Client payment, Pre or Post Float? – DSP 09

At some point, unless your float services are gratis, you’re going to need to collect payment from your floaters.

In this hard-hitting and insightful episode of the Daily Solutions Podcast, Ashkahn and Graham dissect the nuances of addressing the financial side of the equation, and when and how to time payment in relation to people’s floats.

FTS Blog — Prepaying for Floats

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Transcription of this episode… (in case you prefer reading)

Ashkahn: Today we’ve got a question coming in here, which is, “Should you take payment before or after a float?”

Graham: Which I guess it doesn’t have any definitive right or wrong answer. I certainly know float centers that do both.

Ashkahn: Well, yeah, yeah. You mean … There are centers that do one or the other. There’s not a center that does both. Right?

Graham: Yeah, right. They’re not taking payment, yeah, centers that do one or the other is exactly what I meant to say.

Ashkahn: I’m going to charge you half right now. The majority of people, I think, take payment beforehand, I would say.

Graham: From what I’ve seen, but I do know a good amount who take payment afterwards, as well.

Ashkahn: Yeah, I’d say it’s like 80 / 20 or something.

Graham: I was thinking more like 70 / 30.

Ashkahn: All right. So, 75 / 25 is the answer there. So, three-quarters of people are taking payment beforehand. I mean, there’s benefits and downsides like everything. Right?

Graham: And what we do is we take payment beforehand.

Ashkahn: The reason I like taking payment beforehand is just I don’t like dealing with money after people float. Like they come out of their float experience and having to do like a financial transaction, go through that whole thing, to me just feels very like anti-floaty. Like, it’s not the experience I want them to have coming out of their float tank.

Graham: Yeah, pulling people into a very concrete reality when they’ve just kind of been potentially off somewhere else.

Ashkahn: Yeah, that’s like a really loosey-goosey reason but it tends to like, for me at least, overwhelm anything else. Like that to me is just like, okay, well then we’re gonna take payment beforehand because I just don’t want to deal with money with people afterwards. So, that kind of overshadows all the other ones but there are other benefits and downsides. Right?

Graham: And so, I’d say on the flip side, the main benefit of doing it afterwards is that you get to incorporate a membership pitch into collecting payment after someone’s already experienced it.

Ashkahn: Yeah. I mean, they’re feeling great, they floated. Like it’s so much harder to pitch someone on like buying three floats or buying a membership or something before they float and haven’t even experienced it and don’t have any idea what they’re getting themselves into. It’s just like, I know you haven’t even tried this yet but do you want like more of them?

Graham: And you’re throwing people into this really nice, blissful state. So, when they come out, I think a lot of people are really stoked on floating and do want to make the investment to be able to come back. So, that makes it really appealing from the business standpoint to collect payment afterwards.

Ashkahn: It sounds slightly manipulative when you say it like that. It almost feels a little bit like, you know, like then they’re all floaty afterwards and you can talk them into anything.

Graham: I mean, just to be fair, it’s one of the reasons, I think that for us it felt strange to collect payment afterwards. You know, like in my head at least, I can’t phrase it in a way that doesn’t sound like that and we’re just like, okay, well, they’re a little bit floaty and, you know, maybe they’re more likely to want to buy floats for the future when they’re in that floaty state.

Ashkahn: It’s so much an easier conversation to have when you’re like, “Hey, how about instead of paying for this one float that you just went on, how about like getting three for 10 dollars more”, or something, or whatever your kind of standard upsell pitch is. So, that’s a lot harder to do beforehand but that being said, like we do, we figure out ways to still be able to have stuff like that going on, even with taking payment beforehand.

Graham: A lot of it just involves making sure to check in with people afterwards when they’re coming out and see how their experience was and to kind of preload things, too. So, the way that doing prepayment, or, not prepayment, collecting payment before the float, I guess, that we get the membership pitch in, is when they come up, you know, we’ll look at their account and see, is this their first time, have they been in a few different times and let’s just say it’s someone who’s been in three or four times to float.

We might say as we’re checking them out, “Hey, I notice that you come in a fair amount. Just so you know, we have some ways that you can save you money on recurrent floats if you decide you want to come back in more often”. You know, ask them if they have any questions about it and kind of just toss the memberships in even before they get in the tank.

Then afterwards you can always ask how it went and often times people will bring it up naturally, which is how we make some membership sales is we’ve loaded their brain beforehand, they float, it’s kind of in there, and when they come out they’re like, “Actually I think I might want to talk to you about that membership”.

Ashkahn: Well, there’s a lot of like natural segues that you learn as well. Like, if someone comes out and says like, “Man, that was great, like I could do that every week”. You just start to learn how to pick up on certain things that people say. You can be like, “Hey, you know, if you want to but our memberships are for sure the cheapest way to float on a regular basis”, and it doesn’t really feel salesy and you’ll get used to kind of bringing it up and what mostly made me get used to it is I would start bringing it up and people would be thankful. They’d be like, “Oh, cool, yeah, thanks. That’s actually great for me”. Like, it wasn’t weird at all. People were actually happy I was telling them about it. So, it gives you a little bit more confidence to bring it up the next time.

