PreneurCast is a marketing + business podcast. Each week, author and marketer Pete Williams and digital media producer Dom Goucher discuss entrepreneurship, business, internet marketing and productivity.
This week, Pete and Dom talk about “stick” – ways to make sure your clients stick with you, and potentially buy from you again. They discuss things you can do both before and after the sale to ensure your customers are happy with you and your products.
Pete and Dom talk about making sure your clients use your services multiple times
Transcript:
[peekaboo name=”bar” onshow=”Hide it.” onhide=”Read it now.”]
[peekaboo_content name=”bar”]
Episode 061:
Stick
Dom Goucher: Hello everyone and welcome to this week’s edition of PreneurCast with me Dom and him, barely, Pete Williams. How you doing, Pete?
Pete Williams: I’m not too bad. My voice is losing a little bit. It’s not as bad as it has been the last few days, but it’s still a bit Barry White-sensual at the moment.
Dom: There’s a new product there somewhere, I’m sure.
Pete: Yes, absolutely. It’s a bit croaky. I’m not quite sure what’s happened, but producing a lot of content for a lot of different products and consulting gigs and all that sort of stuff. I’ve had to use my vocal cords a lot more than I have been in the previous few weeks, so I guess it’s just shock to the system.
Dom: The perils of being in demand, hey?
Pete: Something like that. Silver lining, I love it.
Dom: So, let’s not hang about too much. Let’s get the content out of you while we still can. Before we jump in, what topic are we going to talk about this week?
Pete: I want to talk about ‘stick’. We touched on that in a very recent episode. It’s worth discussing because stick strategies are important in business and there’s a lot of confusion around the term and negative connotations. I thought it’s worth talking about here on the show.
Dom: We did ask around if anyone could come up with a better word for ‘stick’ but we haven’t got one, so ‘stick’ it is. Can you give us a very brief definition of what you mean by ‘stick’? Just so that everybody’s clear. We like to frame what we’re doing and give it some context. Can you pop everything in a frame for us?
Pete: Absolutely. ‘Stick’ in this context is not the Made to Stick context that the fantastic book by Chip and Dan Heath wrote about making a marketing sticky. This is about stick strategies for reducing refund rates. It’s very, very prominent in direct response, particularly in the direct response information marketing game and anywhere there’s traditional direct response-type selling.
So, teleseminars, direct mail, infomercials, all that sort of stuff where it’s almost like an impulse-type buying decision, stick strategies come into that. But it’s also very important in a lot of businesses to have that ‘stick’ as well for numerous reasons which we can discuss.
Dom: It is really just different methods and techniques that you can use to make sure that people stick with you. That’s where it comes from?
Pete: Absolutely. When we talk about the Preneur Hierarchy, the easiest people to sell to are previous clients. If you really think about it, someone who’s purchased that’s considering refunding for a vast range of reasons, often quite legitimate; so it’s not about trying to get someone who had a legitimate reason to request a refund to stay with you.
But for those people who are on the fence and are thinking about getting a refund, if you can make them stick and actually implement and get value from your product or service, it’s almost like making an additional sale you would have otherwise lost because that revenue would have had to have been given back. It’s sort of like a negative sale, almost.
Dom: That is one of those things that I think some people don’t think about. It’s quite a prevalent issue in this new industry of internet marketing or information product sales where it’s easy for people to refund and return products because it’s just information; it’s just a membership or whatever. I personally think it’s always been important and a lot of people have ignored it. But right now, with that particular industry, it’s really, really important to pay attention to this.
Pete: I think it’s the economy at the moment as well, so it’s applicable to any business. Let’s delve in a little bit. Before we talk about stick strategies, let’s get to the root cause of a lot of refund requests and go through some of the main reasons people ask for refunds. If we can mold our sales funnel in the way we operate to eliminate refunds up front prior to making a sale, obviously is a stick strategy in itself if you look at it that way.
