Whether it’s at the point of purchase or at the point where something is past due, there’s something to be said for being flexible about how you’ll be paid. For some businesses, the idea of payment plans has become more popular than ever.
But, it is right for you? A lot of this depends on the type of customers you anticipate having, or that you currently feature in your customer base. Either way, knowing what may work the best for payment plans is a strategy that doesn’t hurt to have in your options.
We looked at some stories recently in Entrepreneur and on the Nerd Wallet news site that also goes into this idea of payment plans. As often happens with modern terminology, some people are calling this BNPL plans (which stands for Buy Now, Pay Later). Either way, it means deferring payments, sometimes to provide great customer service or recovery.
What to know before you set plans up
There is a process to starting up plans that makes a lot of common sense. Here are five steps to remember when deciding on a payment plan option.
Review customer history: Review the customer’s activity before, if that’s possible. Do this before the call takes place and have notes ready.
Be flexible with terms: It’s a good idea to have a basic or regular payment plan as a go-to, but it’s also good to come to the table with two or more options that could work, all depending on what the customer may find attractive.
Check for understanding often: It’s okay for you to make sure verbally that the customer knows the terms and conditions, so repeat those, even at multiple steps if that is needed.
Go contractual: It’s important to get it all in writing and then have your customer sign the agreement, electronically or otherwise.
Set up regular contact points: Never skimp on following up – be sure to call or write back at regular intervals to make sure the agreement is going well.
Some other things to remember
In addition to these recommendations, consider how you ensure the customer has the credit needed to do a payment plan. Applications are a good way to find out this data. They should include all contact info, date of birth and Social Insurance Number (SIN). This is when you can also run a credit check as needed.
Another thing to consider is the interest rate. It benefits most businesses doing payment plans to charge a low-or-no interest rate. That makes the payment plan more attractive to most buyers, although you’ll have to decide for yourself what makes the most sense.
In navigating the various roadmaps of collection and payment, you can have an expert in your corner. At ARO, we make it our purpose to reconcile debt with an approach that puts people first. Find out more about what we have to offer businesses at our website.
