How to Use a Payment Plan to Upsell More Products
Not everybody is going to purchase your high-ticket upsell, at least not at first. How can you increase the number of people who take that higher-ticket offer?
Let’s say that we use our automated campaign to market to these individuals for 3 days in a row, the $997 course, and we have a percentage of people who purchase it. Maybe 1% purchase it or 3% purchase.
Remember, these are buyers; it’s only being promoted to people who bought the earlier purchase.
They go through 3 days at $997 and don’t buy, so maybe we give them a break for a day or two. Now we come back with a payment offer. Perhaps $997 was too much right now, however, we can split this into 3 payments at $337. And, what we will find is, whatever conversion rate that we were able to make on the first $997, we will find that that many people again will purchase at the payment rate.
You might ask, why not start with payments? I’ve seen that you don’t get as many total sales, if you start out with that $337 number. People assign value to something based on the first price that they seriously consider purchasing the item at. So, if they initially consider purchasing something at $997, they’re going to assign more value to it than the $337 payment. This allows us to capture those individuals who are going to pay the full $997 right up front. It allows us to cement in peoples minds that the product is worth $997. And then when we make a 3 payments of $337 offer, people feel like they’re getting a great value for their money because they’re able to begin studying for $337.
Now, we could take this to the next step and after 3 to 5 additional days we could come up with another payment price that we could put in there. So, we might have 10 payments of $97, or 12 payments of $97. Or, we could drop down now to a lower priced online course. Now, this could be a portion of your big online course. Half of the big online course. You could break your big online course down into 2 segments of part 1 and part B.
You could offer them as a special: “you don’t want to invest $997, or 3 payments of $337, for the entire program. But I’ve put together a special offer for you today, and this is part 1 of the program, you purchase that today for $497. And, when you’ve completed part 1, if you wish to purchase part 2 you can. I’ll give you a great deal on it. But, if you don’t, and all you need is part 1, then that’s okay.” Some people will purchase at $497.
Remember, we’re automating all of this in our email campaign. 3-5 days after they’ve had the opportunity to purchase at $497, now maybe they have an opportunity to purchase at 3 payments of $170. 5 days later they have an opportunity to purchase at 5 payments of $97. You can even take this to the extreme and do 10 payments of $57. What you’re doing is you’re allowing yourself to sell, at a fair price, because the price really is the same to everybody that purchases it. You’re allowing people to purchase this at a payment price that works for them. Obviously, the person who’s paying $57 a month, they’re going to pay the same thing, or maybe even a little bit more at the end of the payment term. However, they’re able to make that payment in chunks, in payments, that makes sense for them. Because, that’s what they’re able to afford.
This process allows us to find out what the highest price that someone’s able to afford to make purchases at is. If we were to start out at say 10 payments of $57, instead of, of $497, then a lot of people might opt for the payments of $57, that would have been willing to make the full payment earlier.
In the long run your cash flow is probably going to be a little bit less on the payment, because probably not everybody makes all of the payments. So, certainly that is factored in. The biggest difference here is that if someone makes that $997 purchase, then the money has already been invested. We can do the same thing 7 – 10 days after that purchase, and up-sell to something else.
If somebody goes onto a payment plan of 10 payments of $57, you’re not going to be able to up-sell them to a $3k package 7 – 10 days later. You might be able to up-sell them into $97 / month payments or something like that. What this allows us to do is use this as a filter to determine at what price point individuals on our list are willing to pay. And, based on their willingness and ability to pay, we can offer products and services that fit into their needs and their price point.