Dom: I love that. You’ve always got that extra perspective on things. It’s absolutely, perfectly logical. Just again, something that people might not have thought about. One of the ways to reduce refunds is on the front end in the first place. I want to hear what you’ve got for that one. Go ahead.
Pete: Obviously, a lot of refunds are due to the overpromise, under-deliver-type situation where the salesperson, the sales message and the marketing communication oversell what you actually deliver. You don’t want to ever overpromise and under-deliver. If you’ve made any statements in your marketing- we’ve spoken a lot about how it’s not about the product, it’s about the marketing; that doesn’t mean you can market crappy products and expect people to stick around and be clients, not only once but multiple times.
You want to make sure that you’ve got a damn good product that matches all your promises, and then really devote to market it effectively. Not oversell, overhype, or overpromise it, but just market it really well. There’s a big distinction there that hopefully people get. You want to make sure that you always under-promise and over-deliver. If you exceed people’s expectations, then that makes a huge difference to the refunds, and people’s enjoyment of the process in dealing with you.
Dom: Very good point. I’ve heard the phrase before, “always under-promise and over-deliver.” It’s a great policy to have, definitely. There was another important point that you made; it’s almost a given, but it’s worth saying, is make sure you start with an awesome product. Make sure that you don’t promise the earth, make sure you deliver on what you promise, and make sure that that thing is up to scratch. That’s going to avoid disappointment. As you say, disappointment is one of those reasons why people refund.
Pete: Exactly right. Another step, or an extension almost, to that first one is: you need to educate to manage expectations. What I mean by that is that if you’re selling, for example, a phone system, there’s a lot of steps involved in the implementation of a phone system sale. Maybe you’re doing some sort of consulting work, there’s obviously a delivery process involved with that. You want to make sure every step of that delivery process is enjoyable and you’re meeting the client’s expectations.
To do that, sometimes you need to educate them and change their expectations in a positive way. We’ve all experienced clients in any business where their expectations are just unrealistic, and that’s just the nature of business. But if you can manage expectations, explain what the process will be, communicate to them all the way through whatever process it is, that’ll actually help them feel like they’re getting a much better service, and again, reduce refund rates.
Dom: Absolutely. We’ve talked about this in various places. We talk about it inside the 7 Levers training. Educating the client during the sale is another way to increase opt-ins and conversions because those people build more trust for you, because of the knowledge that you’ve got and the knowledge you’re conveying. It’s almost like consultative selling, right?
Pete: Exactly right.
Dom: One really interesting thing that fits right in just after what you’ve just said. We’ve talked about a guy called John Carlton a few times. He’s a quite well-known copywriter in the internet space. I saw him speak at a conference we were both at in San Diego a couple of years ago. His entire presentation was great and really interesting, but the first thing he said, the whole room gasped. I just want to bring it up because it’s really relevant.
He said, “The best favor that you can do any potential client is to tell them why they don’t want to buy your product.” The whole room went quiet. I think I was one of the few people that understood what he was trying to say. He went on to explain it. He basically said – and it’s back to your disappointment and overpromising on the point and educating the client. It’s all kind of wrapped up into one. The last thing you want is for somebody to give you money and then find out that what you’ve got isn’t for them. That’s a guaranteed refund.
It’s like them buying some clothes and taking them home and they don’t fit. That’s why we have changing rooms in clothing stores. So that people can try things on; so that when they hand over the money, they’re going to not try to return that garment. It’s the same. And in that marketing and that sales copy, you need to be absolutely clear what they’re getting. You need to educate and manage expectations. One of those reasons is so that they’re absolutely clear that what they’re paying for is really what they think they’re going to get.
Pete: That’s putting in negative qualifiers into your marketing, absolutely.
Dom: There you go with the technical terms, negative qualifiers. I knew there’d be a word for it even if you made it up.
Pete: Trademark, Pete Williams.
Dom: But yeah, negative qualifiers is a nice succinct way of saying it. But basically, “this isn’t for you if…”
Pete: That’s exactly right.
