This blog post is the fourth in a series called Sales Funnel Paygates – a strategic look at where in the sales funnel your payment transactions can be placed. (See the introductory blog post in this series for more information).
SALES FUNNEL PAYGATE: AT DELIVERY
The next paygate location we’re going to cover is payment at delivery. Pictured below, you’ll see the green paygate at the delivery step of the customer stage.
I believe there are negligible differences between this paygate location and the previous one – paygates between conversion and delivery.
For B2C scenarios, this paygate location offers the same benefits: The ability for the customer to feel like they have some control over the purchase (which tends to increase the likelihood of a purchase). It’s also an attractive paygate for customers who want to hold the purchase in their hands before they pay. Cash-on-delivery purchases, including things like pizza delivery and mail order, use this paygate location.
I don’t think we see this paygate location used as frequently in B2B scenarios as we might think. As you’ll read tomorrow, there is a far more common paygate location for B2B.
Why would a customer prefer this paygate? The biggest reasons are convenience and control. The customer wants to be able to conveniently order when they want and only pay when they receive the item (and pizza delivery is a good example here). And, the customer wants to feel some sense of control over the transaction – intending to withhold payment if the product or service isn’t delivered to their satisfaction.
Why would a business prefer this paygate?Businesses like this because it can increase sales by reducing the barrier to purchasing: It puts off the need to pay while accelerating the sense of ownership for the customer, thus encouraging sales. But just as important is the sense of control for the business: They can deliver the product or service but not fully deliver it until the customer actually ands over the money.
If your business has a lot of receivables, consider using this model to continue encouraging sales while reducing the amount of non-paying customers. If your business struggles with sales and you are demanding cash up-front, consider switching to this model, which is still a risk-minimized business model.