By Andrew Neitlich

The benefits of installments

By Andrew Neitlich
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JMorrow asked in the last post about whether it makes sense to offer installment payments on larger product offerings. The answer is almost always: Yes, definitely.

I have tested products with and without installments, and without exception, installments increase response by anywhere from 33% to 100%. In the case of one of the sites in this case study, response was 0 until I offered installments, and then response started to grow rapidly.

You want to make it as easy as possible for someone to order. Installments do precisely that. Compare $190 with 4 installments of $47.50. Even though both are about the same, your eye goes to $47.50. Plus, people feel like they have less risk. If they are not satisfied or get burned (this is their mind, not what actually happens), their risk is only $47.50 not $190.


Some guidelines:

– Anything ending in $7.50 is a good number to use, although I’m not sure why: $47.50, $97.50.

– Some upscale or business audiences don’t need installments and don’t want them.

– I don’t give out certificates until someone is paid in full.

– Watch for credit cards expiring before installments will be paid and ask the customer up front the best way to handle that. Some will just pay the full balance.

Yes! Use installments.

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