Offering Payment Plans

by Mary Fisk-Taylor, M. Photog., Cr., CPP, ABI, API

Jamie Hayes and I own a small, home-based studio in Richmond, Virginia. We specialize in high-end wall portraits and have been in business for over fifteen years. As our business has grown over the years, so has our market area and client list. Unfortunately, with growth comes growing-pains. Several years ago I started to notice our average sales were down and after doing some research I realized that as our session numbers were increasing, our sales averages were decreasing.

As I looked through the last few appointments, I realized that our “committed” client sessions were right on the money. “Committed” clients are the ones that book an appointment through a referral or marketing display. However, many of our “uncommitted” client sessions had lower sales averages. These sessions come to us through auction gift certificates or partnership marketing campaigns. The “uncommitted” clients do not book an appointment knowing what they want, they do it because they are receiving something discounted or free.

When I stopped and listened to the “uncommitted” clients in the sales room, I realized that they were not telling me they didn’t want to buy more, they were telling me they could not buy more now. They would tend to purchase fewer images, smaller size portraits or a lesser finish and we were not getting the results we wanted. So, we decided to offer “uncommitted” clients a payment plan in an attempt to assure higher sales and make everyone happy.

During the portrait consultation and the sales room process, I casually mention that we have a great payment plan option. If the client asks more about it or refers to it again, I know they are interested and proceed to discuss the details. They must select either a 6-month or 12-month option. I take the initial payment that day and the client signs an agreement that allows me to process a credit card payment on the first business day of each month. We keep two credit card numbers on file in case we have a declined or expired card. Our average portrait delivery time is 4 to 6 weeks so by the time an order is ready for delivery we have already collected two or three payments. This will at least cover the cost of processing the portraits.

I realize there is a certain amount of risk involved in payment plans, but luckily we have never experienced an issue with a client not completing their payment agreement. We also do not charge any additional fees for this service, which is always a pleasant surprise for our clients. If you offer payment plans, be sure to have no more than one-third of your clients making payments. To assure financial stability, have the majority of your clientele pay either all or half of their orders up front to keep your cash flow consistent throughout the month.

Our studio has found great success by offering this option. The payment plan eliminates the objection of a large, unexpected investment up front and processing payments each month helps out during slower times in the studio. I have my payment plan dollars to help out with general expenses and get us through the first quarter of the year.