April 21, 2015
Using Installment Plans for Additional Growth
Within most pest control businesses, the rule of 10/25 applies. This means that 10% of your customers often provide 25% of your sales volume. So bringing in a new customer to this elite group can have a oversized impact. Your range of offered ‘Agreements’ is often key to bringing these important customers on board. (Agreements are those services that are rendered on some regular interval for some set fee with some associated metric of success.) Since Agreements tend to have a larger initial or installation invoice, anything we can do to help the customer over the ‘indecision hump’ can be critical. And this brings us to Installments….
Effective software can help you here, by providing a quick and easy method to create and track installment-made payments on larger invoices. Of course, we would always like to get our money in cash, right up front. But, smart companies realize that being payment-flexible can lead to major sales growth. Plus, most Agreement-type services often have a higher margin. So, offering installment plans can help you get and keep new business.
Once upon a time, creating installments was an onerous chore involving obscure tables and too much time with a calculator. But now, good pest control software includes functions to make Installment plans quick and easy to create for your customer. From an open, but posted, invoice you’ll select a menu option or click a button to build an installment plan. In some cases that is all you do. However some software will provide you with a worksheet where you can select among several options before actually building the installment plan: payment interval, number of payments, interest (if any), down payment (if any), and date of first payment. After you have selected your desired options, clicking one more button actually builds the installments. Fast and quick, even while your customer is still on the phone with you!
Two more common features enhance the use of installments: coupons and tracking. Many software packages now provide a quick way to print out reminder coupons for your customer. Some people won’t care about this, but others will be thrilled. By offering to print these, you earn one more small ‘quality service point’ with some customers.
What is tracking? Software today has the ability today to perform daily routines that can provide critical metrics to manage your company. A routine that reviews every installment plan for any late payment is one such feature. Typically, a message or alert appears on you ‘Home Page’ letting you know, for example, that “4 Installments are Late”. Usually some report, like ‘Late Installments’ can be quickly printed to hand to your customer service people. A quick email or phone call can help address a late installment. The key here is to let software do the tracking, allowing you to spend more time actually taking care of your customers.
Heads up Tip- Restrict your installment plans to Invoices over some fixed amount, like $300. Remember, you don’t want to become their banker. But you do want to help your customer with some flexibility, when you can clearly benefit.
Heads up Tip- Installment plans are also good way to collect on seriously late invoices that you are about to give up on.