A bit about today’s episode
Do you find most of the expenses in your business are going towards marketing and selling your products and services?
In this episode of The Fearless Business Podcast, host Robin Waite offers his expertise in reducing friction when it comes to selling your services.
What we will be discussing today
- Payment Plans
- Reducing Friction in Sales
Listen to the Full Episode
Payment Plans and Reducing Friction In Sales
In this episode of The Fearless Business Podcast, host Robin Waite offers his expertise in reducing friction when selling your services.
It’s almost commonplace for Robin’s clients to turn around and deem his services “too expensive” when he closes sales calls. But, being a business coach, he’s found it’s an issue that both he and his clients know all too well when selling their services. Having rectified this himself, Robin provides insight into how you can reduce friction whilst selling your services and how to keep customers subscribed for longer.
Of course, having a client pay cash in hand is every business owners dream scenario. It allows you to plan ahead whilst making a decent profit almost immediately. However, if this is your only payment option, you may find yourself in hot water. This is why Robin recommends payment plans.
In Fearless Business, Robin has found that about 25% of his clients pay the total cost upfront whilst the rest pay in instalments. For instalment plans to be successful, businesses must not split the cost of their services into equal monthly payments. According to Robin, if a business owner chooses to divide their costs into equal amounts, the client then views the services they provide as a subscription. This increases the chances of customers dropping out of the programme early as they could feel they have gained all the value already and don’t need to pay further.
This “subscription” thinking then causes a cash flow problem within your business. When working under similar pricing models previously, Robin would recognise that the number of clients he had served that year did not reflect the profit he earned.
Offering Balloon Payments
Because of this, Robin highly recommends what he calls balloon payments. A balloon payment is where the customer invests a more significant amount of money in the first instalment than the ones to follow. Similar to that of a deposit.
Through using a balloon payment plan, Robin was not only able to fix his cash flow problem he was also able to attract a better quality client. Typically, the clients that pay more money upfront tend to view the services he provides as an investment, not a subscription. As a result, paying more upfront attracts a more committed client that’s highly likely to complete the full programme.
Another way to reduce friction is to implement the AIM acronym within your services:
A - Assessment: Finding out whether or not your client is a good fit for your business.
I - Implementation: Where you and your client start to work together.
M - Maintenance: Ensuring there is a mechanism to stop them from falling back into bad habits once the service is complete.
Robin believes the AIM model is the best way of creating frictionless sales within your business. This is mainly down to the maintenance element of the model, which entrepreneurs can overlook.
As mentioned in balloon payments, he found that the clients who left his programme early eventually came back because they had learned how to get good results but not how to maintain them. Therefore, by providing the AIM model’s maintenance element to clients, entrepreneurs can increase their overall client satisfaction by delivering results and techniques that last.
Turnover is Vanity; Profit is Sanity. Cash is King!
Through implementing all these techniques, Robin found a considerable increase in cash flow, with the balloon payments providing a decent amount of profit upfront.
This altogether amplified the results of his service as he now had more money to invest in the quality of his services overall, which enhanced customer satisfaction. In addition, clients felt as if they were getting great value for money which led to more recommendations, referrals and people investing back into his business.
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