Stand Out with Multiple Payment Options

Increasing sales and profits doesn't necessarily require that you open other locations—just that you offer as many different payment options as possible.

The way Anna Pamula sees it, offering multiple payment options is just another way to provide excellent customer service. The owner of Renu Day Spa in Deerfield, Ill., Pamula lets her customers pay by cash, check, credit or debit card, or gift certificate.

"If I don't accept different forms of payment, I lose customers," Pamula says. "By accepting different kinds of payment, you gain peace of mind, and protect your business."
Sure, she pays a small service fee by permitting customers to use credit cards. But within 24 hours, the credit card company has forwarded the payment to her account. Besides, she reasons, checks can bounce, but she knows right away if a credit card is declined.

Her favorite form of payment, however, may be the gift certificate. "We sell tons of gift certificates for Mother's Day, Hanukkah, Christmas, graduations and Administrative Assistant's Day," she says. "The money is sitting in my bank account, and sometimes it takes [gift certificate recipients] two or three years to cash it in."

More Options, More Sales
Offering your customers more ways to pay is simply good business' say experts. Among them is Ken Burke, author of Intelligent Selling: The Art and Science of Selling Online and CEO of MarketLive Inc., a Petaluma, Calif.-based e-commerce solution provider for online retailers.

"You want to offer as many different ways for the customer to pay as possible," Burke says. "Offering customers more flexibility and options increases sales."

Burke advises businesses not to guess how their customers want to pay. Instead, take a survey of 10 customers and directly ask them that question.

Also examine your total customer base. Is it upper crust, or more middle of the road? The answer will help determine what kind of payment to accept. "With that high-end customer, make sure the payment types are in alignment," Burke says. "The high-end customer wants the convenience of paying with a credit card."

On the other hand, your customers may appreciate the convenience of using debit cards (which draw straight from their checking accounts) to make purchases.

Also give customers payment flexibility by offering e-certificates they can access and pay for online, as well as ever-more-popular gift cards. "Gift cards have exploded, and they're not just for holidays," Burke says. "They're a great, great tool."

Gift cards are beneficial to your business, as well: They bring in new customers, tend to incur higher ticket sales and they reduce chargeback issues

Reprinted from my Wells Fargo Business Letter subscription