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Solo Build It Mastery Lesson
49 - How A Simple Refund Turned Into A Customer Service Debacle...
Hi again and welcome to this lesson. This is a long article, but please read it
through to the end because it contains an important lesson that every business
owner must know and understand if they are to build long term wealth from their
Today we are going to look at a recent experience a friend of mine had when
to get a refund on a product that she thought wasn't satisfactory.
see a classic example of what NOT to do when somebody asks you for a refund on
one of your products.
Ok, let's get into it...
As a business owner, one of the cardinal rules is 'Look after your
customers'. Now your customers aren't always right, in fact, they
are quite often very wrong :-), but you have to look after their needs, after all,
their money pays your bills...
Sure, some of them need firing every now and then to help us keep our sanity,
but for the most part, your job is to nurture and build relationships with
people, don't go out of your way to p*ss them off, and generally deliver
information, education, sometimes entertainment or life lessons, along with the
products and services they need
and want to buy, with the goal of creating customers for life.
The first step in this process is to make sure your customers' first (and
hopefully subsequent) buying
experience is a good one. Then you move first time customers through your sales
process where they buy additional products and services from and through you
forever and ever.
But you've gotta get that first sale right or you will have little chance of
there being a second sale any time soon.
Here's a classic example of what NOT to do when you are confronted with an
unsatisfied customer wanting a refund.
Kim (not her real name, but the story is 100% true and as told to me) ordered an ebook from a fairly well known (in
circles) options trader last week to check out what he was offering. Now this
ebook costs $110, so it's not some cheap $27 read.
She read through the sales letter and prominently displayed is his guarantee -
here's exactly what it says...
12 Month Money Back Guarantee!
10 TIMES your investment in Profits, or a 100% Refund!
We give you an IRON CLAD Money Back Guarantee - If you purchase these amazing strategies and for some reason you don't make more than 10 times your investment of $99 back in profits, we will refund the purchase price in full!
That's right - Make 1000% on your initial investment, or we'll give you a 100% refund!
How can we possibly do this? Well, we know these strategies work. We know you can make them work for you (once you know them). There is only one condition - that you put them into action the way we teach you and follow our rules - if you do that we are certain you can make lots of money.
Risk free, right? Iron Clad Money Back Guarantee, OK?
I won't go into all the gory details, but let's just say that she was very disappointed
with the content of the book - it was reasonably well written but contained
nothing in the way of new information that Kim hadn't read in half a dozen other entry
level books on options trading, plus it had a LOT of filler and fluff in it's 60
In fact, according to Kim, the book contains just enough information for beginner readers to
get themselves into a lot of trouble in the options market.
After reading the book she was dismayed that she had paid so much for what was
obviously nothing more that one options strategy sort-of half way explained, a couple of Camtasia
videos and a lot of filler material.
She certainly didn't think it was value for money at $110.
main product this guy offers is a trading alert service that tells subscribers every
time he takes a trade so they can follow along with their own money in real time if
they choose to.
The top level alert service costs US$125 per month (US$1500 per year), and
the other thing that annoyed Kim was the only way you could access this service
was if you had previously purchased his overpriced ebook.
The goal of the ebook is to obviously give people enough information to come
to the conclusion that they need the monthly service to trade. Great idea, if it
By now Kim's thinking, nah, this one's not for me, so she sent a short email asking for a refund, saying that the book was not
for her, and thought nothing more of it.
Imagine Kim's surprise when she received this email back shortly afterwards -
Sorry Kym, but currently you don't qualify for
a refund. You have to show us that you tried the system by taking actual trades
in the market and it didn't work for you.
This is clearly spelled out in our Guarantee
Policy on the website.
Kim thought about it, re-read the guarantee, and fired off another email
explaining in detail what she thought of the book and demanding a refund.
She received a reply a short time later from the options trader himself (I'm
thinking is that really the best use of his time??) giving her the third degree,
accusing her of ripping him off, and carrying on with all sorts of other
ramblings about her needing a mindset change and other crap.
Well she told me you could have knocked her over with a feather...