Dom: There’s lots of other ways of doing that, and maybe sometime else we can talk about that. Just the idea of these negative qualifiers, making sure people are absolutely clear what the product is, what they’re going to get, what the service is, what’s going to be delivered, is all another positive way of avoiding that disappointment and avoiding those refunds. We’re still on the front end, and we’re increasing the likelihood of your clients sticking with you.
Pete: Exactly. I think a lot of it is people think every sale is a good sale; and when you don’t have any sales, that’s probably pretty true. Sometimes it’s worth putting these negative qualifiers in place so you don’t get the sale in the first place to avoid all the headaches of the implementation of whatever sort of product or service you’ve got, than deal with all the hassle afterward.
If you think it’s going to be a hassle up front, they’re probably going to be worse after they transact with you because once they’ve given you money, their expectations go up, unjustifiably on a lot of occasions.
Dom: Absolutely. And again, it speaks to the same thing, tell people why they shouldn’t buy your product. It’s all part and parcel of that same thing. But it’s a good and separate point, and you’re absolutely right that people expect a lot. Once they’ve given you their money, they expect quite a lot from you. Any way to weed out those people. It is difficult. Maybe we’ll talk about this, you and I have talked about this before. It’s what I call the ‘$400 problem’.
I’ll leave that out there as an open loop for people. It’s the idea that any sale is a good sale, and it’s absolutely not true. It’s a difficult mindset to get yourself into when you’re not making any sales. But as you progress and grow your business, it’s one of the most powerful realizations that you can make; that some sales are better than others, and some sales are really considerably worse than others. Some people call it fire your C-class clients, as they say.
Weed out the people that cause you trouble. Tim Ferriss talks about it in The 4-Hour Workweek. He reviewed his client base- another big phrase, the 80-20 rule, he realized that less than 20% of his clients were generating more than 80% of his revenue. So overnight, he basically fired 80% of his clients. And his workday and the stress and support costs and everything just went completely. Everything changed overnight.
Everything went positive and all was great and rosy. That’s a big thing to do and it’s quite hard, but in a very simple way. What we’re talking about here is just putting things out there to make sure that you’re attracting the right client, you’re attracting somebody who’s not going to be disappointed, you’re attracting people who aren’t going to cause you trouble down the line.
You’re attracting the right mindset of client, you’re attracting the right level of client, all those different things. It’s all back to the same point, which is ‘stick’, getting people to stick with you. You don’t want a disappointed client, you want a happy client. Whether it’s with a single sale of a single product or whether it’s a long-term client that keeps going back and buying products or services from you. It’s all part and parcel of the same thing.
Pete: Absolutely. Moving on from what you can do prior to making the sale. What can you do after the sale? There’s a lot of stuff that comes up with people, particularly in the information marketing space. I know a good portion of our audience is selling information online and particularly with the guarantees that are very prominent and really do help increase conversions. There’s a lot of people out there who will buy a product, download it, and then request a refund.
It’s ridiculously common in the ClickBank Marketplace. What can you do to avoid that in the information marketing world, which is where stick is really spoken about heavily. Also, we can talk about some strategies for real-world companies as well. From a perspective of information marketing, one of the things is, what you want to try and do is leave some great value for after the jump. What that term means is you want to have something available to people who stick around after the money-back guarantee period.
Whether it’s some of the bonuses or some additional content or a really key bit of the learning, whatever it might be, is given after the jump. So, they can’t get everything unless they go through the money-back guarantee period. The money-back guarantee is all about giving them a good solid entree and main meal. Then the dessert is after the jump.
Dom: That’s a great way of summarizing that. Just to talk to that, one of the most common things that people do after the jump is that they add value to the course in very simple ways like adding extra modalities. For example, after the refund period, maybe they add- the most simple would be- a downloadable version of the course. Like a downloadable version of the videos if it’s a video-based course. Or they offer the videos pre-rendered into audio format or they offer transcripts, or all those things.
I remember being part of a Q&A session once. Somebody said, “Even before you offer the download, people can download it, they’ll take it anyway.” It’s a little bit of a side topic, but this is really important. Being the slightly more technical of the two here, the response I had was great, which was, “Look, if somebody really, really wants to do something, they will.” We’re talking about the general populace, we’re talking about the everyday people here.
