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By not offering payment plans on any of my products, I’m leaving an additional 20% revenue on the table.

I know this.

Why don’t I offer payment plans then? Because I don’t want people to live outside their means. I certainly don’t want them to go into debt.

If someone cannot yet afford a product from me or they would have to go into debt to buy it, I don’t want their money. I want them out of debt.

I want to help better people’s lives. If buying my product means putting someone in a stressful situation for many months, I don’t want them to buy from me.

This is why I make such high quality content available for free. I prefer people apply the information I give away freely to their business first and make money from that. Many people have reported that they are charging thousands more with their clients as a result of the free information I produce. This is what I want for them!

While I’m leaving money on the table, I know that I’m not the cause of enabling people to live outside their means.

Ben and I discuss the many nuances of purchasing things in installments, going into debt, buying things on credit, and the implications those things have. We talk about how it reverses the hard work and reward cycle by stealing joy and replacing it with a bill.

Highlights, Takeaways, Quick Wins
  • I am passionate about helping people not get in debt in the first place.
  • I make my free material really good, so my hope is that people consume my free material and get results from that.
  • If you pay for information vs. getting it for free, you’re more likely to act on it because you’re invested.
  • We have certain habits because there is some kind of payoff or reward.
  • If you use a payment plan, the high you get from your purchase isn’t as sweet and the negative emotions around paying for it have added bitterness.
  • With a payment plan, your purchase doesn’t last as joy, it becomes a bill.
  • I want money from people for whom I can create value, and if I’m putting someone in a bad situation, that’s not value.
  • I want to help create better versions of people.
  • Debt hanging over you takes away from your focus and your ability to drive yourself to the next level.
Show Notes

    No Debt Mentality

    • 06:44 Sean: For those who haven’t heard me talk about this, I’ve talked in the past about how I have a no debt mentality. I don’t like to owe money, buy things I can’t afford, or live outside my means. I’m not a pro at helping people get out of debt, because I haven’t done that. That wasn’t a path I took, but I am passionate about helping people not get in debt in the first place, especially younger kids. It’s tough. It affects your life and the stress you have. I don’t ever want to contribute to that feeling for people.
    • 07:37 I have these various courses and, now, the conference, and there are people who can’t afford that amount in a lump sum. They’ve asked me before, “Do you have payment plans?” My answer is, “No, I don’t have payment plans, because I want to sell things to people who can afford to pay for this and have it not break the bank and create even more value for them.” If they’re not in that position, I don’t want them to live outside of their means. There are several reasons for this. The price for this thing is set, and that’s the price for it.
    • 08:22 I’ve chosen not to have payment plans, because I don’t want to encourage people to live outside their means, even if it means money to me. I know I’m leaving money on the table by not offering payment plans, but that’s not worth it to me. I don’t want people’s money, I want them to be out of debt. I want to help them get to a point where they can afford to buy something with a single payment. They buy it, it’s theirs, they own it.
    • 08:51 Ben: If I take what you’re saying about your own platform not wanting to offer a payment plan, it obviously means that you also would encourage people not to put that purchase on credit or some other form of debt.

    Full Price or Free

    • 09:10 Sean: Right. Even though I’m not the one offering a payment plan, people could do that. They could buy something of mine even if they couldn’t afford it by putting it on credit or taking out a loan, and I don’t want that. I definitely discourage that. I say, “I don’t want your money. I would rather you be in a position where you can afford to do this without borrowing money to do it.” My mentality is full price or free, I don’t like to discount things, so I make them full price or I make them free.

    I make my free material really good, so my hope is that people consume my free material and get results from that.

