How do I get my existing clientele off of ‘pay as you go’ and onto either a package system or a monthly recurring payment for the product or service that they’re using?
So this is a really good question and what I will to say, straight out of the gate, is that no really successful business of our size (small to medium businesses like mine and yours) no business can become really successful purely on pay as you go. It’s not your easiest way to do it.
The problems with pay as you go are these…
Number 1, you have no idea from week to week how busy you’re going to be. You haven’t got a clue. You haven’t got a clue if a class is going to be busy or not, you haven’t got a clue what you’re diary is going to be like if you do 1 to 1 sessions. You haven’t got a clue how many products you need in stock if you sell products, if you let people do pay as you go. You can’t plan, you can’t project, you can’t do anything.
Number 2, I am a firm believer, and I absolutely mean this, hand on heart… your clientele do not benefit from pay as you go. All pay as you go allows them to do is not commit to their health, fitness or wellbeing. So if you say, “Hey I’m a Pilates instructor and you can just drop in and do pay as you go when you want to” – there is no incentive whatsoever for them when life gets in the way one day and the cat throws up on the carpet and little Jonny is sick, or whatever, there is no incentive for them to actually find a way to get a babysitter or whatever, which they’re perfectly capable of, so they can still turn up to your class. And the reason they’re turning up to your class is because they want to feel better – they want to get out of pain, they want to be slimmer or more toned or whatever…and you not holding them to task with that by just letting them drop in and treat you like a drop in centre doesn’t benefit them at all. I don’t know any health, fitness or wellbeing business – literally none – that has got outstanding results for their customers or clientele that does pay as you go. Because pay as you go just allows people to be lazy and take the easy road and take the easy option. So it doesn’t serve you and it certainly doesn’t serve your clientele.
So what is the process of shifting people from pay as you go onto either a monthly recurring payment or a termly payment, or a half termly payment, or a fixed 3 month package or whatever you want to shift to? To be honest, the best way to get your existing clients off pay as you go and onto something like that is not to start with them, but to start by when you’re bringing in your new customers that are coming in fresh, don’t offer them ‘pay as you go’ because you don’t do that anymore. Offer them the new monthly recurring or termly payments or whatever it’s going to be…and build up a body of people on that first. So you’re going to have your old people on pay as you go and you’re going to have your new people coming in on this new system. Now, when the old people can start to see the new people are on it – and it works for them and they like it – you can then turn to those old pay as you go people and say ‘Hey, these are the reasons we’re trying to take you off pay as you go and we don’t actually offer it anymore to new customers, because there’s no incentive for you to turn up, it’s actually more cost effective for you not to be on pay as you go…’ because you should always structure your packages and your ongoing programmes to be more cost effective for the user than a pay as you go. You could throw in some added bonuses, like if you’re on monthly recurring you get first dibs for booking classes, or whatever. But you just start to show them the value that is so much higher over here on the recurring, fixed programmes than it is over here on pay as you go. That’s much easier to do once you’ve got people already in the fixed and the recurring, etc, etc.
Now, are you sometimes going to get to a stalemate where you’re left with 10 people who just don’t want to leave pay as you go? Yeah, sometimes! And it’s not because it’s not better for them it’s just because it’s change and people don’t like change. They feel like they’re having something taken away from them. So that’s just when you have to make a decision – either are you going to let those clients that have been around for a long time continue as they are until they decide it’s time to stop coming and are you cool with that? Or are you going to politely and respectfully just let them know that ‘That’s cool but just so you know within the next 3 months we are going to be removing the pay as you go option and I would hate to lose you as a customer but I totally understand if you don’t want to come over to this new way of us doing things. Even though it is really better for you and it’s more efficient for you and it means you don’t have to turn up with cash every session or bank transfer (or whatever it is that they’re currently doing). I totally get that and that’s cool. I’d love for you to stay but I understand if you can’t stay.’ So you just make the decision – are you just going to let them carry on for as long as they’re going to carry on for, or are you going to say no that’s it – close the doors – no more pay as you go allowed.
But that’s the way I would recommend doing it. And again, genuinely – hand on heart – anyone who’s followed our process and used our templates of letters, etc, for the way in which you communicate this change to people – they have not had a problem moving people from pay as you go over onto the monthly. And on average, someone makes 30-35 percent more per month as soon as they move people from pay as you go over to monthly recurring or longer term programmes and packages. So you can actually afford to lose some of your clients because your income will go up overall anyway when you make that switch. It is scary and I do get it…and it can be applied to any industry. People say ‘Well I’m a physiotherapist so it can’t apply to me because people just come in until they’re fixed.’ It can apply to you – it absolutely can apply to you – because you can decided there’s a minimum number of sessions you want to work with people on and that now is your physio ‘Get me out of pain’ 6 session programme and they have to pay for it. They can’t just turn up for their first session and pay you 50 quid – no they can’t do that – they have to commit to 6 sessions or 3 sessions or whatever it’s going to be. It’s down to what do you think the commitment you need from somebody is for you to be able to get them the result that you want to get them, and to get them out of pain or whatever it is that you’re doing with them.
The key thing is just to get your head around it first. But honesty I can tell you, hand on heart, every single time we’ve done this with a company and they’ve been scared…if they’ve followed to the letter the way we teach to do it, it always works every time! And it’s better – it’s better for you and it’s better for the customer – everybody wins.
Don’t be scared of moving away from pay as you go…and in reality if you do want to significantly grow your business and make more money – and feel more valued because people turn up consistently – you must move away from pay as you go.
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