The Benefits of Giving Customers the Option to Pay Monthly
- 21 Jan 2022
What Form Can These Payments Take?
Generally speaking, the option to pay monthly simply means to let customers pay for the price of a product, but rather than the whole amount up front right away, they instead pay for the product over the course of installments over a few months. Of course, paying monthly doesn’t necessarily mean paying in installments, and this method of payment can vary depending on the business you run.
For instance, if you run a publication business, then you may give customers the option to pay monthly as part of a subscription service. On the other hand, a lot of charities offer their customers the chance to enrol in a monthly lottery by using organisations such as Woods Valldata. This is where customers will pay monthly to have a chance of winning a larger sum, and then the proceeds of those monthly payments go towards the charity. How such payments are taken truly depends on the kind of business you run.
So, what are the benefits of these options?
Customers are Likely to Return
Suppose you are a charity that is offering the monthly lottery option or a publication that has a subscription service. In that case, you are likely going to retain clients by having a rolling monthly payment option. This is because people are less likely to return every month to apply again but will be more than happy to simply let the payment come out on a monthly basis via direct debit. The same applies to if you offer an installment option as due to the stress-free nature of such a payment, you are a lot more likely going to keep customers on board as a result.
You Have a Better Estimate of Revenue
When you have a lot of monthly payments that are waiting to come through, it is going to be much easier for you to estimate how much you are likely going to generate that month as a minimum. Naturally, at the forefront of every business's mind is making a profit. If you already have an idea as to what your income will be, it means that your strategy for the rest of that month can be altered in order to maximise it as much as possible.
A lot of the time, the only thing that stops customers from going through with a purchase is the fact that they cannot afford it. This is no longer the case if you are offering them cheaper monthly installments to spread the cost, and as such, you are going to be increasing your business's conversion as a result.