Let’s say you sell a $97 product about how to set up and successfully run an organic garden in your backyard. It consists of an ebook, videos and some bonus seed and soil selection guides. It’s delivered completely by download to the buyer’s computer.
Should you offer a 100% money-back guarantee for 90 days if your customer is not completely satisfied? Your first reaction might be, “of course not, anyone could ask for her money back, but there’s no way to get the product back.” It’s like walking into Foot Locker to return a pair of shoes and asking for your money back without giving the clerk the shoes back. Craziness.
Not so fast though. Because the answer is an unequivocal “yes,” you should absolutely offer your customer her entire $97 back if she asks. Even if she then goes on to use your product to create the most bountiful organic garden in the country.
It doesn’t matter how high-dollar your product is, you need a money-back guarantee. And yes, even for your services and your live events, you need some kind of a money-back guarantee, no questions asked.
Why? Because such a guarantee will actually make you money. There are at least 3 reasons why.
1. Confidence Sells
You’ve certainly seen or heard it before: “We’re so convinced that you’ll love your new XYZ that we’re offering you a full 30 day money- back guarantee.” Such language isn’t just for the late-night infomercial.
Your potential customer needs to know that you’ve created something so awesome that you have no fear of going broke from all the refunds.
Let’s think about it. Why wouldn’t you offer a money back guarantee? Because your product/service sucks and you’re simply trying to take the money and run? This is obviously not true, but you better believe the question will enter your client’s mind.
Why would you offer such a guarantee? Because you are confident that no one in their right mind would want a refund. Because the number of refund requests will be so low that it won’t even be a drop in the bucket of your financial empire. Right!
One of the things I teach in my group coaching is how confidence is essential if you want to be considered an authority in your market. So, if you’re confident enough to offer a money-back guarantee, it goes a long way towards establishing that you are an authority in your market, and your customer who’s hesitating should just push the “buy now” button and tap into your brilliance.
2. Good Customer Service Builds Brand Loyalty
I used to sell a lot of affiliate products in the personal development arena. A customer contacted me once about a product’s refund policy. He said there wasn’t anything new to him in the product he purchased. He wanted me to recommend something that went deeper into some Law of Attraction practices.
The product creator gave him the refund, and he bought a more expensive product through me. Great experience for me, and for him.
What if I had said no? My customer would have walked away unhappy, and certainly would have never bought from me again.
If you happily give refunds, and if you follow up by asking your customer how you could have served him better, he will get to know you, like you and trust you. And that’s the magic formula behind a successful business.
We all buy from those we know, like, and trust. And if you develop a relationship for wanting to meet people’s needs ~ and never keeping their money if you don’t ~ you will develop a loyal crowd that raves about you.
3. People Are Generally Good, But Also Rightfully Cautious
If you are resisting the idea of a money-back guarantee, it’s because you’re afraid that people are going to take advantage of you. And undoubtedly, some will. It’s called the cost of doing business.
But guess what? Most won’t. Especially if you are sharing your message to the right audience. You are going to attract good people. And those people have a conscience that keeps them from asking for a refund ~ even if they never used or didn’t love your product. So stop worrying about going broke because of your money-back guarantee.
Those good people are also cautious. And they should be. There’s a lot of junk being sold online, and most people have fallen victim to it at least once if they are frequent online shoppers. This is especially true in the information marketing world.
Your money-back guarantee will turn a skeptical browser into a paying customer. Then it’s up to you to offer something that’s worth her money.
Fear Will Keep Your Business Small
Don’t let the fear of giving refunds keep you from having a money-back guarantee. Do you really want someone’s money in your pocket if they feel they didn’t get anything in return for it?
Take the risk that everyone who buys your product or service will ask for a refund. Giving in to that fear will keep your business small. Embracing the risk will push your business to the next level.
In my market, Brendon Burchard sells $2000 products that always come with a full money-back guarantee. To protect himself, and to add some incentive to stick around, he releases big bonuses to the product once the refund period has expired.
John Assaraf has a 3 day live seminar coming up. He’s offering to write you a check on the spot at the end of day one if you aren’t completely happy. Why? In his words ~ because no one’s ever asked for a refund.
I could go on forever with examples of high priced products and events that give unconditional refunds. I’ve even seen people offer to pay your travel expenses if you aren’t happy at the end of a live event.
This sends a strong “trust me and buy” message to your market. First of all, you’re so good that you know they won’t want a refund. Second of all, even if they do want a refund, your business is such a financial success that it doesn’t impact you.
The Exception to the Rule
If you must have an exception to offering a money-back guarantee, here’s how it should work. And this is something I usually hear from people who provide services.
Let’s say you’re a hypnotherapist. You aren’t comfortable with the amount of time and effort it takes you to do an individual session with someone, and then face the potential of a refund. Okay, make that service non-refundable. But, put time and energy into getting to know a one-to-one client before they book you for that service. They should already know they won’t need a refund from you before they buy.
One way to do this is to state that the service is non-refundable, but to suggest that if a client would like to get to know you better before she makes that commitment, she should buy your completely-refundable $27 ebook for starters.
I think it’s always in your best interest to give someone a refund period. If you can’t bring yourself to that, build the trust relationship before engaging in the non-refundable stuff.
Now it’s your turn. Please share the details of your money-back guarantee. If you don’t have one, why not? Has it ever turned ugly for you with an dissatisfied customer? I value your feedback in the comments below.