Payment Plans, High Ticket Sales, & Ethical Marketing

If you've ever offered a payment plan, you know how terrible it can be when someone fails out halfway through. As a business owner, are there steps we can take to limit failed payments? As a customer, what happens if you really regret signing up for the payment plan? Tune in to hear my takeaways on payment plans, refund policies, and the ethics of high-ticket sales. 

Key Takeaways

There are always going to be two sides when it comes to failed payments, and here are the key lessons I took away from the story shared in this episode:

1. Do your research before purchasing a high-ticket program, especially if the program has a strict no-refunds policy. It's easy to get caught up in the excitement of a launch, but make sure you weigh the pros and cons, do your research, and talk to other clients of the program just like you would any other high-ticket purchase.
2. As a coach or course creator, be super clear in your marketing about who your program is for and who's not a good fit so your students can self-select and you only end up with clients you can actually help.
3. If you sign up for a payment plan, you have to finish it. It's not optional. You can't unsubscribe. Don't sign up for something if you can't afford the payments.
4. Refunds can actually be a good thing. Offering a refund window for a course or group program can be helpful for you and your clients to make sure you aren't forcing someone to continue who truly just isn't a good fit for your program and who won't benefit from it in the long run.

Resources & Links

• Watch the free masterclass
• Follow Amy on Instagram @artfulcontracts

Next Steps

Thank you so much for listening! If you enjoyed this episode, please reach out and let me know by sending me a DM on Instagram @artfulcontracts

Here are a few other steps you can take to support the podcast:

• Leave a review on Apple Podcasts
• Subscribe on Apple Podcasts, Google Podcasts, Spotify, or Stitcher
• Share the episode on social media and tag me @artfulcontracts

Episode Transcript

Let's talk payment plans, high-ticket programs, and ethical marketing. This is a conversation that has to have two sides to it, so I'm gonna do my best to get at both of them. So hang with me.

Hey, I'm Amy Nesheim, licensed attorney for online business owners and founder of my own business, Artful Contracts. You're listening to Legal Made Easy, the show that makes the legal aspects of online business easy to understand and implement so you can grow your business with confidence knowing you've got it all covered. Let's dive in.

Somebody came to me a few months back trying to figure out if she could get out of a payment plan for a high-ticket program that she was enrolled in. She was having to pay monthly payments that were a lot. And when I saw the request come through, my first thought was she signed up for a program with a clear no refund policy. She committed to the payment plan. There's nothing that I can do about it. There's nothing I can say that will help her. And the reason for that is that when you sign up for a payment plan, you're committing to that payment. It's a contract in the same way that any other contract for services is a contract. Like you wouldn't just assume that you could stop paying your car payments because you realized you didn't like the car. Like that's not how it works.

But once I heard her story, I really felt for her situation a little bit. The program was just honestly not a good fit for her, but it was one of those things where she couldn't really know that until she was in it and had tried it and realized, like, oh, this is actually not what I needed at all. And part of that was actually because the promise of the program, the marketing for the program did not match the experience she had once she was inside of it. She was not able to make a good decision about whether it was a good fit because the marketing was not super honest, but it wasn't so dishonest that it was like really illegal or misleading or anything.

And the terms of purchase for the program included a clause that said that the coach could substitute services of an equal value. So that means that she didn't have to deliver on exactly what the sales page laid out, as long as what was in the program was close and similarly valuable still for the students. So really, she just she didn't get the experience that she had been looking for or she felt like she was promised. But I still had to tell her, this person who's asking for my help, let's call her Sarah, just for ease of me using words, that I had to tell Sarah that there was nothing that she could do. She had committed to the payment plan. And if she didn't complete it, the coach could send her to collections, could send report to a credit reporting agency that she had failed these payments that she committed to.

So she accepted this and accepted that she had committed to the payments and would follow through on them. She realized, yeah, I did, I did sign up for this, so I have to complete the payments. Um, but she came back to me more recently, like a few months later, after that first conversation. And because every time a payment came through, it's like it it was it was a bad experience that just didn't go away for her because every time, every single month, and a new payment would process and she would see it leave her bank account, and it was just like a reminder of this bad situation that she had gotten herself into, and it bothered her. And so she ended up doing a little bit more research on this coach and realizing that there are some other people having similar problems, and there were more things that this coach had said in her marketing that just didn't add up.

So, what Sarah decided to do was she initiated a chargeback for a few of the payments, and then she got a really threatening email from the coach saying, you know, this violates our terms and we'll take legal action. Now, that coach is absolutely allowed to do that because Sarah agreed to the terms of purchase. And right in there it says, if you initiate a chargeback, we have the right to report it to a credit agency and send those mispayments to collections. And she was uh understandably nervous about okay, so what's gonna happen? Like, what is this? We have the right to take legal action. What does that legal action look like? So she came back to me and was asking about it, and she ended up reversing the chargebacks, but the coach could still report that she did that.

