The Power of Payback Period: How Course Creators & Memberships Can Use This Metric To Increase Conversions

by | Apr 8, 2024

It’s not easy being a buyer. 

As much as I love being a marketer, nerding out on conversions, campaigns, and ogling at the “cash collected” column on a client’s spreadsheet…I can’t help but empathize with the buyers. Particularly when it comes to their buying-decision process. Depending on the individual, this process can either be agonizing or rewarding. 

When considering whether to make the investment or not, there are 3 deciding factors that rule this process. 

  1. The comparisons based on cost, 
  2. The comparisons based on value, and 
  3. The return on investment (ROI) → probably the most important metric or the one marketers talk about the most. There’s considerably a lot on the line. 

For instance…let’s say you’re selling an expensive program called Facebook Ad Marketing for Evergreen Funnels, and it costs $5k. 

You know that your competitor is also selling a similar program, at the same price. 

How do you position yours as better in the eyes of your ideal customer? 

How do you help them make an informed decision (in your favor)?

Yes, you talk about ROI. You present case studies. You demonstrate the value of your program versus others in the marketplace. 

But any conversation about ROI is incomplete if you don’t mention its equally formidable twin, PB. 

As in, PayBack Period.

What is the PayBack Period?

Short definition: It is the specific timeframe within which a buyer can expect to recoup their investment. So if they drop $5k into your Stripe account, how soon can they quickly either a) break even and/or b) increase their ROI. 

If their PayBack Period with your program is 12 months and your competitor’s is 6 months…that’s a no brainer decision, isn’t it? 

The overall objective of a PayBack Period is to minimize it without compromising on the benefits. 

Shorter PayBack Period, Stronger Customer loyalty, Less churn. 

So now that you know what it means…let’s explore the principle of PayBack Period, and how you can use it in your offer marketing.

1. Define the Payback Period Clearly:

Communicate to your audience the specific timeframe within which they can expect to recoup their investment. The key word here is specific. Is it 3 days? 3 weeks? 3 months? 

Of course, results vary and every customer’s journey is different – but on average, what results do your star students report? Factor that in your marketing message. 

Side note: these are the exact buyers you want to attract in your marketing – the ones who do the work and get the results. 

Even if you’re running longer coaching programs (i.e., 12-month masterminds) – your customer doesn’t need to wait an entire year before they can experience benefits or actualize key outcomes. 

2. Showcase Immediate Wins:

Nothing like a quick win to increase the value perception of your offer and entice potential buyers to invest. 

Highlight the quick wins and immediate benefits that your program delivers. 

Note that this doesn’t have to be limited to financial wins – it could even be the community or coaching support you provide to clients (i.e., lower their stress and anxiety just because they have you as a sounding board).

Weave in the cost-saving benefits, increased efficiency, or enhanced productivity. These early victories contribute to a shorter Payback Period, ensuring a swift ROI.

3. Quantify Financial Gains:

Numbers speak louder than words. 

Provide concrete data on the financial gains your program offers. 

Break down the potential ROI in a way that resonates with your audience, emphasizing not just the value but the speed at which they can expect to see results.

    4. Offer a Risk-Free Trial Period

    Eliminate hesitation by providing a risk-free trial period. 

    This not only instills confidence in the effectiveness of what you’re selling but also allows potential clients to experience its impact firsthand. 

    There are two ways to offer risk-free trials…

    The first way is to offer it as a free trial. Imagine if the free-trial users experience their first quick win within the  trial period. 

    You’ll have an uptick in free-to-paid member conversions, and your members will rave about their experience to others.

    If free trials don’t appeal, the second option is…you can run a low-cost trial, like a $1 trial for a week. 

    OR…you can offer a paid workshop for the cost of one month of your membership/subscription fee. 

    For instance, if you charge $297 per month. You can host a 3-day workshop for the same fee and offer a 30-day membership access to workshop attendees.

    They get a taste of your coaching and the membership resources.   

    In both cases, you don’t charge the customer’s credit card unless they choose to renew at the end of the trial period or 30 days.

     

    5. Present Case Studies and Success Stories:

    Share real-world examples of how customers have not only achieved their Payback Period swiftly but have also exceeded their expectations. 

    Case studies and success stories serve as compelling evidence of the program’s ability to deliver tangible returns.

    6. Highlight Scalability and Long-Term Gains:

    While emphasizing the swift Payback Period, also showcase the long-term scalability and sustained benefits your program offers. 

    Convey how the initial investment continues to pay dividends, ensuring a positive trajectory of returns well beyond the Payback Period.

