This blog post is the sixth 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: MULTIPLE PAYGATES
Today, we’ll be looking at the last type of paygate location in our series. This one is a more of a catch-all because it involves various combinations of the paygates we have looked at previously.
You can mix and match any combination and number of paygates of the ones we’ve discussed previously. For example:
- You might place a paygate at conversion and then another one before delivery. This is a good model if you deal with high credit risk customers but still want to reduce the barriers to purchasing from you.
- You might place a paygate at conversion and at delivery, which you might see in the home repair business where you put down some money up-front and some when the job is complete.
- You might place a paygate after conversion and another after delivery, which is a model where someone commits to a purchase, puts a downpayment down, then pays after delivery. (Pictured below)
- You might place multiple paygates from conversion to delivery, as in the case of a layaway purchase. (Pictured below).
- You might place multiplte paygates at and after delivery, as in the case of mortgages and rentals. (Pictured below).
There are more combinations, too.
Why would a customer prefer multiple paygates? Customers may like this paygate model because it makes larger purchases easier to afford. By breaking up a large payment into smaller payments, it allows customers to purchase something that they might not be able to afford and/or might not be able to save for. And, depending on where you place the paygates in relation to delivery, they might be able to own the product or enjoy the service before putting down a lot of money.
If you sell a higher-priced product or service, this might be a good model to use in your sales funnel. And if you can’t decide whether the paygates should be placed before or after delivery, consider your ability to perform risk analysis and credit checks, as well as the time and effort it will take for post-delivery collection. It might be worthwhile, but it might not be.
Why would a business prefer multiple paygates? Although there is slightly more administrative work, as well as the increased potential for receivables, multiple paygates offers a few benefits: Multiple paygates can reduce barriers to purchasing, which can increase sales; multiple paygates can increase a sense of value in the purchaser, because several smaller payments might be perceived as a lower overall cost than a single larger payment; multiple paygates can also be a good way to spread cashflow throughout your sales funnel (especially if you have erratic sales).