5 Ways to Grow Your Business Using Payment Plans
Offer Your Clients Extended Credit Terms and More Time to Pay
Sales and marketing will always be critical for growth. But did you know that offering a structured payment plan option to your clients is one of the best – and easiest – ways to quickly grow your business?
It might sound counterintuitive, but not when you see it from the customer’s side: Extended payment terms make large purchases feel less intimidating. With the right payment plan options, you’ll convert more prospects without investing a single additional dollar in advertising.
Here are 5 ways to use payment plans when you want to scale your business (and get more clients in the door.)
1. Improve cash flow on both sides.
The first and most obvious reason you should offer payment plans is that they free up cash flow. Payment plans allow clients to reserve cash for other critical expenses, making them more likely to choose your business. Meanwhile, you get paid upfront and in full.
At QuickFee, we performed a survey of over 4,000 professional services clients worldwide to find out why they chose payment plans. The results were decisive: 70% of all clients chose payment plans based on cash flow reasons.
2. Sell more services.
Want to earn more business with your existing clients? In the eCommerce world, payment plans – especially “buy now, pay later” style installment plans – consistently increase average order value, often by as much as 70 or 80%.
Regardless of the industry, payment plans give customers greater financial freedom. This means that they will be more likely to get the full range of services that they need right now.
3. Strengthen your client relationships.
When longstanding clients have overdue accounts, you might be hesitant to call in a collection agency. This is another area where payment plans can help.
By offering a payment plan early in the billing cycle, you can circumvent collections issues and show that you’re committed to preserving the relationship. When you present a payment plan option to an overdue client, it also increases the odds that you’ll be paid back!
4. Offer opportunities for re-engagement.
In a 2002 article for the Harvard Business Review, researchers John T. Gourville and Dilip Soman analyzed health club memberships to understand how pricing policies influence demand. They found that members who used a monthly payment plan also used the gym much more consistently than quarterly or annual members, leading to higher membership renewal rates.
That’s because consumption follows the timing of payments, and this basic psychological principle works outside of the membership model too. Clients will be more likely to re-engage (and repurchase) when faced with ongoing reminders of your value.
5. Make it easy for your clients.
In the professional services industry, it hasn’t always been easy to find cost-effective financing and extended credit for clients. Some professionals also have to consider special rules, such as IOLTA and ABA Formal Opinion 484 in the legal world.
Fortunately, not all payment plans are created equal. QuickFee offers online fee financing plans for law firms that are fully compliant with all PCI, IOLTA and ABA rules. We also recently introduced QuickFee Installments, an innovative “advice now, pay later” plan that allows clients of professional service firms to pay their fees in 4 interest-free installments.
Interested in offering a payment plan to your clients? Contact us today at 844-968-4387 to learn how QuickFee can help!