How to Offer Multiple Payments and Assure Getting Paid in Full

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Many times over the past few years I have watched sales webinars for various products and services in a wide range of price points. When watching ones with price points from $997 to $1997 or even more, the seller has offered a one-time full price payment and a 3 or 4 month payment option at a slightly higher price point.

I can understand how a seller can be assured payment when offering a SAAS product. When offering a delivered product, how do these sellers guarantee that the remaining payments will be made? Anyone can cancel a recurring payment on PayPal at anytime and the same goes for prescheduled credit card payments.

Any idea where I can find some good information on this subject?

Thanks in advance.
#assure #full #multiple #offer #paid #payments
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  • Profile picture of the author Jason Kanigan
    Well I have some years of testing, 2012 - 2015 on this topic with my own product. Right out of the gate let me say that for clients I never recommend multiple billings: either the prospect has the money or they don't qualify.

    Let's begin by dividing the marketplace into two types of buyers: those who are broke and those who have money. These two groups behave differently. Those who have money will probably not cause any issues as long as the thing they are buying does what it said it would do.

    Those who are broke...in my experience, a one-time investment has gotten far better conversions than a two-step billing process. That second billing is exactly like having to make the sale all over again.

    And the funny thing is that the one-time price can be far higher than the two-step billing, and they'll be happy to pay it once and be done with it.

    When I ran two-step billings for my offer, I had content to unlock when they paid the second amount. I tested a week later and a month later and the results were virtually identical: about half didn't make the second payment.

    Now this was in the WSO marketplace so you have to account for a certain type of behavior in there...but I imagine similar thought processes occur out in the wide world, too. The WSO buyer is freaked out and has an urgent need for a magic bullet. Therefore they buy at a frantic pace. Their random attempts at finding a solution to their critical problem is driven by this urgency. This makes them run out of their limited cash very quickly.

    So, despite how good the product may be, if they aren't using it and they have no cash left, they won't make the second payment.

    In contrast, the WSO buyer who knows the fee is set, is assured by the sales copy that there will be no upsells, and is entertained (note I said entertained, not helped) by the content will be happy...even at a much higher price point. They simply do not have to worry about further payments, and neither does the seller.

    In our high ticket closing business, my partner and I do occasionally allow split payments of our onboarding fee. However, these buyers have money, have investment, know what they're getting, and it's all more about skin in the game rather than an exchange of cash in desperate search for a magic bullet solution for a vaguely defined problem. And our service is pretty SaaS-like: we can shut it off if we're not paid to do it.

    Outside the WSO marketplace my advice is to price your offer high enough that it automatically qualifies out the broke people.

    In closing, I'll share an idea that has helped me avoid being annoyed when I've ran two-payment offers that missed the second payment half the time: I set the price so that I was happy with the revenue from the first payment. If I never heard from the buyer again, if they didn't come back to fulfill their commitment on the second part, then I was content with my margin on the first sale. So make sure your cost of customer acquisition is covered by that first payment with some profit and you'll be happy.
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  • Profile picture of the author OptedIn
    Damn, Jason. Besides being incredibly generous with your time, there isn't a word of what you posted that doesn't make perfect sense. lol I'm helping a friend with this and I will advise him to run his campaign exactly as you have outlined.

    Here's a question. My own experience with these webinars has left me livid when I would sit through something that I found interesting, that I thought should be priced at let's say, $297 - only to get to the end of the webinar and discover that they are asking $997 - with an additional OTO, which to my way of thinking was simply not a realistic price point, regardless of the claimed income potential. We know how that works in a perfect world - and the world ain't hardly perfect.

    So my question is this. Do you think it's better to mention the price early on, after showing some of the goodies and communicating that if you stick with the webinar until its conclusion, you will feel that the product is fairly priced - or, don't mention price until the very end? I would find it difficult to advise my friend to use a sales technique that I personally despise, unless that's just the way it's done and sellers feel that people with my attitude can just, 'go pound sand?'

