It must be something in the water …
Or perhaps it’s the fact that lately I’ve been talking about shortly releasing my first course, Market Detective.
Either way, I’ve been getting some questions about whether I plan to offer payment plans.
The short answer is ‘no’.
I don’t believe in offering payment plans, and I advise all my clients the same way.
1) Payment plans don’t make things more affordable.
It’s obvious, right?
Someone who is capable of paying off a six-month $97 payment plan … is also capable of saving up $97 per month for six months, and then buying the product outright.
It’s exactly the same amount of money.
The only difference is they want it now, before they pay you, rather than waiting till they’ve saved up.
But it’s not like they can’t afford it. So I don’t accept that argument.
2) Payment plans reward bad behaviour.
One of the things I learned working with the Barefoot Investor — Australia’s most-trusted personal finance guy — is the danger of ‘buy now, pay later’ technology.
It might seem harmless, but long-term, we’ve seen it promotes an ‘instant gratification’ mentality in people.
In finance, that leads to people eventually getting hooked on credit and racking up crushing debts.
Of course, you won’t send someone broke because you sold them a course on a payment plan.
But the ‘instant gratification’ mindset is toxic to being an entrepreneur, where results take time and effort. If you want to help your customers, why encourage it?
3) Payment plans attract terrible customers.
I once spoke to a dude who was a serial refunder.
He would buy people’s courses … go through them … and then refund before the refund period was up.
Or, in some cases, he’d join on a payment plan, and default on his payments after the first one.
And guess what?
He was a loser.
In years of trying, he hadn’t done a single darned thing to build his business. Yet he’d ripped off more businesses than he could count.
Payment plans and money-back guarantees — where people take little or no risk upfront to buy your product — attract people like him. The worst kind of customers.
4) Payment plans are a misleading income stream.
You can’t count on all the sales you’d expect from a payment plan. Because not everyone who starts one will finish it.
Some people cancel part-way through. In fact, the worst-case scenario is when you pair your payment plan with a refund guarantee … and people buy your course, then stop using it. Then months later they see their card is still being billed … and it reminds them not only to cancel the plan, but to ask for a refund.
Sure, you can still boost your net revenue by using a payment plan. But on balance, I’d rather know my income upfront, rather than hope people keep paying me.
5) Payment plans devalue your product in the eyes of the customer, and obliterate the chances it will change their life.
This is probably the biggest reason of all for me.
It’s a psychological principle that we value what we pay for.
And guess what?
Customers who get products on payment plans … didn’t pay a lot for them.
Who do you think is going to squeeze every drop of value out of a course:
The person who’s only put $97 or $197 down …
… or the person who saved up for six months to fork out $1,000 in one hit?
Obviously, people who saved up for a course are FAR more likely to use it, rather than watch a few videos and then forget about it.
Here’s the thing:
I’ve put LITERALLY hundreds of hours of work into my Market Detective course, and I’m still not done.
[Note: I finished the course in late 2020, so it is now done, but wasn’t when I wrote this]
One of my beta testers for the course told me the other day:
“After watching your course, I believe you have delivered on your value proposition. My once discombobulated market research is now a complete system. There’s absolutely no way I’ll ever return to my old market research process. I feel significantly more confident and more valuable as a copywriter after going through your course.”
Seriously. That is exactly what he said.
Now, I did NOT ask him for a testimonial. In fact, I EXPLICITLY told him to be harsh on me, so I could fix up any weak points with yhe course. But he was genuinely delighted with what he’d seen.
Reading this is SUCH a rewarding feeling. It shows me that the months of work I’ve put into this thing aren’t in vain. And that if a copywriter actually USES my course — like this guy did, as a condition of being a beta tester — it will change their life.
So, knowing that I have something this life-changing to sell …
Why the flowerbed would I cheapen it by giving it to someone to only watch three videos and then forget about it?
I don’t just want people’s money. I want to change their life. But I can only do that if they watch and implement the course. And the odds of that happening are far lower if I offer a payment plan.
If they have no skin in the game, I don’t want their cash in my pocket.
So there you have it.
If you were hoping for a payment plan, I’m sorry to dash your hopes.
But at least you have a free lesson in how to advise your clients in future on why payment plans aren’t a smart idea for their business.
However, if you are still interested in buying Market Detective when it’s ready, then better jump on my email list to hear about it.
Oh, and if so … better start saving up.
For, you know … obvious reasons 😉