Payment plans are a great way to help your clients spread the cost of their products. But before you go and implement this in your business here are 5 things to consider before offering payment plans to photography clients.
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Offering payment plans is a great move if you want to make bigger sales in your photography business. But make sure you consider these 5 things!
If you’re a photographer who’d like to be making regular four figure sales then implementing payment plans is definitely something to seriously consider. Whilst some of your clients won’t think twice about parting with £1500 in one go, there will be others who are nervous about doing that.
This does NOT mean they’re the wrong client. The wrong client is the client who doesn’t value what you do. A client can value what you do very highly indeed but when it comes to making the purchase they really want, they just don’t have the disposable cash to pay for it all at once.
I know I’ve taken advantage of payment plans before. Being able to break up those payments gives you that safety net just in case a last minute car repair or broken boiler crops up…you know?
As soon as I raised my prices and moved to in-person sales I introduced payment plans. And I can tell you that there were lots of great sales that would not have happened without them. Allowing our clients to pay in instalments meant they got exactly what they really wanted without having to worry about all that money coming out of their bank account at once and it meant we didn’t miss out on a sale that we knew our client wanted
Having said all of this, you have to be savvy with your payment plans. They can go so very wrong if you’re not careful. But if you follow these 5 pieces of advice you’ll be grand!
Only offer payment plans for larger sales
The whole point of offering payment plans is to allow clients who want to spend more – to spend more. Don’t forget that. Allowing clients to spread the cost of even a very small purchase is going to attract clients who might not be the best fit for your business.
There is admin involved in offering payment plans. It is more of a PITA than being paid in full on the day. If you allow anyone to enter a payment plan with you regardless of what they’re spending then you’re increasing your workload and causing yourself all sort of cash flow problems.
Let’s face it, if someone needs to break up a £200 purchase into 3 payments then what are the chances that they might not make one or more of those payments? Probably quite high.
We only offer payment plans to clients spending more than £800 with us. That’s around $1200. Any less than that and payment has to be made in full.
So decide, based on your pricing and packages what the minimum amount is that you’ll allow clients to split over three payments. Which leads me to number 2 which is…
Don’t allow your payment plans to span more than 3 months
Allowing your clients to spread their payments over 6 – 12 months causes all the same problems that I mentioned in number one. It attracts ‘bad fit’ clients and creates cash flow issues. 3 months makes much more sense if you still want great clients who value what you do. 4 months at a push.
But there’s something else. Let’s say you take some beautiful photographs of a couple and their newborn. They decide to purchase a gallery wall display from you and opt to spread their payments over 12 months. By the time they get those photographs they are so far removed from that time in their lives. Not only that the baby looks like a completely different person.
The longer the payment plan the more likely you might have to deal with a client changing their mind and cancelling payments to you.
And on that subject…
Make sure the client signs a payment plan contract
This not only protects both parties, it ensures that both you and the client are on the same page. You both know what’s expected and how to honour your part in the process.
Not only does the contract help you to make sure you get the total sum owed to you, it also gives the client peace of mind that they’re dealing with a professional business and that they will get the products promised to them.
This doesn’t have to be anything complicated. Something simple is best because your client is way more likely to read it and understand it if that’s the case.
You want to make it very clear in that contract what the full amount to be paid is, how much has been paid and the date and amount of all future payments. If you want to make this incredibly easy then check out agree.com. They’ve done all the hard work for you.
Automate the payment process
Don’t go giving yourself and your clients an added headache by collecting payments manually. You having to send out invoices each month is not good use of your time and your client does not need yet another thing added to their ‘to do’ list.
Make it easier for you both by setting up a way of collecting these recurring payments automatically each month.
You might be able to do this using your business management software or you can look into a service like GoCardless or PayKit. Alternatively, if you arrange all your contracts with agree.com you’ll find that they also take care of those payment plan transactions for you.
Don’t order any products until payment is complete
Please don’t get caught short here. Even with the best contract in the world, stuff just happens sometimes. There are all sorts of reasons why a client might pull out of a payment plan with you. What if your client becomes unemployed or seriously ill or there’s a death in the family?
Even though it might say so in your contract, do you really want to insist they complete those payments or take them to small claims court?
Believe me, if you attract good clients, provide a great customer experience, have an honest approach to business and a robust contract then it will be very rare to have a client pull out of a payment plan with you. But if it happens you don’t want to feel the bitterness of knowing that you paid for a wall gallery that’s hanging in their home out of your own pocket.
Save yourself that nightmare and don’t order products until the payment plan is complete.
If you follow these five tips they you should have a great experience with payment plans.
Your clients will be able to buy exactly what they want and your sales will go up. Win win.
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If you think we’d be a good fit for each other check the membership out and apply to join us.