Embarrassment. What an odd word to use – or is it? Many of the business owners I meet (and lots that I work with) tell me one of the most gut-wrenching things they do is ask people for money. So, I often have to say “I’m going to help you to understand how to ask your customers for payment without embarrassment”.
Asking for Payment. Love It or Loath It?
Micro and side-hustle business owners spend their days carefully creating content that promotes their products or services and sparks interest and conversation from potential customers.
They write blog posts, design lead magnets, record videos that explain what they do, and how they do it.
They get customers and potential clients really interested; these people want to buy what’s on offer.
It’s at that point many of these business owners have problems because now they have to do that thing they hate ….
(drum roll, please)
…ask for payment!
So, How (And When) Should You Ask Customers to Pay?
If you have a product-based business, it’s probably a bit easier. Customers see your product and there is an immediate expectation that if they want it, they have to pay for it. Walking off with it without payment – that’s stealing, right?
But what if you are a service-based business selling skills, knowledge and expertise?
Do you feel you’ve got to ‘prove’ yourself to a customer before you can ask them for payment?
If so, you’re not alone. It’s a common feeling amongst micro and side-hustle business owners, perhaps because they haven’t got a team of other people to fall back on if someone criticises what they do.
With micros (like me), it’s personal!
But if we don’t charge our customers, we don’t make money, and if we don’t make money, we don’t have a successful business.
It really is as simple as that!
Take Your Inspiration About How to Ask Your Customers for Payment From the ‘Big Boys’!
Would you walk out of the supermarket with shopping you hadn’t paid for?
(“I just need to see if this bag of apples suits my needs first!”)
And, is it common practice for you to check whether or not you’ve enjoyed a concert before you pay for the ticket?
Large businesses don’t think twice about charging customers upfront. They don’t cross their fingers that they’ll receive money in time to pay their bills.
Instead, they make sure they get paid!
You might think that big companies can get away with charging upfront because we already know who they are. We trust them.
But most big companies started out as small ones… and if you’re regularly creating engaging with your customers you are helping them get to know and trust YOU in just the same way.
“People Will Pay if I’ve Provided a Good Service… Won’t They?”
[WRY SMILE!]
As a Business Mentor who specialises in working with micro and side-hustle businesses, this is a question I’m asked all the time.
Unfortunately, the answer is NO.
At least, not always.
I once worked with a wonderful hairdresser, who cut, coloured and treated her clients’ hair to perfection. She’d then leave them with her bank account number and sort code, so they could pay her in their own time.
And believe me, some of them took a very long time to pay – while some others never paid.
My hairdresser client soon ditched handing over her bank details, and started using a Square payment device (my favourite) so people could pay for her services as they received them.
This not only boosted her cash flow but, because they were paying with a card at the counter, people also started buying shampoos, conditioners and styling products to take home with them, too!
Here are some methods to help you improve your business cashflow and maybe take away the embarrassment of asking your customers for payment.
1. Say ‘Complimentary’ Rather Than ‘FREE’
It may seem simplistic, but there are masses of underlying reasons why the word FREE can have an impact on how people view an offer.
People just don’t value the things they get for free.
A classic example is attendance at free training and networking events.
I was speaking at an event last week, we had over 200 registrations. Fewer than 100 people turned up. Of course there could be valid reasons why some people had to drop out, but I can tell you (with more the 30-years experience) the drop-out rate for free events is between 40% and 60%.
If those 200 people had paid something – even if it was only £5 – the attendance figure would have been much higher.
Offering services for FREE can also create real problems for you in the future. If they got something for nothing the first time, why should they pay for it the second time? (This is also why I advocate adding value to a special offer, not a discount)
Giving potential customers a sample of what you do is a great idea. Call it a ‘complimentary’ offer, rather than a free one.
Words are a mighty thing. Changing free to complementary carries a whole, different meaning.
In my own case, I offer a complimentary, half-hour Breakthrough Session to help people understand what business mentoring is, and how I work. It also helps both of us to see whether or not we’d be a good fit.
If we’re not right for each other, it’s much better to discover that during a short, complimentary session than further down the line! But if we are, that customer is going to feel happier and more motivated about paying for future sessions.
2. Don’t Give Away Too Much!
Make sure your complimentary offer doesn’t contain all of your best advice and tips… otherwise, why would people buy from you later on?
Let them know what to expect from your offer. If they liked it and want more simply explain how much it costs.
Don’t forget to ask them if they want to buy / subscribe / sign-up. Many a business bank balance remains empty because the business owner assumes that people know they want them to buy something)),
Remember: some will want more, and some won’t. That’s just business. Your focus should be on the first group… and turning them into loyal customers.
3. Specify Your Payment Terms and Processes – Upfront
Explaining how people can make payment will create an expectation of expenditure.
Start by weaving your payment processes into your terms and conditions (if you don’t have any, start writing some or take a look at mine!). Service businesses should offer an agreement or letter of service that states payment terms.
OK, it’s possible that people still won’t pay. But having a professional structure in place means you can take any claims further, with documentary evidence.
4. Ask for Up-Front Payment
Work that runs over a period of time may require up-front payment. For example, you may have to buy something especially to do the work.
Suggesting a 50/50 split can work very well in these circumstances. Simply ask for 50% of the cost up-front, and the remainder when the job is finished.
You can also set up longer-term or instalment payment plans using systems like GoCardless which does take a tiny percentage of the payment, but also helps to ensure you keep that client!
If you’d like to talk more about making (and taking!) money in your micro business, why not book a COMPLIMENTARY Breakthrough Session with me? (Yes, complimentary, not free 😊)
Simply click this link, choose a time, and I’ll do the rest.