So, first lesson, read the agreements when you sign up for something, especially something expensive, make sure you read the terms before you do anything like file a chargeback. But she figured that out on her own. She just asked me for confirmation, and then but what she actually was coming to me about was she was realizing that this coach was just really being kind of misleading, not totally honest in her marketing, not just for that one program, but for a lot of her packages, and it was really bothering her, and she wanted to do something about it. So we talked about that.

But this coach has you know a pretty big company, and so Sarah was worried like what's gonna happen to me if I report her for misleading marketing or something like that. Can she come back at me? And as a coach, as a high-ticket coach, is that the kind of experience that you want your students or your clients to have? There are definitely coaches out there who they're just all about making the money no matter how. They use high-pressure sales tactics and really strict no refund policies. But is that the kind of experience that most of us want to give our clients?

So I think that there are lessons on both sides of this story. Number one, do your research before purchasing a high-ticket program, especially if there is a strict no refunds policy. Because as soon as you click that pay button, you are stuck. That's it. You are committing to those payments no matter what happens once you get inside that program. High-ticket coaching programs can be super transformational and really valuable, but I think that there's a trend in our industry that people can get really caught up in the excitement of a launch event or with the idea of achieving the transformation, they can get so caught up in that that they forget that it's a $10,000 investment, $15,000 investment. This is a lot of money we're talking about. And you wouldn't just go buy a car just because one salesman said it was great. You look at the car facts for it, you find out if it's ever been in an accident, you shop around for better, better deals. Like you don't just buy it because one salesman said it was great.

And like if you're hiring somebody, if you're ever in that position in your regular job, or even if you're hiring a contractor, usually you're gonna talk to somebody that they've worked with beforehand. And why is it any different with a coach? It's honestly a little bit, and that's to me the way that people just jump into programs. And I've been swept up in it myself, especially when I was first starting out, and you see those big, big revenue claims, big dreams, all of it's possible for you, like you can achieve it too. It's intoxicating, it's intoxicating. I get it, but it's also like, why do we take the marketing at face value? We don't treat any other expensive items like that. So, why is high-ticket coaching in particular, or you know, these expensive courses, which really honestly can be very transformational if they're done well, but they can also be really bad if they're done badly.

And it's especially because these things are really personal and the experience is so important, it can have a huge impact on whether you beat your goals or not if you're spending that much money. So, why is this any different than the way we consume any other marketing or the way we evaluate any other large purchases?

So, before you work with a coach, talk to their clients, and so like a lot of times people get sucked into testimonials, and testimonials are great, but number one, you don't know what the relationship is between the person giving the testimonial and that coach. And also, a lot of times when there's a screenshot from a Slack channel or Facebook group that's sharing a win or something, you don't know the context around that. Like, was that success sustained? Did they have one amazing launch and then a dry spell for three months where they got no business? And that's something you can only find out if you go talk to that person, and you're not gonna find that out just by just from the coach themselves. Anyways, that's my thoughts on that. Do your research before purchasing high ticket, don't just take the launch event or the marketing at face value.

Next lesson is as a coach or course creator, make sure that you're being clear and honest in your marketing. You do not want to have someone have an experience like Sarah did and then go talk to people about it. I mean, number one, you don't want people to have that kind of experience if you are a nice person. If you're, I mean, most of us are becoming coaches or course creators so that we can help people. And Sarah obviously in that situation did not feel like she was helped. She felt bullied. And so if we're trying to help people, we don't want to have clients who have that kind of experience, right?

So the best way to avoid that is to be super clear in your marketing about who your package is for, who it can help, what exactly is included in it, and be honest about it so that people can self-select and actually get the most out of your program. It's not just about getting the most people in, it's providing that transformation for people. And that only works if it's the right kind of people inside your program. Because if that coach had been more honest about what the program actually included and who it was for, Sarah probably wouldn't have bought it in the first place and she could have avoided this whole mess and she wouldn't be thinking about, you know, reporting this coach for unethical marketing.

My third takeaway, and like I said at the beginning, I'm trying to do both sides of this because I really can see both of them, is if you sign up for a payment plan, you have to finish it. It's not optional. Payment plans are not the same as a subscription, you can't cancel it. It's a convenience that the business owner is offering you. And that's another reason why doing your research and thinking about it really hard is important before purchasing a high-ticket program. If you can't on your current level of income, if you can't complete the payments, don't sign up for it.

I know there's so many programs that promise these huge results, but if you go into it assuming that you'll get those results, and those results will be the reason that you're able to pay all the payments, you could end up in a really bad situation.