    For instance, if you join a 6-month real estate coaching program, you may learn how to choose investments, analyze the numbers, and negotiate deals like a pro. You’ll basically go from a real estate novice to a pro. 

    Post 6-months, you’ll still use everything you learned to make future investment decisions with ease. So not only did you invest in your first real estate deal while you were in the program but you’ll reap the benefits of your newfound expertise for years to come.

    7. Provide a Personalized ROI Analysis: 

    Offer a personalized Return on Investment analysis tailored to your audience’s specific circumstances. This individualized approach demonstrates a deep understanding of their unique needs and business environment, reinforcing the idea that your program is a tailor-made solution with a rapid Payback Period.

    One way to implement this in your Top-of-The-Funnel marketing is to use a detailed business assessment as your lead magnet. 

    Based on the assessment results (after answering 10-12 questions), you’ll know how long it would take you to accomplish your goals. 

    For instance, if you’re making 6-figures but want to leap to the 7-figure mark, the assessment will size that gap and provide you with a rough estimate of the timeline needed to achieve this milestone.

    If you can determine how soon someone can make back their investment, you increase the likelihood that your new lead will close.

    Now let’s take a look at how you can reduce the PayBack Period for your customers…

    Disclaimer: The following recommendations are tailored to the e-learning industry. Not all ideas may be applicable to your specific offers and market. Feel free to consider and implement those that align with your goals, and disregard the ones that don’t.

    1. Deliver a quick win in your program or service. This doesn’t have to be a monetary win. Can you shift beliefs? Share a productivity hack? Recommend cost savings? Share a script or template that improves the quality of your customer’s life? For instance, if they’re vying for the next promotion but don’t know how to broach the subject, your script can help. 

    2. Advertise job opportunities within your community or membership? I recouped my investment and some in a membership, after I applied for a copywriting job advertised in the membership private community. 

    3. Improved customer experience. Offer buyers high-quality customer service. The quicker you can minimize general annoyances, answer their questions, and create a feeling of “you belong here,” the more likely they’ll feel included and motivated to fulfill their part of the bargain. That’s why “success coordinators” are important on several coaching teams. 

    4. Identify where your customers are regressing, slowing down, or quietly quitting. If this is a recurring pattern, then it’s an improvement opportunity to reduce or eliminate these roadblocks.

    Note: I love bonuses as much as anyone else. However, a program or a course that can largely stand on its own, without relying heavily on “extras” is saying a lot. If you work on getting the core content right, the rest follows.

    Final Words

    The real question is…actually there are 2: 

    1. Can you reduce the time it takes to score an outcome(s) with your product? 
    2. Can your customers recoup their investment in that time frame? (This question applies if your offer promise is a financial benefit or an emotional gain.)

    If the answers are, Yes…

    Include the Payback Period marketing angle in your next promotion. 

    If the answer is No…here are 3 steps you can take:  

    #1: Promise reduction: 

    Instead of multiple promises that don’t mean much to your buyers, reduce to one vital promise and cut the extra timeline. 

    For instance, don’t promise them thinner thighs, flat abs, and a perky butt in 90 days. Your potential customers – ones who actually work out, will see right through it. 

    Tighten your offer (no pun intended) to solve one core problem – i.e., thinner thighs in that same duration. 

    #2: Improve your offer content using this two-fold approach:

    1. Regularly gather feedback from customers and analyze the performance of your offer. Use insights gained to make iterative improvements and refine your content over time. 

    1. Look for ways to simplify learning concepts to help your buyer achieve the outcomes quicker. Think cheat sheets, calculators, templates, checklists, scripts, visuals, and efficient software are time saving and result multiplying options. 

    #3: Get Swarovski clear on your ideal buyer: 

    Sounds like advice you’ve heard before, I know, but it’s worth repeating: Not all (potential) buyers are ideal for your offer. 

    For example, a newbie coach who has never made a dollar isn’t a right fit for your advanced “$10k Club” 3-month program. But the coach who has been in business for  a year, has a couple of clients, and isn’t afraid to market themselves, is the right fit. 

    So, vet them. Pre-qualify them. Even reject them if it means preserving your offer sanctity, your reputation, and your audience’s trust in your brand. 

    “What if I implement a PayBack Period, but it’s not working?”

    Take the time element out of your offer promise and focus on solving the problem. 

    Solve the problem for the first few clients without promising a timeline. 

    This approach makes perfect sense especially when you’re trying a new offer or an idea. 

    You don’t know how long it will take to produce a favorable outcome. You’ll have to test the offer with several customers before you can optimize.

    Want deeper insights and lessons about online marketing for your memberships, courses, and programs? Get on the list.