    • 09:52 We’ve seen this time and again, people applying the things we share for free and getting really great results. That’s the path I want for people. I’m going to give them a lot of free value, I want them to take it and apply it, and when they’re able to, they can come back and purchase something from me if they want to.
    • 10:46 Ben: The free content that Sean shares is a tool people can use to get themselves to a place where they’re earning more, making more from their clients, and valuing their time more, so they can afford to do these other paid things that he offers. That mindset about the free content Sean shares is important. If you have a useful tool but you’re not thinking about it for the purpose it was meant for, you might not use it and it may not be as meaningful to you. If you see Sean’s free content as a tool for getting to a place where you can purchase those things, like conference tickets and the courses you want, you’re more likely to experience the success from following the principals and values that Sean shares.
    • 11:42 Sean: It’s kind of similar to when you pay for anything, you’re more invested. If you pay for information vs. getting it for free, you’re more likely to act on it because you’re invested. Similarly, if you’re only paying a little bit a month, you’ll think, “Well, it’s not that big of a deal. I can just add it on credit.” You don’t feel it as much. You’ll feel the slow, heavy weight of that debt grow over time, but you don’t really feel it if you’re adding just a little bit more debt on top. That desensitization is also keeping you from acting on the thing you’re purchasing.
    • 12:28 It’s keeping you from actually using the thing you’re purchasing, because it doesn’t feel like you’re as invested. It’s like the kid who gets a car from his parents. He doesn’t value it as much as if he worked summers for five years, saved up, and bought it. He could say, “Wow, I really appreciate this,” but he doesn’t have the sweat equity in it.
    • 12:54 Ben: Somebody values something free more than they value something discounted. Let’s say you did a cheaper version or you said, “I know you can’t afford this conference ticket, but here’s some other stuff. I’ve discounted it, it’s not as far from your price range, and it will help you get there.”
    • 13:16 Sean: We’re actually going to talk about discounts in the next episode.
    • 13:22 Ben: The free stuff, even though it’s not valued quite as much as the paid stuff, it’s valued more than discounted material. Because people do have the ability to value something given to them, it’s easier for them to see what it’s truly worth vs. if you had discounted it. Because they can see that worth, they’re more likely to act on those principals—not as likely as if they had paid the full price for it, but it can still be a useful tool in helping them get there.

    Saving vs. Instant Gratification

    • 14:11 Sean: I really like this idea of working hard, saving up, and then buying something and owning it. Getting that payoff is super rewarding. I’m not sure what you call that, maybe a habit cycle?

    We have certain habits because there is some kind of payoff or reward.

    • 14:36 This is a really good habit to have, where you know that if you work hard up front and save the money, you can buy something and own it. That feels really good, even better than the short term satisfaction of putting something on credit and getting it now.
    • 14:56 Ben: It’s a really big problem in our culture, instant gratification. That’s exploited by marketplaces. Just go to your local grocery store—that’s why they have those kiosks set up right by the checkout register. People see something and they want to buy it, so they’ll do it on impulse. Now, there’s Amazon Prime Now, as if two day shipping for whatever you wanted wasn’t enough. Now, if you’re in the right location and they have the supply, you can get it within a couple of hours. You just pay a little bit more. It’s crazy.
    • 15:41 Sean: The instant gratification thing goes so much deeper than that. We think about our time so differently now. We place such a high value on our time, and we are willing to spend exorbitant amounts for time. We want our Uber driver to show up in two minutes, and we’ll pay more than it might cost for a cab. We want our thing now, so we’ll pay more in the long run by making payments or racking up debt. Amazon, obviously, knows that they’re selling time. Ben was telling me that you’re encouraged to tip when the delivery person brings your thing.

    The Cost of Using a Payment Plan

    • 17:12 Ben: Instant gratification is nice, but if you’re financing it or putting it on credit, you get that feeling upfront of having something, and then you have to pay for it. It’s backwards from the experience of saving up for something, working hard for it, and then getting it.
    • 17:46 Sean: It’s like, “Here’s a nice, ice cold glass of lemonade,” and you think it’s amazing. You spend five minutes drinking it, and then they say, “Now go out and dig a ditch.” Isn’t that the worst?
    • 18:01 Ben: Or, “Here, drink two glasses of ice cold water. Now, go run five miles.” Have you ever tried to run when you’ve just had a bunch of water?
    • 18:30 Sean: Normally, you would work hard to save up the money, pay for something, and then you get it and own it, vs. you get it and own it, and now, for an extended period of time, you’re paying the price.
    • 18:44 Ben: You’re paying more than the price, which adds bitterness on top of the negative feelings of having to pay for something in the first place.
    • 18:57 Sean: You’re paying more every time there’s a payment plan. You pay 12 payments of $100 or you pay $1,000. It’s always more.