You never market to the fringes and you also do not spend 80% of your effort worrying about two percent of the people that are going to buy. Those people that have the technical knowledge to do these things like download a video before you’ve given them a download link, good luck to them. Off you go. But if you spend your effort worrying about those people, you’re not going to be focusing on the quality product delivery to the real client base.
Let’s ignore that and let’s come back to the point, which is a great way to stop reflex refunds is, as you say, adding that extra value after the jump, which is the common term used in the industry. If you have a refund period saying 30 days, after 30 days there’s plenty of things that you can do. You can carry on extending the product, you can offer different modalities, you can offer bonuses, offer downloadable versions, all those different things, for anybody that actually does ‘stick’ and doesn’t refund. It can often be that simple.
Pete: Absolutely. The other element that people need to consider, no matter what business or industry they’re in, is the buyer’s remorse reflex. That happens in every sort of industry. No matter what you’re selling or what you’re doing, people do have that buyer’s remorse. They make an investment, they make a decision, and they suddenly start thinking, “Did I make the right one?” People hate making wrong decisions.
It’s just a natural emotional reaction to making a decision. It happens in every decision on various levels in your life, whether it’s about buying a product, about meeting a girl at a nightclub, picking out a meal at a restaurant. How many people have that food envy? It’s a natural reaction to have that buyer’s remorse, that orderer’s remorse, that whatever-it-is remorse. It’s just a natural part of human nature.
What you want to try and do is, once people have made an educated decision, a smart decision, you’ll have laid all the pros and cons out on the table and done all you need to do in a very ethical manner obviously, that’s pretty straightforward and obvious to do when you’re making a sale and making a pitch. What we want to try and do is reinforce that person, talk to them emotionally, talk to them logically after the fact to reinforce they made the right buy, the right choice.
Because the saying goes, “people buy on emotion and justify with logic.” What you should be doing is, as soon as the sale’s been made, giving some sort of additional supporting information to lock in that sale and reinforce the wise move they made. It’s not about selling past the buy line, it’s about reinforcement after the buy line. There’s a lot of terms and weird stuff going on today, isn’t there?
Dom: Yeah, you’re pulling them all out.
Pete: Selling past the buy line is a sales term for when someone has heard enough information to make a buying decision, and you just keep talking at them. You oversell it and people then just get pissed off by you and go somewhere else because of you, the salesperson and the pitch you made, not because of the offer. That happens all the time. You want to make sure you never sell past the buy line. Once someone gets that buy line, ready to make a decision, take their order, ask them the question and move on.
When you get someone that you think is close to that buy line, make them an offer, a check move. If they say no, keep going, get them closer to the buy line, ask them again. It’s continually doing that so you don’t have to keep talking and talking until I interrupt you to say I’m going to purchase. What I’m talking about with this particular stick strategy is once they have made that decision, filled out the order form, and all that sort of stuff, you’re reinforcing and supporting why they made the correct decision.
Maybe it is a welcome pack that you can leave with the person who is requesting your roof tiling. Maybe it’s an immediate win you can give somebody if what they’ve ordered is a delayed gratification-type event. Maybe they’ve purchased a car, hypothetically, and it’s going to take six weeks to get the car delivered. Obviously, people don’t want to have that buyer’s remorse in that six weeks, and they start seeing other cars on the road.
What can you give that person in the interim to help build up the anticipation and excitement for the product you’re selling them? Maybe it’s movie tickets, maybe it’s some sort of other bonus that can be related directly to the product, or even completely unrelated but something to just reinforce that purchase decision, help with that anticipation, and reduce that buyer’s remorse.
Dom: A very old example of the quick win or the reminder kind of thing- and this could be an apocryphal story, but I heard the story that a luxury car manufacturer was known to send audio recordings of the engine to buyers. When you get to a certain level of luxury car, you have to wait a while because they’re going to build it with care and attention and a lot of hand-tooling.
