The Smart Way to Offer Payments Plans (10 Tips for Doulas + Midwives)

Recently, I've had a number of conversations with clients (doulas, midwives, birth pros) who're feeling challenged by managing payment plans, failed payments, defaults.... and the resulting cashflow problems that defaults create. If you’ve ever struggled with this, you’re not alone. The good news is that with a little strategy and structure, offering payment plans can still be a great way to make your services more accessible... while still protecting your income and peace of mind.

Here are 10 things to consider when offering payments plan...

1. Expect Defaults: Seriously, just expect them. The truth is, there will always be a small number of defaults when you offer payment plans, and this should be accounted for in your pricing with a mark up on payment plans. Although controversial, I wholeheartedly stand by a markup for shouldering both the risk of default and the administrative burden of following up on payment plans. For example, if you have an assistant spending X amount of time per week following up on missed payments, this is an expense you'll have to shoulder, because you have to pay your assistant for that time.
2. Make Financial Projections Based on Pay-in-Full Payments: For the above reason, I strongly recommend making cash flow projections based on your pay-in-full payment pricing for ALL sales, to give yourself a "worst case scenario" sales revenue forecast.
3. Make It Clear That Payment Plans Are NOT a Subscription You Can Cancel: If you want to decrease the number of payment plan issues you have, ensure that every touch point (both PRE and POST purchase) makes it crystal clear that payment plans are offered in good faith to help make your offer more accessible, but that they are not optional and cannot be canceled. This can be included as a tick box when purchased, in post-purchase contracts/terms, on orientation calls, and more. The exact language I use on my own website, and in my contract AND in my terms and conditions (listed at checkout and multiple other places) reads like this: "PLEASE NOTE: If you choose to enroll with a payment plan, you are 100% responsible for honoring your commitment and completing all of your payments. Payment plans are offered as a courtesy and can not be canceled. This is not a "cancel anytime" or a “pay what you want” offer."
4. Use a "Buy Now, Pay Later" Option at Checkout: When you offer Afterpay, Affirm or Klarna at checkout, you'll get paid your full fee up front EVEN IF the customer chooses the payment plan option! This is a win-win for everyone. It also makes defaults a thing of the past. Boom. Problem solved. The best tech tool to offer this option at checkout is ThriveCart. I wrote a whole blog on BNPL options/ThriveCart; read it here!
5. Be Careful of LONG Payment Plans: If a payment plan extends beyond the container of your offer, it will result in a higher number of defaults. For example, I know from trial and error that offering a 3-month coaching program with a 6-month payment plan is going to have more defaults than a 3-month program with a 3-month payment plan. Although long payment plans can be great for accessibility, you'll need to keep an eye on that.
6. Ensure You Follow Up: It's important that you kindly, quickly, and firmly follow up on missed payments, especially in circumstances where you have already delivered access to your curriculum IP and hard-cost services.
7. Prepare Templated Responses for Difficult Situations: Ensure that you have pre-written responses for common difficult situations, and then personalize as needed. It can be difficult to deal with every missed payment circumstance individually, both energetically and from a time management perspective. As much as possible, also try to have someone else (like a VA- Virtual Assistant) deal with these requests, as they can be energetically draining. I love having my VA handle these situations for me, because it can be awkward to send those emails myself and then have a coaching call with that person the same day.
8. Lead With Kindness: Know that most people aren’t intentionally missing payments, and most times it is simply a card error, funds oversight or short-term cash crunch! Lead with kindness, but also ensure that you don’t get walked over. You have delivered a product or service and both you and your client have made a mutual commitment; as long as you have upheld your end it's fair and okay to require that your client uphold theirs. You DESERVE to be compensated for your IP and hard work, and it's your right to be paid.
9. Incentivize Pay in Full Payments: Wherever possible, incentivize pay in full payments. The time and energy cost of managing payment plans at scale is an expense for your business and should be minimized wherever possible. Make the pay-in-full option enticing! Make it so that it's the option most people choose. If they aren't; why aren't they?
10. Create payment plans that charge their card AUTOMATICALLY. You know how your Netflix, Door Dash and Amazon Prime payments just magically go through every month, without you having to lift a finger? You should set your payment plans up the same way. My coaching program offers a 12 month payment plan. I don't manually send every one of my clients an invoice every month and then hope they'll pay it. My software just charges their card. No one on either end has to do anything at all.

Experiencing A LOT of defaults is a sign that you might need to:

• Adjust your client base
• More clearly articulate that payment plans aren’t optional
• Be more discerning about who you work with (are you calling in "not good fit" clients??)
• Shorten payment plan lengths to fit the container.
• Offer Buy Now, Pay Later options by using ThriveCart

Offering payment plans can be a powerful tool to make your services more accessible while still growing your business.

However, to avoid the stress of defaults and cashflow issues, it's crucial to have clear structures and strategies in place. By anticipating challenges, setting firm expectations with clients, and utilizing tools like Buy Now, Pay Later options, you can protect your income and peace of mind. Remember, you deserve to be compensated for your valuable work, and with the right approach, you can offer flexible payment options without sacrificing your financial stability. Take control, lead with kindness, and stay firm in the value of your services—your business will thank you!

Found this info helpful? Comment below and let me know!

xoxo,

Melynda