Many new business owners ask me, “Should I offer a money-back guarantee? I know it will help sales, but the risk really scares me.” I offer guarantees on everything I sell, but that doesn’t mean you should too. Here are some factors to consider and some ideas to get you started.
A guarantee puts your prospect at ease, giving her no reason NOT to buy or NOT to work with you. After all, if you don’t stand behind your product or service 100%, what are you doing in business?
This is especially true if you’re selling products via the Internet. People at your website don’t have the chance to meet you in person and see that you’re legitimate, so it’s your job to give them complete confidence in buying from you.
With some service-based businesses such as consulting, it may be hard to guarantee your work or your results. (Especially if your clients’ cooperation is required to ensure their success.)
Also, a few turkeys may capitalize on your generosity. For example, my “Boost Business With Your Own E-zine” system was originally an e-book when I launched it a few years ago. It would not be unusual to see a person purchase it, download it, and request a refund 2 minutes later. Obviously they hadn’t even read it yet and they just wanted to get it for free.
But in my experience with Internet info-products, the amount of sales you GAIN from offering a guarantee dramatically outweighs the risk.
Types of Guarantees You Can Offer
Money-Back Guarantee: You promise to give your customer her money back if the product does not work, or if she’s not happy with your products or services.
Satisfaction Guarantee: Pretty much the same thing as the money-back guarantee.
Price-Protection Guarantee: This can mean either locking in a price forever, such as with services that are billed on a recurring basis, or guaranteeing that you have the lowest price anywhere for that particular service or product.
On-time Guarantee: If your clients are always concerned about getting your service or product on time, this is a good one for you.
And these are just a few ideas!
Should You Make it Easy, or Hard?
Some business owners make their customers jump through hoops to get their money back. While I understand not wanting to make it TOO easy to get an instant refund, there are risks. If you make it really hard, your customers may just skip dealing with you and go direct to their credit card company.
I had to do this last year with a company whose seminar I signed up for. After registering for their event, I was scheduled to speak that same week across the country, so there was no way I could attend. My assistant called their office multiple times, but we kept getting the runaround. Finally, after three weeks, I just called my credit card company. They took care of the matter promptly once we filled out a simple form.
This process is called a “chargeback”, which can reflect negatively on the vendor’s merchant account standing as well as result in penalty fees for the vendor. So obviously, as a vendor, you want to avoid chargebacks by making the refund process easy for your customers.
Should There Be a Time Limit?
Setting a time limit is up to you. Common ones are 30 days, 60 days, 90 days, a year, or a lifetime. Some studies show the longer the guarantee, the less returns you’ll get. Why? Customers are more likely to mark their calendar regarding a shorter guarantee. With a longer guarantee, they don’t feel pressured, so many of them forget about it.
Here’s Some Wording You Can Use
Here are some effective phrases that are often used with guarantees:
* risk-free trial
* no hassle
* cancel at any time
* double your money back
* 0rder now, decide later
* 0rder today, make up your mind anytime
* no questions asked
In fact, feel free to copy the guarantee I have on my own sales page for my “Boost Business With Your Own E-zine” system at http://www.ezinequeen.com/tutorial/. I won’t mind at all!