Payment Plan Downsell Process
When they say no to the price, change how they pay — not what they get.
A seven-step downsell process that changes HOW customers pay without changing WHAT they get. Start by rewarding prepayment, then offer third-party financing, then half-and-half, check if they still want it, try three payments, then evenly spread payments, and finally offer a free trial as a last resort. Payment plans are a gamble — they make money when more customers close AND complete payments, but lose money when people cancel early. Monitor paid-in-full rates to ensure you are not accidentally moving full-payers onto plans.
- Never drop your price — that is discounting, not downselling
- Frame prepayment as a reward, not the standard: 'It's $15, but $10 if you prepay'
- Align payments with paychecks — charge on paydays
- Start with the longest billing cycle first, then work down
- After adding payment plans, paid-in-full percentage should stay the same
- Reward PrepaymentPresent the total price with interest included. Offer a discount for paying in full. Frame it as: 'It's $15, but $10 if you prepay — that's what most people do.' Never frame it as extra cost for plans.Pro tipUse the Seesaw technique: ask 'Would you rather have giant monthly payments or tiny ones?' They say tiny. Then present prepay as zero monthly payments plus a huge discount.
- Offer Third-Party FinancingSuggest a financing company, credit card, or layaway. Third-party financing means another company pays you now and the customer pays them. For credit cards: 'Would you rather I decide your payment terms or you decide?'
- Half Now, Half LaterAsk when they get paid. Schedule the second half on their payday. If they cannot do half, ask 'What is the most you can put down today?' and schedule the rest on payday.Pro tipIf their card declines, run it multiple times on payday — you can recoup approximately one-third of declined payments.
- Temperature CheckAsk 'On a scale of 1-10, how bad do you want this?' If 8+, continue with more payment options. If 7 or below, ask 'Why not a 10?' and pivot to a Feature Downsell instead.Pro tipThis is a critical branching point — it tells you whether the problem is money (continue with payment plans) or desire (switch to Feature Downsells).
- Split Into Three PaymentsOne-third now, one-third on the next paycheck, one-third on the following paycheck or month.
- Evenly Spread PaymentsEqual payments across the full service duration. For example, 16 weekly payments for a 16-week program.Pro tipBilling cadence affects churn: monthly = 10.7% churn, quarterly = 5%, annual = 2%. Start with the longest cycle first.
- Free Trial (Last Resort)If all else fails, offer a Trial With Penalty — they start for free but pay penalties for not meeting criteria. This is covered in its own framework.Pro tipPeriodically offer existing plan customers the original prepay discount to close their balance early.WarningPayment plans have built-in risk: if people who would have paid in full start taking plans and canceling early, you lose money.
A customer could not afford anything upfront. Hormozi agreed to charge the full amount on the 1st of the month when the customer got paid.
Ask 'Giant monthly payments or tiny ones?' Customer says tiny. Present prepay as zero monthly payments with a huge discount. If they cannot prepay, say 'The more you put down, the lower your monthly.' Pull your chair to their side and work it out together.
Hormozi's first-ever sale came through payment plan downselling. The customer could not afford anything upfront, so Hormozi agreed to charge the full amount on the 1st of the month. The card ran successfully, teaching him that changing payment timing can be more powerful than changing the price.