the amount of financing to offer.

Results

The financing alternatives and recommendations were presented to senior management for consideration as part of a launch of the first product where financing was anticipated to have a positive effect on product adoption. The product is anticipated to be launched later this year.