Boosting Your Sales with Trials & Payment Plans
How One Site Boosted Sales by 30% – with the Aid of Clever Payment Plans
“This Lesson is on increasing sales by offering a payment plan, even though most don’t take advantage of it… Absolutely mind blowing. Very powerful stuff.”
~ Jack, Surefire Web Design
Offering payment plans to customers can be troublesome. In addition to the extra accounting issues, you’ll have to worry about expiring credit cards, customers not paying up and more complicated affiliate fee payments.
Like your life isn’t complicated enough?
But are the benefits worth it?
In this test we experimented with offering a payment plan option on a product with an average price of $138. The results that we got were very interesting and they showed that not only
do payment plans increase sales – in some cases, they actually increase sales of non-payment plan purchases too.
Weird, yet true.
Here’s what happened.
The purpose of our test was to find out if:
- More people purchased when they saw a payment plan being offered
- Offering a payment plan caused more purchases to gravitate towards a payment plan rather than paying in full – a situation which is not so desirable since any seller would rather be paid in full upfront rather than later.
The product sold for $129 + shipping for a total price of $138. The payment plan allowed the buyer to make the purchase for 2 installments of $69. Predictably, offering the payment plan did cause a boost in sales.
What was less expected was:
- The impact of the boost.
- The percentage of buyers who actually used the payment plan.
The Experiment
Everything on the page remained the same except for the buy buttons shown below. We put up two versions.
Version A : Ordinary Buy Button
For the button above the results were:
- Total Views: 6567
- Total Purchases: 64
- Purchase Rate: 0.97%
Version B: Buy Button with Optional 2-Payment Plan Option
The next version carried a small link mentioning a payment plan.
For this button above the results were:
- Total Views: 6457
- Total Purchases: 84
- Purchase Rate: 1.29%
What We Learned and What You Can Apply
The impact on sales was quite high. With the payment plan, sales went up by 32.9%.
But here’s the unexpected thing.
Many merchants don’t offer payment plans because they’re troublesome. The thinking is that many buyers will bail on paying the second installment or that too many single-purchase buyers will opt for the payment plan instead and lower present revenue.
We found this to be false.
The Unexpected Result
Of the 84 purchasers who saw the payment plan option – ONLY 13 people picked the payment plan. That’s a mere 15.5%.
Yet the overall boost in sales was 32.9%.
This means that many people were influenced to buy by seeing the payment plan – yet they chose the single payment option.
Could it be that by simply offering a payment plan we established a higher degree of trust and credibility and thus encouraged more sales, even from people who did not wish to use the plan?
We’re still testing this theory out and will share more data soon.
Try this technique out on your site and share your results with us.
Advanced Lesson: Using One Dollar Trials
A while ago tried an experiment: Make purchasing our ecommerce course a no-brainer by allowing people to buy the course on a test basis for only $1.
They could then read it, try it out and if they liked it, they would be billed the balance after the 30 days. If not – they only had to email us and we returned their $1. It was a perfectly ethical, consumer friendly way to allow a customer to test out a great product.
If you’re selling a product with low delivery cost you might want to try this.
Here are some of the lessons we learned:
- The $1 Trial clearly boosted sales. When we announced it we saw a big surge in sales from people on our list who really loved our stuff. When we first launched the trial – 63% of sales came from it.
- Over time this ratio dropped. Over time, it dropped to below 1/3 of total purchases.
- The $1 Trial allowed us to sway many skeptical buyers and it allowed us to gather tons of testimonials from people who test drove our product and then emailed us to say we could bill them.
But what surprised us was that even though the $1 purchase link was clearly visible on our site – the vast majority of buyers (people like you who are reading this lesson) would simply opt to pay us in full immediately. Seriously, we love you guys!
Payment Plans vs. Trials
Whether you use a trial or a payment plan depends on whether you’re selling a physical good that would cost you money to send to the customer or a digital product that costs nothing to deliver.
In the first example with payment plans, the product sold for $138. The cost to manufacture and ship added up to $65.
So even if the customer bailed after the second payment, the merchant would not make a loss since $69 was collected on the first payment.
Rates of customers bailing on payments are surprising low – in most case they are due to accidents such as credit cards expiring before the second payment is made. And a simple email reminder is all it usually takes to collect the due amount. People are primarily honest.
Trial payments, where you ask for a small sum to test the product and collect the rest later are more suited to digital products.
If you’re selling a digital product that is of high quality, not a cheap e-book that you hired a ghost writer to produce – then you could offer more daring $1 trials without fear of people asking for refunds.
Why We Offered Our Course for $1
First, if you’re selling a good product, people aren’t going to return it. Very few people make a purchase with the intention of returning it.
Second, there’s a ton of competition out there and we consider ourselves the best.
The $1 trial allowed us to prove our “Best in Class Guarantee” that states that our course is better than any competing seminar, course or book out there. Our pitch at the time was – If you’ve purchased another online marketing product recently – buy ours too for $1. Then return the one that you appreciate less. We guarantee it won’t be ours.
Third, allowing prospective customers to taste info for free through lessons like this or $1 trials creates goodwill. Many of these readers email us with thank you notes and later become customers.
Here’s an example. As I was writing this lesson yesterday, I received the following email:
Hi Guys
I have read your free info and, as an experienced direct marketing professional, I must congratulate you.
I have read & subscribed to a multitude of so called ‘internet marketing gurus’ over the past 3 years – most are of little use, some of moderate use, and occasionally a ‘star’ emerges.
You guys are definitely one of the brightest stars around & right up there with the best.
During the last 3/4 months I have been setting up sites for myself and some clients. Unfortunately I set my initial sites away on Google PPC in August and fell victim to the ‘slap.’ All of the sites were ‘squeeze’ with little content. I am now collating as much info as I can to relaunch the sites to maximize my Quality Score and SEO.
Your free SEO checklist alone is worth $$$ as I was in the process of producing my own list from all of the info I have received. You have saved me hours of time & I am sure your list is far better than the one I would have produced!
So Guys – I will be purchasing your full course & if the free info is anything to go by, the paid for info must be mind blowing.
In the New Year I will also be setting up a site specifically for internet marketers in the UK and you can bet I will be promoting your products. So, another ‘well done’ guys and feel free to use my comments as you wish.