Reduce Refunds for You and Your Customers
If you’ve ever gone through the process of buying something new only to regret it later, you know the feeling of buyer’s remorse all too well. This sinking feeling can happen with big purchases like a car or a house, or even with smaller items like online marketing programs, software, outsourcing services for your business and so forth.
Then there’s the reverse problem: Preventing your own customers from having buyer’s remorse and asking you for a refund.
This one really hurts, doesn’t?
You go to all the trouble of creating an awesome product, setting up your sales funnel, driving traffic and getting those sales.
And then some cheese head asks for a refund 5 minutes, 5 days or even 50 days after they purchase.
This is especially painful considering that your products are electronic and they get to keep the product and the money.
No, it isn’t fair, but there are ways to prevent buyer’s remorse in your customers and we’ll cover that in just a moment.
First, I thought you might like to know how to prevent buyer’s remorse with your own purchases. We’ve all heard stories of the new marketer who spends thousands of dollars on “how to make money online” programs and never does anything with any of them.
In fact maybe that was you at one time, too.
These days it’s not $7 ebooks you’re thinking about buying, but rather it might be $2000 coaching programs. How do you know it’s the right fit for you? How can you tell if you’re going to be thrilled with your purchase or sorely disappointed?
Crystal balls aside, I thought I might share a few tips on how to choose your next online marketing product, software, web design, outsourcer and so forth so that you only pay for those things that truly help you in your quest to build that super-profitable online business.
1. Do your research.
This is important both before and after you make a purchase. Research can help you compare different options and make sure you’re getting the best deal on whatever it is you’re buying.
In the case of software, is it the right one for your needs? Or if it’s coaching, is it someone with a good reputation that you feel you can easily work with?
Thanks to guarantee periods, once you’ve made your purchase you can still test the waters before you make a final decision. Take some time to read reviews and learn more about what you just bought. This will help you be sure you made the right choice.
2. Know your needs.
Too many would-be online marketers simply start buying programs and software because they sound good. But even if the product is absolutely stellar, if it doesn’t help you accomplish your goals then it’s not for you.
Before you start shopping, know what you need. This will help you narrow down your options and choose the best product for your needs. Once you know what you’re looking for, it’s easier to resist the temptation of buying something that’s not actually a good fit.
3. Consider the long-term.
When you’re making a purchase, it’s important to think about how it will fit into your life in the long run. While a $5000 coaching program might sound extravagant, if it’s exactly what you need to build a $100,000 business, then it’s an excellent buy. Conversely, if that $37 software is going to need a $500 freelance coder to adapt it to your own needs, then it might be better to buy the more expensive software to begin with.
4. Listen to your gut.
If something feels off about a purchase, listen to your gut. There’s usually a reason you’re not entirely comfortable with a purchase and it’s best to trust your instincts on this one.
This is especially true if the seller is promising you’ll make a nice income simply by pushing buttons or any other claim that is unbelievable.
And in my opinion blind sales letters are a dead giveaway that it’s best not to buy. You know the pitch where they tell you 30 things the product is NOT but they don’t tell you exactly what it IS. Personally, I never, ever consider buying those, even if it’s only just a few bucks.
5. Take your time.
Rushing into a purchase is a surefire way to end up with buyer’s remorse. If you can, take some time to sleep on it before you make your final decision. This will help you be sure you’re happy with your choice.
But there are times when a special deal is only offered for a limited time. If there is a solid guarantee, then go ahead and purchase. Use the guarantee period to test it out and see if it’s right for you. If not, you can always get a refund or cancel the subscription.
This is why I love $1 trial periods, both when I’m buying and I’m selling. When I purchase the use of something for $1 for the first X amount of days, I can take that time to thoroughly explore the product before making my final decision to stick or leave. And when I sell using the $1 trial, my customers get the same benefit and my refund rate is greatly reduced.
By following these tips, you can avoid buyer’s remorse and be confident in your purchase decisions.
Now let’s talk about greatly reducing buyer’s remorse with your own customers…
7 Proven Methods to Reduce Refunds
You open your email and you see SALE, SALE, SALE, REFUND, SALE.
4 sales and 1 refund, and what is it you think about for the rest of the day?
That one @#$% refund.
I hate ‘em.
You hate ‘em.
Let’s use these 7 methods to greatly reduce refunds on our sales.
1: Trial Periods
I mentioned this one earlier. When you give your customers an almost free trial period, they get to try out the product and see if it’s right for them. If not, they can cancel before they are charged the full price.
You might be thinking that if you use the trial period, you’ll get a lot of people who sign up just to see what’s in the member area, download what they can and then split. But whether you offer a trial period or not, you will encounter these people. If you charge a full amount up front then you’ll have to process refunds. By offering the trial, people can simply quit before they are charged the first full amount. No muss and no fuss.
Plus, the number of actual full price sales you make always goes up when you offer the $1 trial. People are more confident spending the $1 admission to see what’s inside, so a lot more people sign up – more people than the amount who will cancel before that first regular payment is made.
2: Major Value
Provide lots of value before, during and after the sale. If you begin the relationship by cultivating a solid foundation of trust, you’ll create not just a one time sale but a regular, loyal customer who purchases repeatedly.
Your customers need to feel you have their best interests at heart. This is why a series of videos in the sales process can be so effective. They can see and hear you, so the feel like they know you. You can impart a great deal of helpful information in those videos, demonstrating that you know what you’re talking about and putting the customer at ease when it comes to buying your products.
3: Set Expectations
Don’t offer false hopes and don’t tell the customer that your product will solve all their problems if it won’t. Focus on how the product will improve their lives, the benefits it will afford them and exactly what they can expect.
If you’re in the online marketing niche and you’re selling a program on how to make money online, let them know it will take work and dedication to make it happen. This way the sales you make will stick because they know in advance what they’ll need to do.
Conversely, those fly by night marketers who offer the sun and the moon for a price and promise to do all the work for the customers will see a refund rate that is out of this world. I’ve heard tell of 50% refund rates and higher. What a nightmare that would be.
4: Send a Thank You
You hopefully already have one or more emails in your autoresponder that thank the customer for each purchase they make.
You may also consider sending thank you gifts as well. For example, it might be a report or cheat sheet that dovetails perfectly with the product but was not advertised as a bonus.
People want to be appreciated, so any time and anywhere you can appreciate them, go ahead and do it. You might even thank them via social media if it’s appropriate.
5: Success Stories
This is optional but a great idea: Send out a series of success stories from people who have purchased and used the product.
“Congrats again on purchasing ABC product. One of your fellow customers just reported that by using ABC, she’s experienced a 40% increase in conversions on her website.” And then tell them more about how she did it.
This reaffirms to your customer that he made a wise decision by investing in your product.
6: Set up a User Group
If you have enough customers to make this work, set up a user group where product purchasers can interact, swap ideas and stories and encourage each other. The camaraderie in an active user group is unbeatable and can virtually guarantee an active customer in the group will not refund because they don’t want to leave the group. Plus, it again reaffirms to them that they made the right decision in purchasing your product.
7: Ask Them to Come to You
Before they purchase, when they purchase and after they purchase, let them know you welcome their feedback and are there to assist them.
This way they are more likely to come to you if there is an issue and give you a chance to solve it before they consider asking for a refund.
And you’ll find that some of your most loyal customers who stick with you for the long haul and tell others how great you are will be the customers who initially had a problem and you solved it for them.