Graham: And so, I guess that’s just to say that pitching memberships is totally possible in this model as well. Ultimately, again I don’t think there’s a right or wrong decision and certainly as hopefully we’ve stressed, ours comes from just straight our kind of gut instinct and opinion-land. We’ve certainly never run any tests or tried both ways to see what the impact is.

Ashkahn: I will say there’s a few other things I like about taking payment beforehand. One of them is that sometimes people aren’t entirely sure how payment is gonna go down when they come in for their floats. So, maybe they heard you have a student discount but they’re not really entirely sure or maybe it’s two people coming in and like they’re not exactly sure who’s gonna be paying for it, if one person’s gonna be covering both or stuff like that. It’s really nice just to deal with all that stuff beforehand so someone’s not sitting in the float being like, “Man, should I try to like beat my friend to paying for this for both of us?”. You know what I mean? It’s just one less thing to have on your mind while you’re floating.

The other nice thing is just that if you do take payment afterwards, you need some sort of system to stop people from just wandering out of your shop after they’re done with their float and not paying you, which I don’t really think a lot of people would do maliciously. I just think people are really floaty after they float and it’s very easy for someone to just wander out, look like how beautiful a day it is outside and like totally leave and not even realize they haven’t paid you yet.

Graham: I’ve definitely heard from centers that collect payment afterwards that has happened to them on several occasions. I mean, people wander out of our shop without their car keys or their purse or their pants, socks or shoes sometimes. So, the idea of walking out without paying does not sound too foreign.

Ashkahn: There’s also a lot of different ways to take prepayment, if you are taking it beforehand, which I guess is another thing worth discussing here and it ranges everything from, there’s two ways people can book, like over the phone or online mostly. I guess people can walk in, too, but that doesn’t happen super often. But booking over the phone or online and you have a decision there to make on either one of those. If you’re gonna take credit card information while they book and if you do take credit card information, you have a choice of whether to actually charge them right then or just have their credit card on file so that when they come in you can charge them and-

Graham: That sentence really quickly turned into like a choose your own adventure path there.

Ashkahn: It is. It is. There’s so many different directions to go.

Graham: So, I mean, and you can choose any combination of these, right?

Ashkahn: For me, personally, I’ve never really been a fan of taking credit card info over the phone. I just think it’s not really something people are super used to doing, especially when just making kind of what feels like a more normal appointment and so it’s always felt to me like a little bit too much friction in the process that I don’t want to be there when we’re trying to get customers to call and make appointments. But as opposed to booking online, where it feels totally normal to pay be credit card then and people are really used to that and it’s almost weirder to not put a credit card in because it’s so standard nowadays.

Graham: The fear on that side is if you don’t collect any kind of credit card information, then you have no real recourse if people don’t show up to their appointments. So, when you do have no-call, no-shows, it’s their first time in, they’ve never paid you with credit card before, you don’t have any stored information, like that’s it. You’re not getting even a late fee, if you charge one.

Ashkahn: Yeah, so, there’s a lot of decisions and it can be kind of difficult to exactly track how this decision changed how many no-shows you have or whatnot. It’s not the easiest thing to get super hard information on, just because the number of these things happening is relatively small and you’d have to spend like very large lengths of time, I think, trying different methods before having enough data to really conclusively say something. So, it’s a bit more of your preference, I think, even focusing on the customer experience and kind of what might be best for that is probably like a better thing to keep in mind while making this decision.

Graham: Yeah, that was actually gonna be some of my closing advice as well, was thinking about it from the person who’s actually going through the process on the other side of the counter and making sure you’re not just thinking about what’s convenient for your business and what makes sense for running your shop but what makes sense for the person coming in.

You’re very much in the relaxation and de-stressing business. So, in the end, you kind of want your whole payment process to be as un-stressful as possible as well.

Ashkahn: If we have someone call on the phone we don’t take credit card payment. If they book online, we take their credit card and we just store it so we don’t actually charge their credit card until they come in for their actual appointments and that makes it even easier, too.

It means if someone wants to book three appointments for them and their two friends, they don’t have to pay for it on their card and then have their friends reimburse them somehow. So, it even makes that customer’s experience a little bit easier. They can just book and then when they come in, all three people can pay separately if they want to and if they have any trouble with booking online or they don’t like booking online or they want to pay in cash or something like that, they can always just call us and like have an even more streamlined way of getting an appointment on the books. So, it really seems super friendly to kind of not inconveniencing our customers.

Graham: When they do finally come in, that’s when we kind of sort out all the payment information, they float, and there’s nothing to do afterwards unless they feel like buying some color therapy glasses or miracle fruit, or something.

Ashkahn: Yeah. They just get to hang out and drink tea or rush right out the door without pants on and enjoy the day. All right. Excellent.

Graham: Yep. Thanks everybody and as always, blast to the moon.

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