Should You Offer a Payment Plan? How to Price Your Offers

You've put together your offer, you've decided on the price, but what about payment plans? Should you do a two pay, a three pay, a six pay, a 12 pay? Like how does it even work, and how do you decide which of those is most appropriate for your offer? In today's episode, I am gonna be covering off everything to do with payment plans and how you can decide what is most appropriate for your offer, and what, more importantly, is going to help your customers make a buying decision

In my program, Grow Launch Sell, I am constantly having conversations about what is working and what isn't working. And through coaching and consulting for bigger launches, I am able to see firsthand what is happening in the space, which I then bring in episodes to you every other week in the podcast. I am honestly one of those people that geeks out about the thing that they do, so you can be assured that the stuff I am bringing you is not just things I'm making up in my head, it's what I am learning by doing and seeing launches 24/7.

However, I have some kind of rules of thumb for you to follow in order for you to work out whether you need a price plan. So just to make sure we are all on the same page, what I mean by a pricing plan is that you give them the ability to pay over several payments rather than just paying for the whole thing up front.

So that would-- That is what we'd call a full pay, that you are paying for the program full pay, or we give them the option to pay over several payments. And how do you know which of those payments you should do, and how do you know if your price is too much or too little, or should everything have a pricing plan?

We will get to whether you should charge more for a payment plan in a bit. But if it's a lower cost, it doesn't mean you shouldn't have one. I wouldn't give them any more than two or three monthly payment options, i.e., they can pay over two months or they can pay over three months. If the payment is, like, anywhere up to about £50 or $50, then I wouldn't give a payment plan.

I would probably just put it out as a full pay and they pay the one time only. The reason for having a payment plan is it helps people who may be be able to buy the thing. Now, is this like asking them to put it on a credit card? Which you know if you watched my video where I talk about the three launch tactics I will never use, one of them was about getting them to put it on a credit card, which is just heinous by the way, and that's not what a payment plan is Just because you are offering a payment plan doesn't mean they can't afford the full payment.

And like I said, one of the beauties of a payment plan, not only for the person buying, but for the person receiving, is that all important cashflow. And if you don't have your cashflow sorted in your business, that is basically gonna potentially screw you over. So knowing that I am going to get X amount of money through payment plans over the next few months is really reassuring to me.

So let's talk about what payment plans you should offer. So I've already alluded to the fact that if it's a lower cost, say under £200, I wouldn't let them go past two or three months. But one of my main rules I suggest that you really consider, and now it's not saying don't ever do it, but I'm just saying that for me, this is kind of a bit of a deal breaker.

I don't like to offer a payment plan past when the program finishes. So for instance, if it's a six-month program that someone is going to work with me, I wouldn't give them a payment plan past six months. Now, I know that some people do this, and obviously it works for them, but this is just something I don't like from both reasons.

The other reason for the other side is that actually the longer the payments go on, and especially after the program is finished, someone could default on that payment, and there's nothing you can do about it because they've already had the program. They've already had the six months, and if they stop paying at eight, at month eight- There's very little you can take off them.

If someone is paying for a program that is six months long and they're paying in six months, and they get to month four and they stop paying, then you can effectively remove them from that program for the last few months, meaning they don't get the whole six months 'cause they haven't paid for the whole six months.

Now, I had a look online, and I did a bit of research, and it's normally around 10% extra that they might charge for you to do a payment plan. The way I do it is I round it naturally up. So for me, what's more important, and whether this is based on fact or just my personal opinion, I'm not entirely sure, but I much prefer to have a nice-looking number.

And therefore, I would rather round it to the next nice-looking number than choose just to increase it for the sake of increasing it. If you were doing, like, a 12 pay for a 12-month program, there might be additional admin costs. There's a bigger risk that someone might not pay, and that's the reason why increasing the payment is something that people look at because they're kinda taking on those additional costs themselves.

My general rule is I don't like to do payments past the end of the program date. And when it comes to pricing those payments, I tend to round up to make the number look good, but I wouldn't go any more than 10% above the total amount extra on a payment plan. So let's talk about one final thing. Adding an extended payment plan before the cart closes in the last few days of the cart open.

Now, the reason for them doing this is that it will attract the buyer that maybe has been on the fence, and maybe they've been on the fence 'cause they're like, "Actually, that monthly payment is just a little bit too much than I want to pay per month." And by giving them a longer payment plan, they're attracting those last few people that are on the fence and, and aren't yet decided.

This is really beneficial because, one, you're opening up to people who maybe thought that it wasn't a possibility for them at this point, and two, it gives you another thing to promote, get excited about, talk about in your marketing before the cart closes. One thing I would say is the big programs that I've seen do this, their payment plan has often been spread out further past the end of the program date.

So one thing I would be double-checking if you were thinking about doing this is, are your terms up to date and correct, and do you have the means to chase those payments if they don't pay? And like I said, the benefit of this isn't to make the program cheaper. The program, in fact, will be more expensive when they spread it over the longer payment period.

It's just giving people a lower pay now type figure because they're getting to spread it over a longer period of time, and therefore attracting a different kind of buyer. One thing I wanted to add before I wrap this episode up is I have only ever had one person default on a payment, and I have obviously worked with hundreds of business owners.

It's about helping them smooth and manage their cash flow and you smooth and manage your cash flow. And when it comes to investing in ourselves and our businesses, sometimes those investments have to be paid over several months. Just because we can't pay it in full doesn't mean that we shouldn't be investing the money.

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