    Thanks, again. You are most kind. When I grow up I want to be just like you. :-) :-) :-)
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    • Profile picture of the author MikeFriedman
      Originally Posted by OptedIn View Post

      Damn, Jason. Besides being incredibly generous with your time, there isn't a word of what you posted that doesn't make perfect sense. lol I'm helping a friend with this and I will advise him to run his campaign exactly as you have outlined.

      Here's a question. My own experience with these webinars has left me livid when I would sit through something that I found interesting, that I thought should be priced at let's say, $297 - only to get to the end of the webinar and discover that they are asking $997 - with an additional OTO, which to my way of thinking was simply not a realistic price point, regardless of the claimed income potential. We know how that works in a perfect world - and the world ain't hardly perfect.

      So my question is this. Do you think it's better to mention the price early on, after showing some of the goodies and communicating that if you stick with the webinar until its conclusion, you will feel that the product is fairly priced - or, don't mention price until the very end? I would find it difficult to advise my friend to use a sales technique that I personally despise, unless that's just the way it's done and sellers feel that people with my attitude can just, 'go pound sand?'

      Thanks, again. You are most kind. When I grow up I want to be just like you. :-) :-) :-)
      I won't speak for Jason, but the experience you are describing sounds like a failure on the salesperson. The feeling that you should have at the end is more of shock that it is ONLY $997, not that it should be $297.
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      • Profile picture of the author OptedIn
        Originally Posted by MikeFriedman View Post

        I won't speak for Jason, but the experience you are describing sounds like a failure on the salesperson. The feeling that you should have at the end is more of shock that it is ONLY $997, not that it should be $297.
        I have yet to encounter any product where I had that feeling. lol Most crap I that see I would be very hesitant to spend $297, but of course I am not the target buyer. I stopped buying anything a very long time, ago.

        That said, most of the limited items that I did spend $297 on, I am still using, today, so I guess I did a pretty good job of determining the price/value in relation to my needs.

        I do agree that, "The feeling that you should have at the end is more of shock that it is ONLY $997, not that it should be $297." That seems like an excellent way to approach things from the selling end.

        Thanks, Mike.
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        • Profile picture of the author Jason Kanigan
          Originally Posted by OptedIn View Post

          I have yet to encounter any product where I had that feeling. lol Most crap I that see I would be very hesitant to spend $297, but of course I am not the target buyer. I stopped buying anything a very long time, ago.

          That said, most of the limited items that I did spend $297 on, I am still using, today, so I guess I did a pretty good job of determining the price/value in relation to my needs.

          I do agree that, "The feeling that you should have at the end is more of shock that it is ONLY $997, not that it should be $297." That seems like an excellent way to approach things from the selling end.

          Thanks, Mike.
          That's the big benefit of hiring a proven salesperson or copywriter. They know to get things like the 4 Agreements going:
          • Why this, why now
          • Admission that the problem is unsolvable by the prospect alone
          • Size of the problem
          • ROI of the solution.

          The not-so-good salesperson or copywriter is basing their effort around perhaps one of these things only, or even worse a feature of the solution.
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          • Profile picture of the author OptedIn
            Originally Posted by Jason Kanigan View Post

            That's the big benefit of hiring a proven salesperson or copywriter. They know to get things like the 4 Agreements going:
            • Why this, why now
            • Admission that the problem is unsolvable by the prospect alone
            • Size of the problem
            • ROI of the solution.

            The not-so-good salesperson or copywriter is basing their effort around perhaps one of these things only, or even worse a feature of the solution.
            This is a whole other kettle of fish. I have advised him to pay attention to his efforts in this particular arena. You can build an entire webinar presentation around the 4 Agreements.

            Cheers.
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  • Profile picture of the author Jason Kanigan
    Short answer:

    We don't show the price until the end because we need the chance to build value and the ROI case. I would not alter this proven process.

    Long answer:

    We are really getting into Money Tolerance: what amount do you think of when I say, "a lot of money"? A much lower number than most people are willing to admit. It's a limiting belief and we can change it. We spend $1000 a month (soon to be $3000) on coaching just for ourselves as founders and it's well, well worth it. And that's still low. We need and value that external point of view to tell us to stop buying our own BS and get on with the few critical tasks that get the most results.

