funnelrPayment plans vs subscriptions: which one to sell, and when
A payment plan splits one price into a few payments and then stops. A subscription keeps going until it's cancelled. Here's when to use each, how to price a plan, and what happens to access when payments stop.
A payment plan splits one price into a few payments and then stops: $297 becomes three payments of $109, and after the third the product is theirs. A subscription keeps charging every month or year until someone cancels, and access lasts only while it's paid. Use a payment plan for something with an end (a course, a program, a template library). Use a subscription for something that keeps going (a membership, a community, ongoing coaching).
That's the rule. The details are where people get it wrong, so here they are.
The difference in one table
| Payment plan | Subscription | |
|---|---|---|
| What they're buying | One product, paid in parts | Ongoing access |
| How many payments | A fixed number (2, 3, 6…) | Until they cancel |
| Total price | Known up front | Open-ended |
| Access after the last payment | Theirs for good | Ends when they stop paying |
| If a payment fails | Stripe retries; access closes if it's never paid | Stripe retries; access closes if it's never paid |
| Typical fit | Courses, programs, bundles | Memberships, communities, coaching |
When a payment plan is the right call
Offer a plan when the product is a one-off but the price makes people hesitate. The buyer wants the whole thing; they just don't want it all on one card statement.
- Courses over about $150. Three payments takes the sting out.
- Programs with a fixed length. A 12-week program can be 3 monthly payments that end when the program does.
- Bundles. The full library in three payments, instead of choosing the cheapest single item.
A plan is an option next to the full price, not instead of it. Put both on the page: "Get the course for $297, or 3 payments of $109". The people who'd pay in full still do.
How to price a payment plan
Two common ways:
- A small markup. Charge a little more in total for the convenience: $297 in full, or 3 × $109 ($327). The markup covers the extra card fees, the payments that fail, and the time between the first and last payment. Around 10% is normal.
- No markup. Three payments of $99 for a $297 course. It sells the plan harder, and it's simpler to explain.
Whichever you choose, round each payment to a clean number and show the total somewhere ("$327 total"). People do the maths, and a surprise total is a refund waiting to happen.
In Funnelr a plan is one line on the product: how many payments, and either a markup or the exact amount per payment. The button on the page is the same product with the plan's name on the end (data-buy="course@3x"), and the price on it is written by the server, so it always matches what Stripe charges. funnelr check prints the exact amounts before you go live.
When a subscription is the right call
Sell a subscription when the value keeps arriving:
- A membership with new content, calls or a community.
- Ongoing coaching: a monthly retainer.
- Software or a service people use every month.
The test: if someone cancels in month four, should they keep it? If yes, it's a plan. If no, it's a subscription.
Free trials
A free trial (7 or 14 days) lowers the risk of joining. Two things to get right:
- Say what happens when the trial ends. "Free for 7 days, then $39 a month. Cancel any time before and you won't be charged." Put the date on the order page and in the email.
- Let people cancel themselves. Stripe's customer portal lets members cancel, change their card and see their invoices without emailing you. In Funnelr it's linked from the order page; you switch it on once in Stripe.
Monthly or yearly?
Offer both if you can. Yearly at roughly ten months' price is a common choice: committed members save, and you get cash up front. Start with monthly only if you're not sure people will stay a year.
What happens to access
This is where hand-built setups break, because someone has to remember to remove people. It shouldn't be a person's job. With Funnelr, access is checked against Stripe on every visit:
- Payment plan: open while the plan is being paid. If a payment fails, it stays open while Stripe retries the card, and closes if the payment never goes through. After the last payment, it's owned for good, even though the plan has ended.
- Subscription: open while it's active, in its trial, or briefly past due while Stripe retries the card. Closed when it's cancelled.
- Refund: closed within minutes, either way.
The plan also ends itself: Stripe is told to stop after the last payment, so nobody gets charged a fourth time by mistake.
Mixing them with other offers
- Order bumps work with both. With a subscription, the bump is charged once at checkout, and the subscription starts after the trial.
- One-click upsells must be single charges. A plan or a membership can't be a one-click add-on; sell those from their own page. (Why.)
- Courses can be unlocked by a one-off purchase, a plan or a membership. The same lessons, whichever way someone paid.
A simple way to decide
- Selling one course or product? Full price + a 3-payment plan.
- Selling a membership? Monthly + yearly, with a 7-day trial.
- Selling coaching? A one-off intensive (or a plan for it), and a monthly option for people who want to continue.
You can see a full membership running on these rules in the Soundcheck demo (fictional business, fake payments), and Funnelr's own checkout offers a plan on the price card.
FAQ
What is the difference between a payment plan and a subscription?
A payment plan splits one price into a fixed number of payments and then stops; the buyer owns the product after the last one. A subscription charges until it's cancelled, and access lasts only while it's paid.
Should I charge more for a payment plan?
Many sellers add around 10% to the total to cover extra card fees and failed payments. Charging no markup sells the plan harder. Either way, show the total.
What happens if a payment plan payment fails?
Stripe retries the card over the following days, and access stays open while it does. If the payment never goes through, the plan is cancelled and access closes. If it goes through during the retries, nothing changes for the buyer.
Can I offer a free trial with a payment plan?
Trials suit subscriptions, where the buyer is testing an ongoing service. For a plan, a money-back guarantee usually works better than a trial.
Can I do payment plans with Stripe?
Yes. A payment plan is a Stripe subscription that's told to end after the last payment. Funnelr sets that up from one line in the product's config.