    If you use a payment plan, the high you get from your purchase isn’t as sweet and the negative emotions around paying for it have added bitterness.

    • 19:43 Ben: If you don’t do a payment plan, you do the work. It’s kind of like working out. There is some enjoyment, some fulfillment that comes just from doing the work of getting there and saving the money, having that self discipline. Instead of added bitterness, there’s added fulfillment to some of the negative emotions of having to save money up. When you pay for it, the fulfillment and joy you experience from that thing is so much better because you don’t have to experience all the negativity on the back end.
    • 20:22 Sean: I had Cory Miller share something he wrote about this, because we’ve talked about payment plans. Cory said, “The difference between paying for something up front and paying for something with debt or a payment plan is that 12-24 months from now, you won’t be thinking, ‘Why am I still paying $X a month for this thing I got a long time ago?’ It becomes a bill, not a joy.” That’s huge. This thing you want, why do you want it? You think it will bring you some kind of joy. Why would you rob yourself of that joy?
    • 21:16 Ben: You don’t rob yourself of the joy. You get the joy right up front, but it’s a diminished version of it.
    • 21:23 Sean: But then it goes away. With a payment plan, your purchase becomes a bill—it doesn’t last as joy. It’s this thing you begrudge and regret, and that’s not something I want for people. Yes, there are other methods of getting money you don’t have to pay for things that I can’t stop people from doing, but I don’t want to encourage them to flip this situation around where they get the joy upfront, but it’s not something that can be lasting for them. I don’t want them to have that kind of experience or be in that kind of position, so not offering payment plans is my way of discouraging it.

    Leaving Money on the Table

    • 22:22 Ben: You mentioned leaving money on the table if you did a payment plan.
    • 22:30 Sean: I estimate that my revenue would go up by at least 20%.
    • 22:37 Ben: It’s not just the number of people who purchase. Even with Sean’s courses or the conference, people can purchase that stuff from him, but if he did a payment plan with interest, he could get even more. There are hosting costs and bandwidth with courses, so maybe it does end up costing Sean more on the front end for that, but the conference is a long ways off. He could make even more money, not just from the number of people who buy, but from the interest they pay on top of that. You don’t want that money, Sean?
    • 23:29 Sean: Exactly. I don’t want that money.

    I want money from people for whom I can create value, and if I’m putting someone in a bad situation, that’s not value.

    • 23:41 I would rather create a $1,000 product for someone who can buy that product and turn around and make many times that. This is something Matt and I talked about in a recent Lambo Goal episode (Related: e034 Invest in Yourself). I mentioned that I bought a $1,000 course on doing webinars and turned around and turned that into $18,000. We were talking about investing in yourself and how getting knowledge from things like courses, coaching, and conferences has a very real return. That’s the kind of value I want to create for people. Let them put in $1,000 but turn around and make $18,000.
    • 24:37 I don’t want the money from people who put in $1,000 and now they’re in debt, in a worse position, and they’re struggling to pay off that $1,000. That is what the free content is for, that’s why I make it, because I want to give people a tremendous amount of value upfront without asking for anything so I can help give them a better life. If they want to, they can come back and get something that’s even higher value.
    • 25:06 Ben: When you finance something, you’ve got that bill, that debt, hanging over you. That’s noise that’s going to keep you from using what you purchased to it’s full potential and getting the kind of joy, fulfillment, or return out of it that you should be getting. In particular, with the products Sean sells, going into debt and buying something that’s supposed to bring about better results comes from a mindset that it’s okay to go into debt. That mindset has other implications that will make it difficult for you to get as much out of your purchase as you should.

    Debt hanging over you takes away from your focus and your ability to drive yourself to the next level.

    • 26:18 Sean: Ultimately, I want to help create better versions of people. I want my content, my products, and any help that I give people to give them a great experience. I’m thinking about that experience holistically for people in different situations.