And the other thing with payment plans is before you decide to hop in on one, they can be, I mean, here's the thing. I'm a believer in payment plans. I think they're a great option for people who really want to invest at that level, but just need to spread it out a little bit. I think that's great. It makes these kinds of packages high-ticket or even like, I don't know, a few hundred dollars if you can spread it out over a few months. It makes it a lot more approachable. It gives more people the ability to access it. I think that's a great thing. But you also want to pay attention to how much interest is tacked on. Actually do the math and decide. Make a conscious decision. Yes, it's worth it to me to pay the extra amount from the payment plan. And I don't think there's anything wrong with that. I think, I mean, there's debate about it in the industry, of course. You know, are we punishing people who can't afford things by adding on the interest?

But on the other hand, it is adding extra cost to the business owner by number one, the extra payment processing fees and the administrative cost of making sure that people are following through on their payment plans, and also the fact that there are people who fail their payment plans. So that's what you're paying for. And that's fine if you want to make that choice, just make sure it's a conscious one and you're not just like, oh, it's lower monthly payments, so that means I can do it, but it's actually tacking on an extra two, three, five hundred dollars on the total amount. And just to be clear here, I'm not saying that Sarah, the person who came to me for help, was just trying to get out of her payment plan. She was coming to it with the right attitude. I think she felt like she was misled and bullied, and she wasn't just trying, like, she tried in good faith to talk to this person, like, I'm not ready for this program yet. Can we stretch it out? Like, can I pause and come back, you know, when I'm more ready for it? And they weren't having that.

So just to be clear, I'm not saying she was just trying to get out of it, but there are people who do. There are people who, I mean, I've had people come to me and say, on a payment plan and say, okay, I'm done. I'm not using this, cancel my payments. And I'm like, uh, no, it's not how it works. And that takes me to my last point on this.

My last takeaway from this story is that refunds, I think, can actually be a good thing. Having a refund policy window can prevent this entire kerfuffle, right? I have a 30-day refund policy on all of my products, and there are lots of people who have you can have it shorter, seven days, 14 days. But because what we offer is so intangible, I think it's important. Even if you're super honest in your marketing, even if you're really clear what's included in the program, there are times when someone joins and realizes, oh, this isn't what I thought it was, or I'm not in the right stage of business for this information, or I thought this would apply to my niche, and it really doesn't. And if what we're trying to accomplish is helping our clients and students, then we're not helping those people by just demanding that they stay committed, right?

Now I understand if you're a service provider or even a coach who does one-on-one, this can be really tough. I'm talking more about for a group coaching situation or a course situation. In those circumstances, I think refunds are really important. If you're doing a one-on-one coaching or services, I get that like taking on that client at all, you're you might be turning down someone else because you only have limited spots in that scenario. Or, you know, if you've already started a 30-day refund policy, it doesn't make sense if you're gonna do like four coaching calls in that time because you've already spent the time with them. So I get that.

But in that scenario, it might be good to think of what's your policy for if someone realizes, you know, two weeks into a three-month container with you that it's not a good fit and and you can't actually help them, or I don't know, your personalities just clash. What's gonna be your policy on that? And writing that into your contract up front can save you these kinds of headaches.

One of my students inside my signature program, Cover Your Assets, actually asked me about this exact thing recently. So she's a coach and she has like a 90-day package, and I think it rolls over after the first three months to month to month or something like that. But she was concerned about having someone sign up for this, you know, relatively long amount of time, like 12 weeks, and then realizing a couple sessions in that it was a truly bad fit situation, or there's an actual emergency where they just couldn't continue and finish out the container. She wanted to not offer refunds as a general policy, but be able to have the flexibility to address those situations without compromising her no refunds policy.

So we talked about it and we put together a some phrasing where it's a no refunds policy, but she has discretion in extraordinary or extenuating circumstances to offer a refund or a partial refund if it's appropriate for the situation. Because she didn't want to get into that situation where she says no refunds and then she actually doesn't even want to continue either because it's not a good fit, or you know, there's actually a good reason that someone can't move forward. She didn't want to be the person who has to say, nope, you have to pay for it, even though we've only gotten through two of your 12 sessions. That doesn't feel good.

So I just want to encourage you to think about that and think about your own times when you've had situations where something just wasn't a good fit and you didn't realize it at first, and build some flexibility into either your refund window, have a refund window, or build some flexibility into your coaching packages if that feels like a good thing for you.

All right, that about wraps us up on this episode. Like I said, it is a tough, it's a tough situation, and I get both sides of it. You don't want people just canceling for no reason. If you sign up for a payment plan as a business owner, having someone fail out halfway through their payment plan is is tough because you were relying on that, and I totally get that. And yeah, if people sign up for payment plans, they should continue it all the way through. But if somebody's not a good fit, or if you weren't honest in your marketing and they ended up buying when it really wasn't the appropriate thing for them, that's that's on the business owner.

So as the consumer, as a purchaser, do your due diligence and make sure that you're really in before committing to the payment plan. And as a business owner, think about your refund policy and if it really helps your students and also be clear in your marketing so you're attracting the right people. All right, I'll see you next time.