So there’s a delay. It’s a great example though, isn’t it? You’ve bought something with a delayed gratification, so giving somebody something to remind them, something possibly emotive like that. If you buy a luxury car at a certain level, then one of the things you’re going to have bought it for is the noise that the engine makes when you put your foot down.
Sending that, I think, is a good example. Another thing, and this is something that we do, like with an information product, is a quick, “Hi, hey, everybody. Thanks for buying. We’re really looking forward to working with you. This is an overview of what you’re going to get.” Not selling after the line, but just reiterating that they’ve made a good decision and that they’re going to get what they paid for. And a little bit of the personality thing in there as well.
Pete: Exactly right. That having some personality. I think a bit of a takeaway for this episode (we’ll give it early on today, not at the end) is that if you are doing something in your business, selling a service or something where the delivery and the outcome results are after the actual transaction. What I mean, in retail, the result happens at the actual cash register at the time of transaction.
You pay money, you walk away with the product you’ve purchased. But if you’re in a service-based business or in a product-based business where delivery takes time, you need to make sure you put something in-between that transaction and the delivery of that. Whether it is something to help manage expectations, or something as well reinforce the purchase decision.
Dom: That’s a great tip.
Pete: Something else we also do is surprises. Even during the product delivery, for some of the courses that people invest in with us- I’m kind of letting the cat out of the bag here- we often surprise them with a book that is related to the conversation, or the question they asked on the Q&A, or the topic we spoke about in a particular consulting session. I’ll just send them a book by surprise, which is value adding it. You can class it as a stick strategy because it helps build that relationship so they stick around for future purchases.
As important as stick is to reduce refunds, stick is just as important to get people to come back and purchase from you again and again and again. This is important as part of the 7 Levers- getting people to purchase from you multiple times in a given period of time, increases the profit of a business. It’s not about just making additional offers to people to get them to spend more with you, it’s about building that relationship with then, having them stick around as a lifetime customer.
Dom: Absolutely. I love that. And you were the first person that I came across that did that particular thing where if somebody buys a product from you, especially if it’s an information-based product, so it’s an online thing and there’s nothing really tangible. People love tangible things. They love physical objects. And in this day and age of Amazon, especially if you have Amazon Prime, where you pay a really small flat fee and across the entire year, shipping is free on any number of objects.
Then you’re talking about between $10 and $20 to ship a book. Even with a personalized message, because you can use the gift-wrap option on Amazon. So if somebody buys a non-physical product from you, an information product, pop on Amazon (or even better, get your outsource VA person, give them a spreadsheet with a list of information on it and pop on Amazon), and send out something physical. Send something to them with a little note on it saying, “Hi, thanks for buying.
Thanks for becoming a member of the tribe, the community. Looking forward to seeing you inside the product, looking forward to your feedback. But in the meantime, this is something I think is really relevant to the course or the information or what we talked about. I think you’re going to enjoy it.” It’s just an order of magnitude more personal and it just builds that relationship. It will make you stand out from the crowd. They’re going to know you’ve spent money on them. They’re going to know you didn’t just take their money and walk away.
You’ve taken some of your profits from everything and given it back. All those things go to build that relationship. The reason why we did the 7 Levers, the reason why we talk about it so much is because people think about the first three steps. Get in the traffic, get in the opt-ins and get in the conversion. After they’ve taken that initial money, there’s four more areas of a business that you can use and pull a lever to increase the overall profit of the business.
Getting somebody who’s bought from you once to stick with you and buy from you again is a really big one because that sale is so much easier. Linking back to the Preneur Hierarchy, as well, as you said at the beginning. Those people that are already clients and already have a relationship with you and trust you and follow what you do and say and appreciate it, are more likely and easier to market to and sell another product to than somebody you’ve never met and has never heard of you.
Pete: You’re absolutely right. It’s all about that relationship. It’s so much easier to leverage a relationship with someone you already have contact with than going cold to someone new. You’re absolutely spot-on.
