Making the decision to offer a refund to your online program shouldn’t be met with gut-wrenching turmoil, but often it is. The refund and don’t refund debates run pretty hot.
The refund camp sounds like:
+ Not worth the time to argue
+ Don’t need that energy
+ She’s not your ideal client, let her go
And the don’t refund camp sounds like:
+ You’re a small business, take yourself seriously
+ She’s already gained access to the content
+ Your T&C’s say no refunds, so no refunds
My view is to offer the refund – because it’s really good for business – and here’s 5 reasons why…
1. A refund reduces the risk of purchase
What this means is that when your (almost) ideal customer is making the decision to purchase or not, they are going to take into consideration the amount of risk involved in parting with their money. If there is no refund available, and they are not 100% sold on your sales page, the chances of going through with that sale is around 32%.
To help bring this figure down, offer a time-limited refund period so those that believe this might be for them but are not 100% sure, can take the refund within that time frame if they discover that your work isn’t for them.
An additional clause is to get your customers to show their work before you offer a refund to prove they have at least tried, but enforcing this one is completely your call.
2. A refund lets people try your mid – premium content, for free
Along the same lines as above, those that you haven’t yet built a strong know, like or trust relationship with can effectively try your program for free and still get their money back. As a consumer, this is good news.
As a producer you might be struck with the fear that they might download everything and then ask for a refund, effectively paying $0 for all of your hard work. Don’t. There are ways you can protect yourself.
If you are offering a live program (where everyone goes through the lessons at the same time) you’ll most likely have your content drip fed out on a weekly for fortnightly basis, this helps to protect your entire content from being downloaded and then a refund being requested.
If you have an evergreen program where people can enrol any time and all content is ready and waiting for them after payment, make sure that the core lessons and main content are delivered via videos, and you use software like Wistia to protect them from being downloaded.
Good personalised customer support, future program events (live Q&A calls / webinars), surprise bonuses (that are released after the refund period) and exceptional all-round content will also stop people from taking the dine and dash route.
3. A refund is good business practice
Statistically speaking, those that ask for refunds are a very small majority of your overall customer base, so getting your feathers in a fluff because someone doesn’t see the value in your work isn’t personal, its business.
Let me say that again…. its business.
You are running a BUSINESS, and businesses aren’t to be taken personal.
Here’s what I mean. When you go to the shops, say Target, with a refund request and are granted the refund with exceptional service, you’re still likely to purchase from that shop, or at least recommend the product / shop to someone you know that might be a better fit.
But, if you have to jump through hoops, are met with negative energy and feel belittled as if you were personally attacking the efforts of the woman behind the counter – as if she had personally made that product for you by hand – you’ll leave with your refund but most likely never to shop with them again.
Customer service is everything, so focus on those who love your work and let the rest go with a smile… because you’re a great business woman. The ones who love your work will help you spread it.
4. A refund helps you take responsibility for what you market and then provide
I read a study recently where amateur artists were asked to create pieces of art, and then put a financial value on them. Another independent group were told that expert painters had done the work, and asked them to also value it, and the third independent group were art valuation professionals, so they put their expert opinion on the art pieces as well.
Want to know what happened?
The amateurs that created the works of art valued their piece higher than those who thought an expert had done the work, and the professional evaluations. Why? Because when you create something from your own blood, sweat and tears, you become personally attached to it.
Entrepreneurs fall into the same trap. Now, I am not calling you an amateur by any means, but you will without doubt take your work personally, because you love it, and that can lead to overpricing your own work.
Take your own personal attachment into consideration – and try to set it aside – when pricing and marketing your product. Questions you can ask yourself are:
+ What type of customers am I wanting to attract?
+ Is their money mindset healthy, or poor?
+ What are the results they will get from doing the work?
+ How much experience do I have in this industry?
+ What support (if any) do I offer outside of the program?
For more on pricing read my blog post why charging what you are worth is flawed, and what to do instead.
5. A refund can cost you more than the refund itself
So you sell a program that you have priced at $499 and within 2 weeks a customer who has purchased that program, accessed your content, and then changed their mind about it contacts you for a refund and they use an excuse that true or not, you don’t agree with.
I want to say this as kindly as I can without being coming across like I don’t acre…
What you agree with or not is irrelevant.
If you don’t offer a refund and they dispute through PayPal – not only does PayPal freeze those funds – you then have to spend time proving to PayPal that their excuses are false. You also have to protect your brand from being tainted by social media backlash, as well as deal with the stress of the other party involving lawyers. While you’re dealing with this, you’re losing time you could be spending with new paying clients or with the participants in your program.
As producers and personal development junkies we can sit back as convince ourselves that we are doing this person some good by holding them accountable to their promise to themselves, or that we are taking our business seriously by being insensitive hard-asses.
Warren Buffet says it best in his quote… “It takes 20 years to build a reputation and five minutes to ruin it. If you think about that, you’ll do things differently.”
What I want you to do is to ask yourself, is not proving a refund coming from a place of love, or from a place of fear?
So tell me, do you offer a refund after someone to you online program? What conditions do you set, if any? Or do you stand your ground with your solid T&C as your sidekick? I’d love to know in the comments below.
Massive love, happiness and profit,