Find out why I offer payment plans for many of my products and services — and why you should consider doing the same.
Many business owners hesitate to offer payment plans because they’re scared their customers won’t complete their payments — I used to have this fear, too.
However, I’ve learned that successful sales require flexibility, and the truth is: I would not have built the business I have today without offering payment plans. Not only have payment plans helped me generate €3 million in the past two years, but they have also ensured I have cash coming in at all times.
In this article, I’m summing up why you should consider giving your customers the option to pay for your products and services in stages rather than all at once. You’ll find out why the pros of offering payment plans outweigh the cons and discover how systems can help you take the stress and overwhelm out of collecting payments.
Understand that not everyone wants to (or can) pay in full.
It’s simple: Some people will not be able to afford to pay in full, so in order to purchase from you, they will require a payment plan.
Other people are more comfortable with payment plans because that’s what they are used to, or they just prefer to pay in installments (and there’s nothing wrong with that). As a result, you will almost certainly lose out on sales if you do not offer payment plans.
Keep in mind we are not trying to get people who truly cannot afford our products and services to make the purchase; instead, payment plans are a way we can make our products and services more accessible to more people.
Payment plans can benefit you as a business owner — even if some people don't complete their payments.
While it’s true that some people may not follow through on their payment plans, you’ll still profit more from selling with payment plans than without them.
Over the years, I’ve realized that my sales increase significantly when I offer payment plans — without them, I’d lose about 60 percent of my revenue during a launch. Payment plans have also helped my clients increase their booked cash flow from 20-80 percent.
If you’re still not convinced, think of it this way: Some business owners refuse to use PayPal as a payment system because of the usage fees — but they lose customers like me who don’t want to go through the hassle of finding their purse or wallet when it’s time to pay. Instead of losing a little money, they lose the entire cost of the service or product.
The takeaway: While you may lose some money when you offer payment plans, you will definitely miss out on a lot of money if you don’t offer them.
Systems take the stress out of offering payment plans.
It’s much easier to keep track of who owes what and when payments are due when you have systems in place and aren’t trying to manage it all on your own.
I use Plug&Pay and Shopify, but there are many to choose from. If you’re feeling overwhelmed when it comes to getting your payment management systems up and running, download my FREE Online Business Systems Bible! I created this resource to help you easily and quickly determine which system is right for you and your business. Just click the link fastforwardamy.com/systems to get started!
Pro tip: Don’t wait to set up your systems the night before your launch. They should be installed and tested in advance to ensure they are authorized and ready for your customers — otherwise, you’ll lose out on sales.
The bottom line: Payment plans will help you increase sales and make more money.
There are far more pros to payment plans than cons, and I highly recommend that you consider offering them to your customers.
Although I continue to incentivize people to pay in full, I celebrate the role payment plans play in my business because they are instrumental in boosting my monthly recurring revenue.
Yes, it’s nice to have big sales days, but it’s also wonderful to know cash is flowing into my business on a regular, consistent basis — and payment plans help make that possible.
Additional payment plan notes, tips and advice:
- To combat concerns over missed payments, consider working with a collections agency to help recover funds.
- Avoid offering payment plans longer than 12 months or so, even for high-ticket programs or packages.
- Add an interest rate to your payment plans to recoup the additional customer service costs.
- Ensure people who opt for payment plans are legally obligated to complete their payments by a certain date.
- During times of uncertainty or economic downturn, expect more people to prefer to pay in installments.
PS: If you want to work with me but aren’t sure where to begin, head to fastforwardamy.com/findyourfit and answer the questions — we’ll point you in the right direction!