Assume you have the responsibility for setting the fee to be charged to clients for a new service being offered. After computing a fee that will cover the costs of the program, you realize most people who will seek the service will not be able to afford the fee. What do you do?
Answer preview
The third option is to replace the lump sum payment with the installment payment option. Most customers may not have enough money, but given time they can accumulate enough money to pay for the service. Installment payment will help customers to pay for the service little by little without being pressured. According to West, Kalsow, Fennel, and Mead (2017), Fingerhut’s pricing strategy used the same approach to attract low-income earners in buying their products. Fingerhut targeted the poor by providing an installment payment option that extended the time the customer could pay for products. Therefore, the introduction of the installment payment option will give customers enough time to pay for the service.