    That's what money tolerance is, too: one of the few limiting beliefs that has the biggest effect on the world you choose to live in. The place you live, the car you drive, the food you eat and the restaurants you eat at. The entertainment you consume, the furniture you enjoy, the phone you have.

    Our money tolerance and our prospect's / target market's money tolerance can be quite different numbers. This affects your marketing and performance: if the seller's is low and the buyer's is higher, the buyer will say to themselves, "This might be a good deal, but there's something wrong with the quality level here. I bet it breaks or is outdated in a few months. I won't buy."

    So when I see you saying "$X is what I'd pay for the thing," well, frankly (lol) I'm more interested in your friend's target market and their money tolerance. In plain language: what you think is a fair price is not necessarily, and in fact probably, not what your target market thinks is a fair price. And what matters is what the target market believes, not us as sellers.

    This is a goof-up people make in marketing all the time, particularly tech founders. They assume because they're in love with the technical features of their creation, that's why people will buy. Nope. People buy to solve one critical problem. Buyers may not even care about other features or benefits of the thing...in one case I sold a server rack product that did four things. People would buy for the firewall, or the intelligent content filtering, or one of the other reasons...and they didn't care about the others. Months later they would often come back asking for recommendations on what to get to solve another problem, and I could smile and tell them, "The thing you bought already does that." They didn't hear me at the time of purchase, because they didn't care then.

    Everyone assumes other people are like themselves. We are, in many ways, but we have big differences in the ideas we carry around in our heads. Most of those were installed at an early age by accident or well-meaning but wrong parents, friends, and family members. By getting conscious of what these beliefs are and dragging them out into the sunlight, we can start to see their effect...and change them.

    Now looking at a question logically you may well have the business sense to realize "This price is not supported by the revenue I'd make with the investment"--like a product that costs $1000 but will only bring you in $1200 over the next year. It's not really worth it...you can find a better use for those dollars (unless it's really low risk, and you want to have a bunch of things like this running simultaneously to bring in a nice total of passive revenue). That's a different thing than I'm talking about above. If that's the case then yes, I can full well see where you're coming from.

    So what is a "fair price" varies from person to person. It's not really even about the situation. Oh I'm gonna paste in a Mahan Khalsa quote here:

    ##

    "The client's question, "Are we getting the best deal?" (price negotiation) is very different from "Can we afford this?" (value justification); it is important to understand the difference." ~Mahan Khalsa, Let's Get Real Or Let's Not Play

    Khalsa points out two factors to selling here, both of which we grade for during one of our services.

    1. Buyers will get a Return On Investment on your product or service.

    2. They have a problem of a specific size, too.

    The ROI the prospect will realize is different from size of the prospect's problem.

    Price is not the same thing as value.

    And you have to sell to both price and value. Most salespeople sell well to one of these factors, and miss the other.

    ##

    So you have got two issues here: Price and Value.

    Neither are about you...they're about the target market.

    The questions I'm seeing from you indicate to me that your friend needs to go back and find out more about the target market: their money tolerance, how big they believe the problem is that the solution fixes, and what they are prepared to invest to solve it. All answers that can be found in a few days through interaction and information interviews.
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    • Profile picture of the author OptedIn
      Originally Posted by Jason Kanigan View Post

      Short answer:

      We don't show the price until the end because we need the chance to build value and the ROI case. I would not alter this proven process.
      Well, I guess that makes sense, but I get bored, easily and in the end, profoundly disappointed. I guess that means that I really don't see the value in the product for my needs. I am not averse to spending money, I just like to spend it wisely and never having it leave a bad taste in my mouth.

      Long answer:

      We are really getting into Money Tolerance: what amount do you think of when I say, "a lot of money"? A much lower number than most people are willing to admit. It's a limiting belief and we can change it. We spend $1000 a month (soon to be $3000) on coaching just for ourselves as founders and it's well, well worth it. And that's still low. We need and value that external point of view to tell us to stop buying our own BS and get on with the few critical tasks that get the most results.
      Well, let's be honest that you sell at an elite level that doesn't have anything to do with probably 99% of what is offered, these days. I'm not putting any judgement on that. If it's what you do, it's what you do - but few do that.

