Payment Options For Your Business:Not So Plain Vanilla Anymore
The topic of different options could fill volumes of books, but for the purpose of this issue, I'll cover two topics: Payment options and pricing options. The key to determining which ones are right for your business, are through trial and error and by asking your customers. Maybe just like with ice cream, they just need a sample to figure out what they like.
Payment options consist of the payment mechanism and the timing of the payment. There are a variety of options include the most popular cash, check, credit card, and my personal favorite, debit cards. To get even more technical, there other mechanisms such as wire transfers, letters of credit, ACH (think direct deposit), etc. There are also different times that payment can be due: at time of service, prepay, or billing 15, 30, or 60 days later. There are also payment plans that let people pay over time. For some reason 5 easy payments of $19.99 sounds a lot better than $100.00.
One of the biggest trends in payment options is auto pay or auto debit. This is because the general speed of our society is increasing. With all that we do, we do not have time to stop and think, "did I remember to pay the light bill?" I know for me personally, I put everything on auto pay. Would your customers appreciate being on auto-pay to eliminate another stress in their lives? You could even make it into a special "club" that certain members join in order to be privileged to be on auto pay. For example, the owner of a car service, has the "VIP Club" whereby the customers accounts are automatically debited every month and customers in the "club" receive a free travel kit when they join or once a quarter they receive a free bottle of wine with their car ride. You have made the customer's life easier and made them feel special. Are they going to switch to another car service anytime soon? Probably not. What is the benefit for jumping on the autopay bandwagon?
- You don't have to worry about late collections.
- The most important benefit, is that you have a predictable stream of cash flow. You have 15 customers a month that are on $100/month autopay. That is a predictable $1,500 per month.
- You create customer "stickiness". How many people don't cancel their autopay gym memberships just because they don't want to be bothered with the hassle of having to go to the gym and cancel the autopay?
- Reduced labor costs to process billing. That is time you or your staff could spend on other important tasks.
Other payment options:
Are your customers in a hurry? Would they prefer to visit a website to prepay and then come in and pickup their product or service. Many restaurants are offering this service for the to-go customers.
Bundling. Do you have customers that visit often or purchase several products or services from you.? Would they like to receive only one bill? Many telecommunication companies are doing this, where you can get your telephone bill and cable bill all at once.
To determine the optimal payment options, just heed the advice given by sales expert, Kim Duke, the Sales Diva, "Know the pain of your customer". Do they hate remembering to pay the bill? Do they hate the line to make a payment and pickup? Do they hate receiving 3 different bills? Don't know the answer, ask your customers. Still not sure, then look at what is being done in your industry. Want even more ideas, think of payment options in your personal life that you enjoy and offer them to your customers. If you still don't have any ideas then, then just open your eyes and look around. After all, when I stopped and looked around, there was a clear sign. It said "Double Scoop $2.99."
Resources www.thesalesdiva.com, www.surveymonkyey.com for cheap and easy customer surveys
Copyright (c) 2008 Aisha Jones Scheffel