There are so many financial decisions to make long before your business even opens. Even for established companies, it is in your best interest to continually reevaluate your options so that you can improve your business again and again.
Exponential growth might technically be a pipe dream because there will always be a plateau that will be just too difficult to overcome, but keeping costs low? Maintaining a loyal customer base? Both of these are possible if you simply consider using these customer payment methods:
Upfront Payments
Upfront payments are the most standard pricing option available. You set a price, and a sale is made. If prices go up or down, customers are less likely to be outraged than if, say, they are subscribed to your services, since it’s a one-time commitment, even if they frequently re-stock on your product.
Subscription Models
Subscription models encourage loyalty right from the start. They thrive when they offer their customers an ongoing solution to an everyday need. It is for this reason that the nutraceutical industry is growing rapidly, from $58 billion in 2015 to $91 billion today, and a projected $133 billion by 2025. The subscription model on things like shavers or other everyday essentials helps people spend less and secures their loyalty for years.
And yet, even profitable nutraceutical companies are high risk merchants to most merchant account providers. For traditional credit processing companies, they won’t see the growth of your business, but will instead focus on the fact that 15% of all recurring payments are declined, with that number rising up to 30% depending on the industry. Then there are also the high chargeback costs to consider.
In short, don’t be surprised that even with a great business or a growing industry, traditional companies aren’t jumping to provide you with their services. It doesn’t mean you are entirely out of luck, just that you need to find a provider that understands the “high risk” and is still able to provide you with comprehensive services.
As Calvin Coolidge said, “No enterprise can exist for itself alone. It ministers to some great need, it performs some great service, not for itself, but for others; or failing therein, it ceases to be profitable and ceases to exist.”
Work Orders
Work orders will apply for custom work or services. Essentially, you enter into a legal agreement that the work gets done, and the customer needs to pay. This works well to build up your brand loyalty, but there is always the risk of the customer not paying. Though you have the legal right to that money and the chances of you losing in small claims court are low, going to court can be costly. You will need to weigh the pros and cons, and of course, a great way to offset the cost is to require a down-payment upfront.
Payment Types
Not only are there different customer payment methods to choose for your business, but you are also going to need to carefully work out how you are going to facilitate those payments in question. Accepting credit cards, especially American Express, is going to cost you. On the other hand, some forms of payment, like checks, can be incredibly risky. Payment methods include:
- Good Old Cash
- Personal Checks
- Credit Cards
- Mobile Payments
- Money Orders
- Automated Clearing House or Direct Debit
- Installment Payments
Affordable accounting and processing solutions can help you keep your profits in your pocket. A smarter customer payment method strategy can keep people loyal and encourage more sales on an ongoing basis. Yet, no matter how great your solution is today, you need to be willing to adapt and change it as necessary for the sake of your future.