I was wasting time online the other day.
(Nothing unusual in that…)
Anyway. I was just about to start working when I came across this juicy discussion on Facebook…
Money-back guarantees. Do they work? Should you have one? How generous should they be? Are you going to be screwed over?
That kind of stuff.
Listen to this guy’s reasons why he doesn’t have one:
– “It encourages people who just want to _try_ my product.”
– “I can’t resell used products to new customers.”
– “I want people to buy my product because they KNOW it’s good not because they think they can just get their money back.”
– “It doesn’t make sense to talk about how good my product works and then afterwards say *but if it doesn’t work, you can get your money back*. I know it works. I want only customers that believe that too.”
– “It encourages my competition to buy under a fake name, learn my techniques and then plagiarize and get a refund.”
All valid reasons… with one BIG flaw: No clue about the psychology of buying.
This guy was all about, “I do not want to lose money, I do not want to be screwed over, I do not trust people.”
The responses he got were spot on, “Dude, you’re wrong. Look at all the 50 years of direct response. The bigger the guarantee, the more sales.”
But he wouldn’t take it. He was convinced money-back guarantees are a no-no.
Yes, you will get returns. Everyone does.
But here’s what this guy is missing:
– The hardest (and most expensive) to get are your first time buyers.
– People have EXTREME inertia parting with their money.
– If there’s only a slight chance of risk, they won’t buy. People need to feel safe to buy.
– People don’t know if your stuff is good, they don’t know if they’ll like it, they want to have a risk free chance of trying it out.
– The longer the guarantee, the less likely people are to return your product. (Buyer’s remorse anymore?)
– It takes WORK to return a product and most people won’t bother.
– People are not out to screw you – they genuinely want to try your stuff.
– The buyer is a buyer is a buyer.
Look at it this way:
Your money-back guarantees are there to make your first time buyers feel safe and trust you.
Once a person buys from you he’ll buy again, and again, and again. (If your product is good. As it should be.)
Wouldn’t you make everything in your power to get happy AND repeat buyers?