Dom: I can hear your voice starting to tail off. Is there any more big wins we can get out of this?
Pete: I had one more quick thing I wanted to mention as well, in terms of a rule to not offend and abuse your customers. What I mean by this is that once someone has purchased from you, make sure you market and communicate to them completely differently to how you did before they were a customer. If you’ve got a marketing system in place that is sending offers regularly to prospects, that’s fantastic and you’re implementing stuff, which is great.
But once they transact with you, make sure they’re not getting hit with the same sort of messages. You may have some sequence in place, hopefully automated, that continually makes different offers to your prospects until they decide that that offer is right for them and they transact with you. But what happens if someone purchases a package A with you right now and then in three weeks’ time or whatever, during their money-back guarantee period they see an offer that is better for them, different for them?
Whatever it might be, they’re going to want a refund to get that new particular offer that you’ve hit them with. What you need to make sure you do is once they transact with you, they get into a different sales funnel. You should always have a different communication and marketing funnel for clients versus prospects.
Dom: Absolutely. And you can make that as complicated or as straightforward as you want. If you’re using an e-mail autoresponder system, which we recommend; I know personally that one of the ones I use, which is AWeber, has this thing that if somebody joins one particular mailing list, you can tell it to remove them from another. So, if when they buy a product, it triggers them being on a list (which is just one thing, it’s just a standard piece of configuration), you can tell AWeber when they’re entered to that list, they’re pulled off another.
And that’s it. They start getting different messages. Your example was good, that you could offend somebody that’s already bought by giving them a separate different offer. I think it’s even more simple than that. I think it’s back to that relationship thing, that people that buy from you, that have bought from you, are your customers. They’re part of your community, part of your tribe. And you should treat them differently.
You should give them more attention. You should make them feel that they’ve become part of that community, rather than they’ve bought something but they’re still hear the same messages that everybody hears. There’s nothing extra since they bought from you. That, to me, is almost like the first step. Your point is important and very valid, but I think that there’s a slightly different level to it as well.
Pete: Absolutely. Now, I want to finish off with two gray suggestions. Just for some fun.
Dom: Did you say ‘gray’ or great’?
Pete: Gray.
Dom: Oh, go ahead.
Pete: We’re going to be dark.
Dom: Oh, I see.
Pete: Some creative ways of stick that I have seen implemented across the globe in different fashions by different companies.
Dom: I’m getting ready with my ‘sorbet ideas’ to clean the pallet after you’ve started to darken our reputation.
Pete: One way is to- I’ve got to say this nicely without turning too dark- is put a system in place that makes it easier to implement than refund.
Dom: I don’t think that’s gray at all.
Pete: Oh, okay. You’re fundamentally discouraging refunds. You’re putting a system in place to proactively discourage refunds. Some people actually think that’s a bit wrong. What I think you should be doing is give people refunds. There’s no question about that, it’s pretty obvious I think. But, if you can make it easier for people to implement it, so people have an option. I can either refund XYZ and I have to jump these three hurdles, I’ve got to fill out an RMA form, I’ve got to post it here.
Whatever the process is, you can have the moral compass of how many steps and how hard, how discouraging you’re making refunds. But if you can make the choice for someone to implement or refund easier for them to take the implementation and get the result they wanted when they first transacted with you, that they had value of, then the actual result obviously had more value to them than the money in their pocket. Otherwise, they wouldn’t have done that transaction at the time.
That’s how commerce works. You have $100, I have a solution to your problem. I feel that the solution is worth more to me than my $100 is worth to me, so I’m going to swap. That’s what commerce is. If you can make and reinforce to them that implementing and getting that result is easier than getting the refund of that $100, that is a great way to reduce refund rates.
Dom: OK, that definitely needs a little sorbet. I’m not a great fan of even the principle of making refunds difficult. But what I am a great fan of is the positive spin on what you said, which is making it easy to implement. By adding some very simple things to whatever it is that you are selling, you can easily increase or decrease the friction for people that might otherwise go, “I can’t do this. It’s too hard. It’s not what I thought it was,” whatever.
