Stop Losing Clients! A Simple Technique
(and 'choosing a credit card provider')
One of the easiest ways to lose clients is to allow doubt to foster - by delaying their payment! When a client signs up do you want to wait a week to receive payment and find out if they stick around long enough? Or would you rather have their payment in seconds and get started changing their life?
In this article I'll cover BOTH payment methods. We'll start with the quickest method to set up, and then move on to the one that will make it easy for your client to stay with you month after month. And - I'll tell you who I recommend if you're shopping for a merchant credit card account.
This is great for say your first five to ten clients. Particularly if it's a face to face introductory session, and they ~hand~ you the check right up front. The biggest advantage is there is no set up required. Although I do recommend registering a business name and setting up a business account. It's more professional have them make out a check to 'LifeSkills Coaching' than to 'David Wood - all round good guy'.
A few big drawbacks though. First, you have to handle paperwork, go to the bank, and update your records - spread out over a week or more.
Second, if it's not a face to face intro session - you have to rely on them being motivated and reliable enough to mail you the check, which is also effort for your clients. It's very easy for doubt to set it after they sign up with you. So in the 24-48 hours before they send the check, and are wondering if they made the right move, have they really fully committed to the 1-6 months of coaching until payment is made?
Third, what if the check bounces or they have seconds thoughts after the fact and stop the check? I had this happen once, despite a verbal commitment to at least one month of coaching.
And fourth, every single month you have to ask for another check, and have them go through the same decision making process and effort, and face the same uncertainty.
While you DO still accept checks, I suggest: 1) Get three months payment up front if you can 2) Require them to mail the check within 24 hours, and email you within that time to confirm it's done. 3) Consider holding up sending your welcome pack and not doing the first official session until they confirm the check has been sent. That's usually when you know you have a committed client.
Money orders and bank checks are even better. Foreign currency checks are also fine - your bank will probably charge a small fee and you'll have to wait up to a couple of weeks for it to arrive, plus up to two more weeks for it to clear.
This is one of the best moves I made as a coach. When a client says 'Yes, let's set up', part of my set up procedure is to take their credit card details. Yes - what better time than when they have just said yes and are ready to commit to coaching?
When I get off the phone, I run it through the little Eftpos machine my bank gave me for free (which charges me only 1.85% of the transaction). It's instantly approved (unless they have hit their limit, in which case I know immediately instead of waiting a week to find out a check has bounced) and I email out their Welcome Pack and Receipt, and update my accounting software.
This makes a BIG difference doing it all at once instead of spread out over a week from 'Yes' to 'Check Received' to 'Bank the check' to 'Check cleared'. If in the rare case it is declined, I call them straight away and we make arrangements to rectify it (although I may put a smaller amount through so they have a deposit down).
In the days when I still took monthly payments (I now charge three or six months in advance), when the time came to charge them for the next month, I simply charged their card again and emailed them a receipt. Important: you need to set this up front in the agreement; something like "I will charge your card at the end of each month and send you a receipt, unless I hear otherwise, until we have completed three months at which time we'll review our arrangement."
Another way I have done it is to email them before I charge their card with: "Just a courtesy note to let you know your card will be charged automatically within the next 24 hours. Please feel free to email or call if you have any questions." Although I must say I like the other agreement better.
So where should you go for a merchant credit card account?
Choosing Your Merchant Credit Card Provider
Many merchants on the internet will try to sell you 'real time processing'. By this I mean - your customer enters their card details, and their charge is instantly verified, and the money soon deposited in your account. Personally, I wouldn't worry about this until you have a product to sell. It costs extra, and without a product you don't need it. So just go straight for a simple merchant account.
You can pay 1.85% (I haven't heard of lower yet) to 5% per transaction, so shop around. Some have a set up fee - others will waive it to get your business. Also find out what their monthly fee is (zero if you're lucky). Ask: How long do they hold your money before they deposit it to your bank account (assuming you don't go with your bank), and What do they charge for an Eftpos machine (so you can enter it electronically rather than write it all down and take it to the bank every week).
Outside North America
The place to start is with your bank. Contrast their rates with a couple of other banks. Also check the internet for 'credit card merchant account' and your country.
However if you use an international shopping cart (because they seem to be better), then be careful. This is important when you start to sell products online. I use Professional Cart Solutions for my cart, and I therefore can only choose a Merchant Credit Card Provider who integrates with this cart. No Australian providers at the time of writing integrate with this cart! If you use or think you will in the the future use PCS, then I would go with Pay Systems - decent rates, they integrate with PCS, and they will deposit funds to an international bank account.
Worldpay is fine, and integrates with the PCS cart too. I switched from Worldpay though because they hold your money for thirty days, and they charge 4.5% which starts to add up.
But if you don't care about online products and shopping carts - you don't have to go this route. It is more hassle, and costs a little more because you're going international.
USA and Canada
I searched far and wide, and couldn't find better rates than with:
Practice Pay Solutions (PPS) (click and then look for Merchant Account way down on the left). They are also supported by the International Coach Federation.
Pay Systems also seems to have good rates.
Both integrate with my preferred shopping cart - Professional Cart Solutions. However PPS has the advantage of being so integrated that you can do recurring billing. Both will do Real Time e-checking (i.e. they enter their bank account details, and you charge their bank account!).
OK - that's the scoop. Best of luck in your migration to credit cards! For very detailed information how I use this shopping cart, click here.
A final thought: how many clients do you have to lose because of a bounced check or changing their mind before they pay - before you realise you need to take credit cards?
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