      That's what money tolerance is, too: one of the few limiting beliefs that has the biggest effect on the world you choose to live in. The place you live, the car you drive, the food you eat and the restaurants you eat at. The entertainment you consume, the furniture you enjoy, the phone you have.
      Those that know me well are fully cognizant of the fact that I have no problem spending top dollar for the finer things in life, in every facet of it, but I have already determined the value of said items. I rarely ask the price of anything at a personal level, but in business I am always more skeptical since all I generally have to go on is the sales presentation and the reputation of the seller, if they even have one.

      Our money tolerance and our prospect's / target market's money tolerance can be quite different numbers. This affects your marketing and performance: if the seller's is low and the buyer's is higher, the buyer will say to themselves, "This might be a good deal, but there's something wrong with the quality level here. I bet it breaks or is outdated in a few months. I won't buy."
      Understood.

      So when I see you saying " is what I'd pay for the thing," well, frankly (lol) I'm more interested in your friend's target market and their money tolerance. In plain language: what you think is a fair price is not necessarily, and in fact probably, not what your target market thinks is a fair price. And what matters is what the target market believes, not us as sellers.
      Agreed. Part of the equation is that I rarely actually need to buy anything, have no major problem that the purchase is going to fix or pain point that will be eliminated. A lot of the crap I used to buy was for educational and entertainment purposes. I'm sure if I had a more legitimate need, my price point would shift, accordingly.

      This is a goof-up people make in marketing all the time, particularly tech founders. They assume because they're in love with the technical features of their creation, that's why people will buy. Nope. People buy to solve one critical problem. Buyers may not even care about other features or benefits of the thing...in one case I sold a server rack product that did four things. People would buy for the firewall, or the intelligent content filtering, or one of the other reasons...and they didn't care about the others. Months later they would often come back asking for recommendations on what to get to solve another problem, and I could smile and tell them, "The thing you bought already does that." They didn't hear me at the time of purchase, because they didn't care then.
      Yes, I can see that. I just bought a piece of A/C electric line filtering equipment. I was trying to eliminate hum entering my broadcast stream. The salesman was going on and on about how this was used in regular terrestrial radio stations and laboriously listing all of the technical features. Finally, I had to say, Yo, Dude! Will it eliminate my hum? Yes? OK. Screw the mumbo-jumbo. Just ship it." lol If it never does anything else for me, I was more than happy to pay whatever price the product might have cost.

      Everyone assumes other people are like themselves.
      Sorry. No! lol

      We are, in many ways, but we have big differences in the ideas we carry around in our heads. Most of those were installed at an early age by accident or well-meaning but wrong parents, friends, and family members. By getting conscious of what these beliefs are and dragging them out into the sunlight, we can start to see their effect...and change them.
      While I see what you are saying, there are no changes needed, here. It's a little too late in the game for that. I have spent many, many decades developing my attitudes and beliefs. I won't be surrendering them any time soon, even if the were wrong, which is impossible to the point of the idea being totally ridiculous.

      Now looking at a question logically you may well have the business sense to realize "This price is not supported by the revenue I'd make with the investment"--like a product that costs $1000 but will only bring you in $1200 over the next year. It's not really worth it...you can find a better use for those dollars (unless it's really low risk, and you want to have a bunch of things like this running simultaneously to bring in a nice total of passive revenue). That's a different thing than I'm talking about above. If that's the case then yes, I can full well see where you're coming from.

      So what is a "fair price" varies from person to person. It's not really even about the situation. Oh I'm gonna paste in a Mahan Khalsa quote here:

      ##

      "The client's question, "Are we getting the best deal?" (price negotiation) is very different from "Can we afford this?" (value justification); it is important to understand the difference." ~Mahan Khalsa, Let's Get Real Or Let's Not Play

      Khalsa points out two factors to selling here, both of which we grade for during one of our services.

