Written by: Amanda Rose, Executive Contributor
Executive Contributors at Brainz Magazine are handpicked and invited to contribute because of their knowledge and valuable insight within their area of expertise.
Payment plans… should you take the risk to get the sales?
People frequently ask me, "Amanda, you offer normal the longer payment plans, do you ever have issues arise from offering these extended plans?"
What I tell them is this, “It's very rare that we have any problems. At most 1% of people default. The majority of people honor their debts."
I strongly believe payment plans are an important thing to offer. Here are 9 reasons why:
1. FLEXIBILITY LEADS TO ACCESSIBILITY
While your niche will, of course, dictate the type of people your business attracts, invariably there will be some people who would love to buy from you but do not have the funds, or access to borrow the funds, to make that purchase. This doesn’t necessarily mean that these people are a risk, but rather, they need a way to be able to buy from you. As an entrepreneur, you’re a professional problem solver, and this is just another problem for you to solve.
My philosophy is this: most people do not purchase a $15,000-to-$75,000 vehicle outright. They typically finance it over 3-7 years. I apply the same ideology when it comes to my offers. Could you imagine if people could only own a house or car if they saved up enough to buy it in full? Most people would never be able to afford them in that case.
Payment plans allow people to get their hands on the products or services they desire now, with the flexibility to pay it off over time.
2. MITIGATE RISK
I've been an entrepreneur since 2013, and I've learned a lot since then about WHO I work with. They of course are people who take advantage of goodwill. You will need to implicitly trust anyone who you grant a payment plan to.
You must trust your gut when it comes to who you’re willing to extend a payment plan to. If something feels off, then don’t pursue it, or at the very least, be sure to do it through a financing firm (see reason 8).
3. OFFER PAYMENT PLANS OUT OF A PLACE OF POWER NOT SCARCITY
If you're desperate to try and close a sale and offering a payment plan just to get the "yes," you are coming from a place of scarcity, and it’s likely to backfire on you. When I was a newbie entrepreneur, I got stuck doing this and it cost me a lot of time, money, and frustration. Don't be afraid to get a "no" from the wrong person, your dream clients are out there.
When you offer a plan from a place of power, believing in the client, their ability to follow through, and that your offer is truly the right fit for them, you will have a fantastic outcome. Ultimately, happy customers desire to be repeat customers, and will not want to endanger their relationship with you by defaulting on payments. When a customer loves their purchase, they are happy to pay!
4. IT HELPS YOU TO NOT BE A HYPOCRITE
I often have to laugh because I frequently see people, who needed an extended payment plan themselves, that then aren't willing to offer their clients extended payment plans. If you needed a payment plan to say, “yes,” to your purchase, then chances are some people out there that are dying to work with you or buy from you, and they could use the same courtesy.
5. BUSTING THE MYTH
"People who pay in full are all-in VS those who take payment plans aren't."
Service-based entrepreneurs, particularly those in the coaching industry, tend to tout this myth around. I’ve worked with many clients who have paid in full upfront and many clients on a variety of different payment plans, and I can tell you whether they pay upfront or pay overtime has nothing to do with their commitment.
6. JUST BECAUSE YOU OFFER A PAYMENT PLAN DOESN’T MEAN EVERYONE WILL OPT FOR IT
A lot of business owners fear that by offering payment plans no one will ever pay in full upfront again.
This simply isn’t true. Many people still prefer to purchase your offer outright. You won't be negating large lump sums of cash from coming in by offering payment plans to those who need it.
7. OFTEN PAYMENT PLAN CLIENTELE WILL PAY OFF THEIR DEBT SOONER
I see this happen a quite often with my clients. They get the help they need and then pay off their debt faster. Most people like paying what they owe down as quickly as possible. Think about the last time you had a debt. It tends to be at the forefront of your mind and feels exceptionally good to pay off and be done with.
8. FINANCING
If you have a particularly high-ticket offer and you’d like to offer payment plans, but fear that you may have issues collecting payments, you can find a financing company to partner with. Just like car dealerships partner with financers, so can you. This way collection and defaults are dealt with by a professional company, and you don’t have to worry about a customer absconding.
9. KARMIC DEBT
For the rare few out there who take advantage of others, and may abuse your generosity and considerate nature, do not worry about potential loss. The Universe is all energy. You, me, and everyone else is energy. We're all Universal Consciousness and one source, despite the illusion of separation during our existence as human beings.
Money is an energetic exchange. If you deliver your service or product and the other person doesn't reciprocate by honoring their payments to you, they will owe in karmic debt, and you'll be owed a karmic debt. They will pay in some manner for what they've received, and you'll be compensated for the energy you put out.
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Amanda Rose, Executive Contributor Brainz Magazine
Amanda Rose is the founder & director of The Infinite Power of You Inc., a multi-published multi-genre author, business, wealth, & mindset coach, actor, motivational speaker, and online course creator. She is a multi-passionate entrepreneur who has been in the online space since 2013 and a sales expert for over 10 years. It's her passion to help her clients build lives of freedom and joy, and thriving businesses with multiple revenue sources, through strategies combined with mindset mastery. Amanda's mission to shift human consciousness to create soulful abundance through mindset practices.