Bottom Line: To get her $110 back, Kim has to risk thousands of dollars of her capital to the
vagaries of the market based on the limited amount of basic information in the
book and test the strategy an unknown number of times to qualify.
There are lots of things that can potentially go very
expensively wrong in the options market - bad fills from the Broker,
making mistakes in the order, market crashes, company specific problems, and all
sorts of unknown risks...
And Brokerage on each trade costs $120 or more (more than the cost of the
ebook) as well, so that's another expense.
Testing the strategies could quite possibly have cost
Kim several thousand dollars...to get a refund on a $160 ebook. Yeah right!
Now come in closely here and listen up, because this is important.
Most business owners are too afraid to offer a 'real' guarantee, a guarantee
with some balls!
I see this all the time. Great offers or guarantees ruined by cheesy weasel
out clauses. You've gotta get this right. Either offer a great guarantee or don't. Stand
by your product, or don't.
And if you can't offer a kick-butt guarantee on the products you're selling
now, stop selling junk and start offering your customers products that you can
offer a great guarantee on.
The goodwill you'll destroy by making a crappy non-guarantee like the one above will
cripple your business.
Want an example of a guarantee with teeth?
Here's the guarantee I offer for my coaching program...
"Put My Money Where My Mouth Is,
100% Satisfaction Guarantee"
I want you to be absolutely delighted with what you are about to
learn, so here's the deal...
If 60 days after you join the Solo Build It Mastery Coaching
you’ve read through all of the lessons, watched all of the Camtasia screen
capture videos, and listened to the audios… you know how to build and set up
and monetize Solo Build It websites perfectly … and everything else you'll
… If at the end of that 2 months, you feel in any way that you
have been misled … or you haven’t learned what you needed to know to get the
absolute best out of Solo Build It … and you don’t think that you could earn
a great living from applying what you’ve learned from this training course, this is what I want you to do:
Send me an email just before the end of the first 2 months and say,
“I tell you what Rocky, I’m not really sure this has been a good investment
for me.” And without a single question, your investment will be refunded in
full. I’ll happily buy your Solo Build It Mastery Coaching Course back from
you, and you can keep your access to all of the training materials as my
way of thanking you for giving us a try … plus I’ll give you my sincere
apologies for wasting your time.
So your worst case scenario is:
You have 2 full months to discover exactly how to become a top Solo Build It website owner and have the opportunity of earning a living online doing
something you’ve dreamed about doing for so long OR you get to keep the
training materials and I’ll send you a full, immediate refund.
Is that fair? It truly shows that we are damned serious about
helping you to make it with Solo Build It, doesn’t it?
See how this guarantee removes the ALL risk from the buyer and puts it onto me?
Anyone who buys this training course can rest assured that if they don't feel
that I've over-delivered for any reason, they'll get a full refund.
No ifs, no buts. I'll give them their money back if they aren't delighted.
If people ask for a refund, I damn well give it to them. Now thankfully
it doesn't happen very often, but it's a cost of doing
Factor it into your pricing and get over it!
And by giving a hassle-free refund on a product that isn't suitable to that
person, I leave the door open in the relationship to continue so
that I can offer them something else
in the future. I can even upsell or cross-sell them to something else right on
How To Stop 70%
Of Your Refunds Or
Turn Them Into Upsells Instead...
Ok, you've seen a weasel-our clause guarantee and a great
guarantee. Let's now look at how your refunds should be handled.
There are three important questions that will turn around nearly
all of your potential refunds.
Question 1 - What happened?
Question 2 - What should have happened?
Question 3 - What do I have to do to
make this right?
In the case of the ebook I mentioned above, here's what should have happened
following this formula...
Question 1 - What
Kim's answer - I felt the ebook wasn't right for me, it's too
basic, and I don't think I should have to buy the ebook in order to get access
to the Trading Alerts Service.
Question 2 - What should have
Kim's answer - Well I'd like a refund for starters.
Question 2 - What do I have to do to
make this right?
Kim's answer - Well give me my money back for the ebook and
I'll join the trading room for a trial period to see how it goes.
