Can Multiple Payment ‘Installment Plans’ Increase Your Sales?
With all the experiments I have running right now at Simple Programmer, some days I feel kinda like this guy:
One of the most interesting tests I have going is around the pricing for our flagship product, How to Market Yourself as a Software Developer.
Hang around here a bit and you'll hear me yakking about how important the “offer” is to your overall sales.
Your product is a big part of the offer, sure. But there's a lot more to it than that.
Your guarantee is part of the offer.
So is your pricing.
And the *terms* of your pricing.
Now the offer for this product hasn't changed much in the past 3 years.
We had one version of the course, priced at $299, with occasional discount offers of $100 off.
Well, I'm throwing all that out the window.
Instead of a single, take-it-or-leave-it version of the course, I'm experimenting with offering 3 different pricing tiers.
And rather than requiring the buyer to pay the full price up front, I'm experimenting with breaking the cost up over several payments, billed monthly.
The results so far have surprised me.
For example, 90% of our customers are STILL choosing to buy the most expensive tier of the product at $299.
Which means a couple of things:
1. They're sufficiently “sold” on the value of the product that they see even the top-tier price as a bargain. That probably means I can raise the price without losing many sales.
2. The lower tiers don't seem sufficiently valuable to attract new customers who aren't ready to shell out for the full version of the course. To address this I can either lower prices or increase the real and perceived value—I plan to try both.
But what is even more interesting is this:
50% of buyers are opting to pay in multiple payments rather than a single lump sum.
This is despite the fact that the single payment option is more visible on the sales page—it's a big honkin' red button, while the multiple payment option is a small text link below the button.
It'll take several months to see for sure how all this is gonna shake out.
I'm willing to be cash money though that offering multiple payments like this is going to increase our revenue from this product by 25% or more.
And the best part is, you don't have to be a ninja blackbelt copywriter to try something like this out.
All it takes is a little fiddling with your shopping cart or payment processing software and a quick tweak to your website.
That's all for now—I'll let you know what happens when the dust settles!
P.S. A true “ninja blackbelt” copywriter will know this stuff.
If you ever find yourself interviewing copywriters, a good one will grill you about your list, your offer, and what's worked for you in the past.