A really simple thing can just be, let’s say you’re selling an information product online and there’s 20 videos. Somebody goes, “Whoa! Hang on a minute! That’s a lot of watching that I’ve got to do. Oh no, it looks hard.” Just make one extra video or a PDF that says, “Hey! Why not start here?” Just give them a little bit of a triage assessment of their problem situation, walk them through assessing where they are right now, and make some suggestions about where they start.
Tell them what the best way to go through the course might be. Things like that to make it easier to use the material. One of the things we’ve talked about with one of our clients is that they were getting refunds on physical objects. They did research. Well done, top marks, they did what we said, which is whenever you’re not sure about something, why not ask. So they asked the clients why they were getting the refunds.
There’s nothing wrong with the product, the product is a top-line product. But it turned out that the instructions for constructing the object were too complex or weren’t sufficient and some people were just literally- part A was ending up in part Z by accident. It looked like a balloon animal instead of whatever it was supposed to be.
They were just getting fed up, putting it all back in the box and sending it back. And by doing that research, they’ve gone ahead and put in place a plan to put their own instructions in the box along with the manufacturer’s instructions. And they’ve got a result. It’s the same thing you just said. It’s making it easier to implement than it is to refund.
Pete: Let me throw you another, and you can clean it up for me.
Dom: I’m just warming up now, I’m getting into this. Go on.
Pete: Increasing the money-back guarantee period at time of refund request. There’s plenty of statistics to say that the longer the money-back guarantee period, the more likely it was going to increase sales, and the more likely it’s going to reduce refund rates. The reason for the statistic, that in itself is not the tactic I’m talking about; but the reason for the result of that is actually a result of human nature. If someone has 12 months to refund something, they’ll buy it.
They may put it on the shelf, whatever it might be, knowing they’ve got 12 months to get the result. And then ‘out of sight, out of mind’ occurs, and they forget about it until after the refund period. The longer the refund period, the more time people think they have to implement, which generally results in less likely to refund straightaway because they don’t have that impulse. It’s like, “Oh, I’ve got 11 months to get this working. I don’t have to do it now, I can worry about it later.”
Whereas, if you purchase something and you only have a three-month money-back guarantee, and something happens in your life that you know you can’t get the result in three months, you’re going to refund straightaway. Because you realize, “I cannot get this done in three months.” But 12 months, a longer period, gives you more scope for implementation. You put it aside, you forget about it. Out of sight, out of mind. What I’ve seen happen to the success of reduced refunds, whether it’s right or wrong, is at the time of refund request, offer the person.
“You’re six weeks into your three month money-back guarantee period. Let me increase that money-back guarantee period for you to nine months so you’ve got plenty more time to continue to test and play with the product and make sure it’s right before you send it back for a full refund. Really get that result.” I’ve seen that work as a way to reduce refund rates. You’re basically offering something to somebody with the hope that the ‘out of sight out of mind’ is going to occur.
Dom: Okay. Again, I like simple things. If it’s a manual intervention thing, if somebody has got to ring you up or come to a shop or do something like that to ask for the refund, then that’s not a bad thing to do. It’s a positive response to a potentially negative situation. It’s a little bit sneaky. Mixing what you just said up with what your previous point was, maybe one way to put a totally positive win-win on the whole situation is to offer the longer refund up front, but to make sure that people give evidence that they had a good go.
We’ve talked about people, we’ve talked about refund reasons, we’ve talked about ‘got the wrong product,’ we’ve talked about product not living up to expectations. We also talked about people that buy and then immediately refund because they’ve downloaded an information product. Or that something happens in their life and they don’t implement, or they just plain don’t implement. A lot of this is already into the realm of same kind of thing which is information products.
This is because it’s is the easiest thing to refund, it’s the biggest problem people face. I’ve seen this a couple of times. People have said, especially with a bigger product that’s got a higher-price ticket, they say there’s a number of systems or tactics involved in this product. If you can show me that you tried and did not get the result or did not get a result after you tried to implement this, I will happily give you a full refund, even 12 months down the line.
