Boost Your Sales: Shorten the Sales Cycle by Offering Flexible Payment Terms

The Effectiveness of a Short Sales Cycle

If you’ve ever sold technology, you’ve most likely dreamt of a short sales cycle. Closing a deal with as little friction as possible is the end goal. Your buyers want the same: they want a straightforward experience with as little back-and-forth as possible to get a solution to their problem.

In a perfect world, every sales cycle would be a well-choreographed dance between the two parties, but often, the dance goes array. Hurdles and roadblocks get in the way, and they can turn simple steps into a complex series of phone calls and negotiations. A lengthy sales cycle can be the cause for a deal to fall through.

Negotiating payment terms during the sales cycle is one specific step that can be long and tenuous for both the buyer and the seller. Simplifying this stage is important to mitigate any risk of the deal falling through and provide an improved purchasing experience.

When a prospect learns they have a variety of payment options available to them, they feel more secure in their buying position. Both the buyer and the seller can freely negotiate with less of the anxiety that often accompanies big purchases. With flexible payment terms, the buyer can enter negotiations with a clear understanding of what they can afford and how they’ll pay for it, and the seller can prepare a range of solutions that fit the customer’s needs and requirements, ultimately shortening the sales cycle. 

Shorten your Sales Cycle 

A sales cycle isn’t measured by time alone. The amount of effort required and fatigue experienced may not necessarily add time to the sales cycle, but it adds friction to the relationship. 

A longer sales cycle is the product of increased conversations and drawn-out decision-making. The sales cycle may be unavoidably long when it’s a complex sale with many moving pieces, multiple decision-makers, and specific criteria. For these types of deals, it’s even more important to leverage the right strategies and tools to avoid stumbling blocks and close the deal. More times than not the reason the sales process is drawn out is because of payment negotiations.

What are Flexible Payment Terms 

Flexible payment terms are an effective way for a vendor to receive full payment for services offered, while at the same time, offering their buyer flexibility in how they choose to repay the amount owed. This makes it possible for the vendor to receive full payment while the buyer can mitigate the full upfront cost of services by breaking it into more manageable payments.

Traditionally in a sales cycle, vendors have limited options in the payment terms they can offer. As a software provider, you’re in the business of providing a high-quality solution and, most likely, not in the business of financing. So when it comes to negotiations, your main levers are mostly focused on pricing and packaging. 

Flexible payment terms become a differentiator. You now have more options you can offer to make payment easier, and it also adds another lever that can support negotiations.

Benefits of Including Alternative Financing and Flexible Payment Terms 

With Gynger, you have the ability to provide alternative financing options with flexible payment terms to your customers, all while getting paid upfront. Gynger even gives you the ability to pre-qualify your customers, giving them direct access to Gynger’s financing platform. 

Alternative Financing Options Support Healthy Negotiations 

Negotiation can be a time-consuming and stressful part of the sales cycle. Having flexible financing available lessens the burden when discussing payment terms.

Knowing that a buyer is in a position to make a purchase and the amount they can spend enables level-footed negotiation for both parties. For the seller, they know that a buyer is in a strong purchasing position, while the buyer has comfort in knowing truly what they can afford.

Flexible Payment Terms Increase Sales Conversion

The average close rate of technology sales ranges from approximately 19%-22%.Offering flexible payment terms can help strengthen that percentage and avoid losses due to costs. At the same time, you can enable your customer to  preserve their cash flow, extend their runway, and lower their burn rate. With these benefits in mind and more transparency in negotiations, it’s easier to close the deal and to do so more quickly.

Alternative Financing Options Enable More Accurate Forecasting

Forecasting an accurate sales pipeline is incredibly difficult without fully understanding the buyer's level of intention to buy, their budget limitations, and their ability to make the purchase. 

Going through a financing process early in a purchasing cycle lets both the sales team and the buyer know how much financing they could receive. It also supports the sales rep in determining a much truer monetary amount for their sales pipeline. 

Having a deeper understanding of this information allows sales teams to accurately forecast a sales pipeline and overall company revenue.

Flexible Payment Terms Increase Customer Satisfaction

Providing flexible payment terms and financial alternatives enables the buyer to purchase the technology they truly need without a cost prohibitor. With financing, buyers have the opportunity to explore more advanced versions of vendor offerings and the ability to scale their software purchases into larger contracts as their company grows. 

Four Ways Flexible Payment Terms Increase Customer Satisfaction:

1. Customers have peace of mind in their purchasing ability 
2. The sale can progress to close quickly, saving them time
3. Clear budget expectations allow for an accurate product offering that suits their needs and requirements
4. Customers can pay for an annual contract in full but break the payments into more manageable amounts over time

How Flexible Financing Gives You a Competitive Advantage in the Market

Offering your customers flexible payment terms lets you focus on multiple deals and outsource the billing effort. Once your customers are approved, all they need to do is select custom payment terms, best suited to their needs. Shorten your sales cycles by giving your customers the flexibility they need while you get contracts paid for upfront.

Including alternative financing options from Gynger in your sales process allows you to easily provide innovative payment options without creating custom deals or net new packaging to agree to the payment terms a customer desires. 

Flexible financing gives you an additional differentiator from your competitors that incentivizes your prospects and customers to pick your software over your competitors. 

Best Practices for Leveraging Flexible Payment Terms

Assess the Customer Needs and Preferences

Flexible payment terms will be more helpful for certain customers than others. Prospects and customers with these needs or preferences can be good candidates for flexible payment terms: 

• Customers moving from monthly contracts to annual contracts
• Customers that expect a large amount of growth in the future and are purchasing technology to grow into
• Customers who would benefit from annual contracts and pay flexibly over 30/60/90 days

Discuss Flexible Payment Terms Early in the Sales Cycle

Introducing flexible payment terms at the beginning of the sales process can improve overall sales cycle management, sales cycle speed, and the likelihood of converting a deal to a closed won. Try to share the various options and encourage the prospect to take the initial steps before progressing into more specific pricing and packaging conversations. 

Bringing alternative financing into earlier conversations allows both parties to align on key deal elements and enter negotiations with clear terms and expectations. 

Bringing up flexible payment terms earlier on in sales conversations can lead to:

• Higher contract values and deal sizes
• Longer term commitments
• Reduced friction in negotiations
• Reduced contract churn rates
• Higher quality opportunities and increased customer satisfaction

Flexible Payment Terms Use Cases

New Business

Offer flexible payment terms to new customers and be sure to include it as an element of the initial sales pitch. 

Flexible payment terms allow sales teams to close larger deals with upfront commitments and speed up time-to-close by overcoming payment term objections.

Renewals

It is incredibly valuable to offer flexible payment terms when evaluating existing customers for renewal or when upselling new products and services. Doing so can increase customer retention and overall customer lifetime value. 

Flexible Payment Terms are Effective in Shortening the Sales Cycles

If you're looking for new ways to better manage your sales cycle, offering a customizable payment option early on in your customer conversations has proven to be effective in shortening your sales cycle, increasing your new sales pipeline, and improving customer satisfaction.

Incorporating these strategies into your overall sales process will result in better lead qualification and lead scoring. Flexible payment terms are a win-win scenario for both the buyer and the seller, ultimately boosting lead generation and improving the buying experience.

Want to accelerate sales by letting customers pay flexibly, while still getting paid upfront? Explore how Gynger can help.