Old is new again!
Back in the “old days” most things were bought on cash but if you didn’t have the cash to buy, retailers came up with a system called a lay-a-way plan. The retailer held the goods and you made payment to them. When you were done paying the full price you got your furniture, dishwasher or whatever. Christmas lay-a-way assured gifts for the kids.
Over the years, the plan morphed into giving you the furniture at the point of purchase and making payments. Then someone got the bright idea to charge interest and once that took off credit cards began. Soon, merchants were making more on their financing charges than the sale of goods (GE Capital) and the world of credit was born perhaps to all our chagrin.
History has a way of repeating itself and during this economic downturn the lay-a-way plan has made a comeback in various forms and from unusual sources. Who would have ever thought a Music Festival would be sold that way.
The Coachella Valley Music and Arts Festival in Indio, California offered a Lay-a-way plan this year for the first time in their ten year history. Customers had the option of buying their tickets over several months by putting 10% down and the balance over two additional months, with the final payment due prior to the event.
The payment plan was adopted because other festivals have had to cancel their events this year due to sluggish sales. The plan has been working. The organizer was quoted as saying, “without the lay-a-way option we wouldn’t have done so well”. Like any good idea it is also already being adopted at other festivals in Tennessee, New Jersey, and Arizona.
The NFL also now uses a similar payment plan for their season tickets. You start paying right after the season and get paid up before the new season begins.
We use a lay-a-way option in our own business. The Ultimate Celebrity Branding Experience™ payments are spread out over 12 months; franchise legal work and business consulting are all extended over at least 12 months instead of charging the full fee or requiring the total to be put on a credit card and the client getting killed by interest. We are convinced it has made a tremendous difference in everything we do and why our business is growing rapidly even in this economy.
We aren’t alone and several of our clients including Orthodontist, Donna Galante and Paul Cater (www.CGBraces.com) have added monthly payment programs to their standard pricing. Clearly others should consider doing the same no matter what your business.
If you adopt a variation of the lay-a-way plan in your practice we encourage you not to add interest. All of us are very serious about our dislike of interest payments right now, and we all would love to avoid paying it when we can. You will make more sales by not charging interest and that alone will increase your bottom line.
