by Kathleen Gage
It’s a well known fact that creating information products is a great way to generate revenue and create multiple streams of income. Yet, it’s not enough to simply create your product. You also have to market and sell your offerings.
It would be great if the process ended there. But it doesn’t. There is always the issue of refunds. Yup! Refunds are a fact of life in the world of selling eBased products.
A common question I’m asked is, “How do I make sales stick and minimize refunds?”
Some experts have very few refund requests, while others have an incredibly high number.
Over the years I’ve sold thousands of eBased products including reports, videos, MP3s, multimedia programs, recorded teleseminars, webinars and ebooks with minimal refund requests.
One expert told me that he and his colleagues who do high end launches can get as much as a 10 – 30% refund request rate. Ouch!
Years ago I heard a very, very well known expert say, “If you’re not getting a lot of refunds, you’re not selling hard enough.”
To say I was disappointed with this advice is an understatement. Being pushy, aggressive and not caring how many refunds you get is what has given online sales a bad name. You have to decide what you are willing to live with. Me? I certainly would be hard pressed to ignore a 30% refund rate.
I prefer to sell tight and create so much value the thought of requesting a refund would be the furthest thing from my customer’s mind.
A great way to increase sales is to add a guarantee. Offering a guarantee minimizes the risk in the consumer’s mind. It lets them know you believe in your products and/or services and it makes their decision process considerably easier.
Many people are very hesitant to offer guarantees for a number of reasons. They are concerned they will get too many refund requests, they aren’t sure what type of guarantee to offer, they think people will take advantage of them and they are not sure what type of guarantee to offer.
If you are getting a lot of refund requests, chances are you are doing the one or more of the following:
- Selling to a market that is not a good fit for your product or service
- Your product or service is of very poor quality, thus the high refund requests
- You have overpriced your product or service.
Guarantees encourage people to buy, even if they never use the guarantee. In reality, most people rarely take advantage of guarantees, so you really have nothing to fear if your information products and your services are of high quality.
When you offer a simple to understand guarantee that minimizes risk for the buyer, the better they will feel about their purchase.
Depending on your industry, you may be required by law to offer some type of guarantee. I cannot give you any legal advice on this, so you need to make sure you know what the requirements are in your industry and state.
K.I.S.S. – Keep It Simply Simple
Keep your guarantees simple. The more difficult you make guarantees, with a bunch of stipulations, the less valuable they are. Thus, you are defeating the purpose of the guarantee in the first place.
There are a number of types of guarantees you can offer.
Limited time guarantee: Buyers must ask for a refund within a specific time period.
Long-term or no time limit guarantee: Amazingly, with lower priced the information products, long-term guarantees may minimize refund request.
You would think it would be just the opposite, but when someone doesn’t feel the pressure of having to make up their mind within an unreasonably short period of time they tend to feel better about their decision to buy.
Guarantee based on specific actions: In order to request a refund, the buyer has to have done certain things before they get their money back. For example, if you they bought a home study course, they have to do the first three lessons before you will refund their money.
This type of guarantee can be more trouble than it’s worth.
100% Money back guarantees: With this type of guarantee you are promising to give all their money back if buyers are not satisfied. Don’t be petty by making them pay a handling fee. For the few dollars you will collect, you risk hindering a potential good client/vendor relationship.
Results driven guarantee: The guarantee is valid when you do X you get Y. This is a difficult guarantee to know if in fact the buyer really did do what you asked.
More than your purchase price back guarantee: These have been used very effectively when an online expert is hosting a live event. It is often worded in such a way that the person attends the seminar and if at the end of the first day they don’t feel they got more than their money’s worth, they get all their money back and then some, due to expenses they incurred such as flight and hotel.
Give a Reason Why You’re Giving a Guarantee
Let the consumer know why you are offering a guarantee. Here’s an example of one I have given with information products such as an eReport or eBook: “I know when you read this information and apply the information you will get so much value, you will agree it is one of the best investments you could have made. So much in fact, I guarantee your satisfaction unconditionally.”
Honor your word
If someone does ask for their money back, don’t make them jump through a bunch of hoops; honor your guarantee to a tee.
To avoid getting into any financial trouble, put aside a percentage of your sales for refund requests. Chances are you won’t need to make refunds if your offer extremely valuable content, but just in case, it is a good idea to put up to 20% aside.
Time is of the essence
When a refund request is made, don’t ignore it. Act in a timely fashion to respond to the request. You will gain the consumer’s trust.
Honor your refund policy
Again, if you say no questions asked, that means no questions asked. However, when a request is made you can say, “I will gladly refund your money, and I know I said with no questions, but if you wouldn’t mind telling me why you are requesting your money back it would help me to improve my products.”
The number one way to make sales stick and minimize refunds is to always give more quality than people pay for. Simple as that.
This article was originally published on The Future of Ink and is reprinted here in its entirety for our Magnolia Media Network readers.