That works for everybody because, one: it encourages people to implement; two: if they really did implement, if they really did get their finger out, they really did give it a good go, and it really didn’t work, well fine. They made an effort, they’re not just reflex refunding. They’ve got a genuine issue, they’ve genuinely not got all they wanted, fine. Refund. That’s a genuine refund, and there’s no reason not to give a genuine refund at all.
But at the same time, you’ve extended that refund period, so everybody’s got a good chance to implement. You’re giving everybody a fair chance. You’re adding confidence in the product at the point of sale because you’re giving a long refund. The other thing is, if they don’t implement and it goes and sits on the shelf and they forget, well, then they forget.
Pete: And it’s on them, not you.
Dom: And it’s on them, not you. I think that, to me, is pretty much the most positive version of those two points you just made.
Pete: Well, I’m out. I think my voice has decided to go.
Dom: On its way out. Alright, folks. Hopefully, that was another useful episode for you. I’m going to do a bit of a wrap-up because I’m worried about Pete and his voice. The action step that we talked about, just to remind you, that if there is a delay in the delivery of your product, put something in the transaction to reinforce the purchase decision. The example I gave was a luxury car purchase, and reminding people what the engine might sound like when they buy it.
The other thing is, as Pete said, reduce the friction of implementation. Make sure that it’s easy for people to use the thing, even if you’re selling on a product that somebody else has made. Maybe think about adding your own instructions or your own support for that. That makes it easy for them to get what they need. Look for those opportunities on the front end as well to make sure that the right person is buying the right product.
And don’t be afraid to dissuade people from buying with, as Pete called it, negative qualifications. I’m really glad Pete brought that up because I think there was a bunch of good points in that. Thank you everybody for listening this week. A reminder, by the way, folks. You should have seen over on PreneurMedia.tv, which is the site that hold all of our podcasts, all of the show notes, all of the transcriptions of all the shows, and the download point so you can download the audio file yourself so you don’t have to go to iTunes.
That’s PreneurMedia.tv. Those transcripts are now being done by our supplier, a chap called Matthew, very good chap, very efficient guy. And he’s made an offer to PreneurCast listeners. If you go to GetTranscribed.com, the link’s below in the show notes, don’t panic, and mention PreneurCast, he’ll give you a 25% discount off your first order. And he’s very reasonably priced, anyway. So that’s a super bargain. We use Matthew now for the transcriptions for PreneurCast.
So, if you want to see the kind of work he does, go take a look on PreneurMedia.tv. While you’re over there, please do have a look and leave us a comment if you like what we’re doing, or you can leave a comment on iTunes if you’re listening via iTunes, or send us an e-mail to preneurcast [at] preneurgroup [dot] com. And finally, a little reminder, everybody. Don’t forget, over at 7Levers.com, there’s the home study version of the 7 Levers of Business training course.
If you sign up over at 7Levers.com, you also get access to our Preneur Platinum members community. Pete and I are in there every day directly answering people’s questions as well as you being able to have a discussion with like-minded entrepreneurs. So, pop over and take a look at 7Levers.com. Thanks, everybody, for joining us this week. Pete and I will be back next week. Hopefully, Pete will be over this difficulty with his voice. Either that or I’m going on the Barry White angle and seeing if we can make a product.
Pete: I’ll start learning how to sing.
Dom: You do that. See you next week everybody.
Pete: See you, guys.
[/peekaboo_content]
Links:
Online:
http://www.7levers.com – The 7 Levers of Business Home Study Course is now live. Sign up today and get 2 months free access to our Preneur Platinum private members area.
PreneurCast Episodes:
These previous episodes are talked about in today’s show. If you missed them, go back and listen to them:
PreneurCast Episode 37 – The Preneur Hierarchy
| Never Miss an Episode: Subscribe to the show on iTunes, Stitcher or RSS. Love the Show? Please take a minute to show some love via a comment or review on either iTunes or Stitcher. |