      1. Buyers will get a Return On Investment on your product or service.

      2. They have a problem of a specific size, too.

      The ROI the prospect will realize is different from size of the prospect's problem.

      Price is not the same thing as value.

      And you have to sell to both price and value. Most salespeople sell well to one of these factors, and miss the other.

      ##

      So you have got two issues here: Price and Value.

      Neither are about you...they're about the target market.
      Again, I actually do understand and totally agree with every word of that. It's all very well put.

      The questions I'm seeing from you indicate to me that your friend needs to go back and find out more about the target market: their money tolerance, how big they believe the problem is that the solution fixes, and what they are prepared to invest to solve it. All answers that can be found in a few days through interaction and information interviews.
      Agreed. As usual it's an IM MMO product where people look to sell the sizzle rather than the steak. I don't have a problem with that, as long as the steak is the best piece of meat you can shove down your gullet. A charbroiled Whopper has lots of sizzle, but I wouldn't put it in my mouth - at any price.

      Thanks. I am passing all of your info on as I'm quite confident this is all new to him and he will learn a great deal from it.

      Cheers.
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  • Profile picture of the author Jason Kanigan
    Not asking YOU to change lol

    I'm saying look to the target market. Thanks for taking the time to read, digest, and reply to all that. I particularly liked the example of the product purchase to do one thing: get rid of the hum.

    You can qualify for your ideal prospect by starting the webinar or sales copy with a discussion of the things you value...that match up with what they value. Note how different that is from a jump straight into features, or even problem-solution. Get agreement on principles early. Then move into the other stuff.

    A VSL writer who goes from a template could never come up with that approach because it doesn't fit their model ;-)

    At least this thread is an example for newbies of what a competent conversation around positioning sounds like ha ha.
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    • Profile picture of the author OptedIn
      Originally Posted by Jason Kanigan View Post

      Not asking YOU to change lol
      I know that. For some reason facetiousness is never readily recognized on this forum, by anyone. I think that's one reason (only one among many) that my image has suffered. lol

      I'm saying look to the target market. Thanks for taking the time to read, digest, and reply to all that.
      Pure, gold!!!

      You can qualify for your ideal prospect by starting the webinar or sales copy with a discussion of the things you value...that match up with what they value. Note how different that is from a jump straight into features, or even problem-solution. Get agreement on principles early. Then move into the other stuff.
      I do believe I can give him some good input based upon what little knowledge I have in this type of selling (I'm a 'blunt force telemarketer' by trade), but I have, every step of the way made it clear that trying to 'nickle and dime' an offering will only lead to abject failure.

      A VSL writer who goes from a template could never come up with that approach because it doesn't fit their model ;-)
      I can see that. Makes perfect sense.

      Thanks, again.
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    • Profile picture of the author OptedIn
      Originally Posted by Connann View Post

      Use segmentation and a/b test
      Sorry, but I don't see how that addresses the original question. Basically a 'rinse and repeat' cliché variant, but thanks, I guess.
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  • Profile picture of the author DIABL0
    Many will have a 6-week course. So if there are 2 payments then there will still be 2 weeks left in the course and be an incentive to pay.

    if the buyer can receive 100% and still have payments, then the seller is obviously at risk of potentially not receiving all payment. I highly doubt many sellers are doing this.
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    • Profile picture of the author OptedIn
      Originally Posted by DIABL0 View Post

      Many will have a 6-week course. So if there are 2 payments then there will still be 2 weeks left in the course and be an incentive to pay.
      This a single product, so the concept won't work. I suggested he set a price and kive with it.

      if the buyer can receive 100% and still have payments, then the seller is obviously at risk of potentially not receiving all payment. I highly doubt many sellers are doing this.
      True. I have only encountered this around a half-dozen times, over the years.

      Thank you.
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  • Profile picture of the author Chris Brindamour
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    In my experience most people on payments will not finish making all the payments. But that being said, one payment is probably better than no payments??

    Chris
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