To Sum It Up

When you’re launching your online course or program, it can be hard to decide if you should offer a payment plan or not.

While there are several factors I invite my stress-free launch clients to consider, I’ve broken it down to the top three pros, and the two biggest cons, so that you can decide if payment plans are right for you.

PROS

There’s three big pros that instantly come to mind about offering payment plans:

1. It is where the market’s mindset is.

Based on the popularity of membership services, both for services like Netflix as well as in the infoproduct world, payment plans are what the market is used to. So it makes your potential customers more comfortable paying you a smaller amount each month.

2. You’ll get more sales. (And not just on the payment plan.)

Naturally, offering a smaller payment plan makes it easier for some members of your audience to afford the program. But, you might be surprised to know that it can also help increase sales for the pay in full option! Especially when small penalties are added, where the full cost would be $997, and they’d pay an extra $300-$500 on the payment plan.

3. It gives you another opportunity to incentive buyers.

While payment plans already help you get more sales just being an option (as I outlined above), they also allow you to incetivzie your audience to take even more action. For example, you can have offering a disappearing payment plan offer during the cart opening, such as offering a 12 pay and reducing it to a 10 pay halfway through, to incentive more action during the promotion period.

CONS

1. You might have a few admin headaches on the way.

No matter how honest, good and well-meaning your ideal customers are, some of their credit cards will decline at some point. And you’ll have to chase them down contact them to get it resolved. If you don’t have a team or system in place to ensure that follow up happens, you may not want to take on the administration duties of offering a payment plan.

2. Expect more people to change their mind.

Because you are allowing people to “dip their toe in” and test the waters with a payment plan and refund policy, you’ll naturally see an increase in refund request when offering a payment plan. Whether they tried out your course and it wasn’t a fit, to them being too busy to even get a chance to log in, you do run the risk of having a higher refund rate when you offer a payment plan.

But adding in a stellar onboarding process could help keep this con at bay!

Your Turn

So, which did you decide? Let me know in the comments below if you’ll be adding a payment plan (or not!) to your next launch.

Full Transcript

If you’ve ever wondered if you should offer a payment plan for your course or online program or not, today’s video is going to be for you. I’m Jessica Castle, your stress-free launch strategist and today I want to go over some pros and cons of payment plans with you so you can make a decision that’s right for your next launch.

I think payment plans might be one of the biggest questions that I get from stress-free launch clients when we are talking about how much their program should cost.

I have some definite pros and definite cons that I want to share with you, so that you can make a decision that you feel is right for you. There’s some really big pros and I definitely recommend payment plans to almost all of my clients. There’s also a lot of cons and so if you are a solopreneur or a one-woman show, payment plans might not be something you want to have right now in your future.

Let’s dive into the pros…

There’s three big pros right off the bat. One is that it’s what the market is used to, especially with the rise of membership sites and services like Netflix, where you pay a small monthly fee. People are used to paying small amounts over time to get stuff that they want. It’s just where the market is and so payment plans are very much in line with that. That’s why you see a lot of entrepreneurs doing 12 payments of $95 or 12 payments of 195 or 10 payments of 100. It’s just kind of where the marketplace is at and what people are used to seeing. They aren’t used to paying $1,000 upfront for Netflix. It kind of is built into the psychology of market currently that more people are prone to definitely taking payment plans.

Which leads to pro number two, is that you actually will get way more sales with a payment plan than if you don’t offer it. That doesn’t mean that you get more payment plans. It actually is a really good positioning technique. Let’s say your course is 997 paid in full or ends up being 1,200 to 1,500 with the payment plan because there’s those little penalties built in, you might actually see a higher increase in sales of the full pay because people want to save the money. But it’s really good for getting more sales, one, because people do like the payment plan, but also as that positioning tactic.

Then, three, is that it does offer an incentive plan. I’ve talked before about how you get people to buy from you and how you have to kind of incentivize them joining and so I think having a disappearing payment plan or having different payment plan terms throughout your launch can be a really good motivator for getting those sales without having to wait until the last minute. Maybe you start with a 12 payment plan. If your program is a lifetime program, start with 12 months and then down to 10, and then down to six, and you keep having kind of a disappearing payment plan. That will definitely get more people to take action. Or, again, like the don’t ever exceed the payment plan terms of your program, but again, if your program is lifetime access, a 12 month or a 10 month payment plan is totally standard and it will definitely help you get a lot more sales.

There are two cons, though, to getting a lot more sales and to just using a payment plan in general.

One is that it is going to be an administrative headache. There are going to be cards that people lose, that get hacked online, that they change banks, that they move, that they’re out of the country, and so it defaults when you try to charge it. This is just a reality. Like I was saying at the beginning of this video, if you are a solopreneur, if you don’t have a team that can follow up, or you don’t have a system that can automated to follow up, it could be a real nightmare to manage payment plans as well as also take away the access when those payment plans fail.

The other big con to a payment plan is that you will have higher refund rates in general. There’s definitely some things that you can do to prevent that and a good onboarding process is one. But, in general, you do have a higher refund rate when people are “dipping their toe in” and you have a solid refund policy, that people will come in for $95, decide it’s not really for them or they get too busy that month and don’t have time to even check out your program, you do kind of run the risk of having a higher refund policy when you have a payment plan.

Now it’s up to you to decide if the pros outweigh the cons and if payment plans are something you’d like to use on your next launch. You will get higher sales, you will get better traction, and you can incentivize people to come join your program but you will have to follow up as cards will decline and you will have a higher refund rate unless you make a stellar onboarding process.

That’s my stress-free launch tip for this week. I will see you next time.