Final offer - That sounds fair. What would you say if I gave you
a full refund on the ebook since you already know the strategy, and gave you one
months complementary access to the Trading Alert Service as my way of saying
thanks for giving the ebook a try?
Then after the first month, if you want to stay a member and
continue to benefit from the trading alerts service, all it will cost you is the $125 a month. If
it's not for you, just let me know anytime up to 30 days from now and you won't
be billed, ever.
How does that sound?
See how this sad situation could have been easily turned around? A
potential refund could have been turned into a residual income stream of $125 a
month - that's $1500 a year!
Plus this trading educator offers seminars, high end personal coaching and other
training products as well which could have massively increased the lifetime
value of this particular customer.
consider the wider implications of this ebook debacle
As many of you know, I love Stock and Option trading, and I'm currently
working on a website Joint Venture with a prominent US based trader which is
Over the next few months and years we will be generating thousands of people
to our site every month who are very interested in trading in all it's forms, as well as
other private investors, collectors, brokers, dealers and institutional investors.
Many of these people won't be candidates for our trading system and
methodology, but they
will certainly be interested in other facets of trading markets (Stocks,
Options, Gold, Collectables, Commodities, etc.)
As part of my role as Marketing Partner, I have to screen
potential Joint Venture partners who will share in this excess lead flow of people who aren't
interested in our trading methodology, but who are interested in learning how to
trade these other
We'll be setting up JV or affiliate arrangements with these other training providers and either sell the leads to them or share in the revenue each client
generates for them.
One way I've been doing this is to check out customer service and refund
Obviously I don't want our high value clients to have a bad experience
when they deal with one of our affiliate partners, so I have to check them out
before I approach them.
Having heard Kim's story, do you think I'll be approaching this options
become one of our preferred partners?
I think not...
First up, the initial product, his Ebook, isn't up to scratch, so we wouldn't
want to recommend a product to our clients that we didn't like anyway.
But assuming he fixed that up and we had decided to work with him, how much has this little episode cost him.
Well he's saved himself $110 by NOT
refunding the ebook for Kim.
Now let's say that through our trading Joint Venture, we sent 500
visitors a month to our guru's website. And let's assume that 2% of them buy the
ebook and just 1% join his Trading Alert System.
That's 10 ebook sales (US$1000) plus 5 members joining the
Trading Alerts service (US$625 a month).
If these people stay for just 1 year, that's an added US$8500
revenue that he wouldn't have ever had...and that's just for one month.
What about over 12 months? That's over 100 Grand in lost revenue
because of stupid handling of a refund.
And that doesn't even consider the fact that many of these
people will buy additional products and services as well over that period of
Can you see how important it is to respect the people who
purchase your products and services?
You just never know who's testing you out,
or who's lurking on your list, or who's a potential gold mine Joint Venture
partner just waiting to be
Give a powerful, no quibble-out-clause guarantee and stand by it
no matter what
Factor in a 2% to 4%
refund rate and accept that some people will not be happy with your product
(and some will just rip you off and get a refund no matter how good it is -
refunds are just a cost of doing business)
If you take
rejection personally, have somebody else handle your refunds for you so you
don't have to deal with them
Treat everyone you come into contact with respect and
compassion - you never know who's watching :-) A potential Joint Venture
partner or investor could be sizing you up for something big...
transaction as just one of many that each customer will do with you - be
careful to nurture the relationship you have with every person you deal with
somebody has asked for a refund for one product, it doesn't mean they won't
buy from you again...as long as you keep the relationship alive
If you find you have
'serial refunders' who get their money back on three or four products, kick
them off your list because they aren't serious and are just wasting your
time and energy
I sincerely hope this lesson has opened your eyes to the
potential of how a simple refund, handled badly, can make a huge
dent in your potential long term income.
Imagine how many
other people this refund policy has ticked off. And how many people these ticked
off people have told who will never deal with him either.
The 'Butterfly Effect' or flow-on consequences of this short
sighted, stupid 'Non-Guarantee' thinking over a hundred and ten dollar
product will ultimately cost him millions...
bad, but that's business. Something to think about...
Until next time,
P.S. And don't forget, if you are
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