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When it comes to ideas for boosting revenue, WooCommerce payment plans are often overlooked and then ignored completely. However, there is no denying it that when it comes to high-ticket purchases, most of us would prefer a convenient payment plan instead of shelling out the entire amount immediately.
What’s more, a payment plan could be an excellent motivator for customers to keep coming back to your store instead of going to your competitors.
When done correctly, payment plans bring about many benefits. In this post, we’ll discuss those benefits, go over a few use cases for payment plans, and show you how to implement them on your site.
Benefits of Payment Plans
Payment plans not only appeal to your customers but can benefit your store sales as well.
1. Reduced Cart Abandonment Rate
Lack of payment options is one of the main reasons for cart abandonment. One way to combat it is by introducing additional payment processors such as PayPal, Google Wallet, and others.
Another great way to reduce cart abandonment is to remove the objection of high cost by adding payment plans to your store. With a perceived lower cost upfront, customers will be more inclined to finish the checkout process and have the satisfaction of being able to afford the desired product.
2. Better Brand Loyalty and Improved Customer Retention
According to statistics, customer retention comes at a lower cost than new customer acquisition so it pays off to do whatever you can to retain customers and get them to come back to your store time and again.
With a payment plan in place, customers are more likely to return to your online store than to choose a competitor that isn’t as flexible when it comes to payments.
You’ll also benefit from increased brand loyalty since customers will know that you care about their needs and preferences which puts another point in your favor.
3. Increased Conversion Rate
Directly tied to the point above are the increased sales and conversion rate that happen as a result of allowing customers to choose a payment plan during the checkout process.
Pair that with a simplified checkout process and it’s easy to see how payment plans can quickly improve your bottom line.
4. Allow You to Remain Competitive
Payment plans are not as common in online retailers. By adding them to your store, you will be able to stay one step ahead of your competitors and differentiate yourself from the crowd. This means you will be able to attract more customers and remain competitive at the same time.
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Three Use Cases for Payment Plans and Deposits
Payment plans and deposits can be used for a variety of situations. Here are three examples where you can implement them, regardless of the types of products or services you sell.
1. Allow Payment Plans for More Expensive Physical Products
Payment plans can facilitate the purchase of more expensive physical products. In most cases, payment plans will be offered for high-end products like in Apple’s example. As you can see from the screenshot below, they offer special financing options and several payment plans to appeal to more customers.
2. Add Payment Plans to Services Like Coaching
Another example of using payment plans is with services like coaching or consulting. The screenshot below shows an example payment plan that Michael Hyatt uses to sell his high-end coaching program. Note that with the payment plan, clients wind up paying more in the end, like we’ve described above.
3. Use Payment Plans For Digital Products Like Courses
You can also use payment plans for digital courses such as courses, masterclasses, workshops, webinars, and more. In the example below, you can purchase the course for a one-time payment or using a payment plan which comes out to be slightly more expensive than the full payment.
Three Key Things to Consider Before Introducing Payment Plans
Now that you know the benefits of payment plans and different ways to use them, there are a few key considerations to keep in mind before you implement them on your site.
The Terms of Your Payment Plans
The first thing to consider is the terms of your payment plans. You’ll want to draft an official document that outlines how much the payment costs, how long will the plan last, and the frequency of payments.
In an ideal situation, you should break up your payment plan in such a way that the number of payments equals the cost paid in full. However, it’s common for payment plans to include an extra fee that raises the total price slightly and covers the cost of not receiving the full amount immediately as well as the additional risk of a potential failed payment.
The Duration of the Plan
The second consideration is the duration of the plan. Think about the final cost of the purchase and use it as a guideline to determine the appropriate duration of the payment plan.
For example, a smaller purchase can be split into three payments over three months while a high-ticket item might require a 6-month or longer plan.
The last item to consider is whether you will use manual or automatic billing.
With manual billing, you’ll need to make sure to keep a record of the plan duration and the number of monthly payments as well as set a reminder to send the invoice on a particular day of the month.
Automatic billing will not only make it easy on you because you won’t have to keep this information at the back of your head but it will also make it easy on the customer because the amount will be taken out of their bank account automatically. You can automate the billing process using services like Zapier.
How to Implement Payment Plans In Your WooCommerce Store
Adding payment plans to your store is easy with a plugin like Deposits for WooCommerce. Our plugin allows you to accept deposit payments by percentage or a flat amount. Moreover, you can create a custom payment schedule. For example, you can collect one payment at the time of placing the order, another payment after a month, and the remainder of the amount in two months.
The plugin works with both digital and physical products. Each product can have multiple payment plans associated with it and you can even force deposits, partial payments, and payment plans.
On top of this, the products with payment plans will display the number of due days for future payments along with the amount.
You can also enable reminder emails and send invoice emails automatically on the scheduled date for scheduled payments in the payment plans.
Lastly, the plugin works perfectly with WooCommerce so you can take advantage of multiple payment gateways and even allow partial payments for appointments and consultation sessions thanks to the integration with Booking & Appointment plugin for WooCommerce.
Adding payment plans to your store and allowing customers to have a choice of flexible payment options ultimately leads to reduced cart abandonment rate, more revenue, and improved customer experience. Use the tips in this article to implement payment plans in your online store and improve your bottom line. Happy selling!