7 Proven Methods to Reduce Refunds
You open your email and you see SALE, SALE, SALE, REFUND, SALE.
4 sales and 1 refund, and what is it you think about for the rest of the day?
That one @#$% refund.
I hate ‘em.
You hate ‘em.
Let’s use these 7 methods to greatly reduce refunds on our sales.
1: Trial Periods
I mentioned this one earlier. When you give your customers an almost free trial period, they get to try out the product and see if it’s right for them. If not, they can cancel before they are charged the full price.
You might be thinking that if you use the trial period, you’ll get a lot of people who sign up just to see what’s in the member area, download what they can and then split. But whether you offer a trial period or not, you will encounter these people. If you charge a full amount up front then you’ll have to process refunds. By offering the trial, people can simply quit before they are charged the first full amount. No muss and no fuss.
Plus, the number of actual full price sales you make always goes up when you offer the $1 trial. People are more confident spending the $1 admission to see what’s inside, so a lot more people sign up – more people than the amount who will cancel before that first regular payment is made.
2: Major Value
Provide lots of value before, during and after the sale. If you begin the relationship by cultivating a solid foundation of trust, you’ll create not just a one time sale but a regular, loyal customer who purchases repeatedly.
Your customers need to feel you have their best interests at heart. This is why a series of videos in the sales process can be so effective. They can see and hear you, so the feel like they know you. You can impart a great deal of helpful information in those videos, demonstrating that you know what you’re talking about and putting the customer at ease when it comes to buying your products.
3: Set Expectations
Don’t offer false hopes and don’t tell the customer that your product will solve all their problems if it won’t. Focus on how the product will improve their lives, the benefits it will afford them and exactly what they can expect.
If you’re in the online marketing niche and you’re selling a program on how to make money online, let them know it will take work and dedication to make it happen. This way the sales you make will stick because they know in advance what they’ll need to do.
Conversely, those fly by night marketers who offer the sun and the moon for a price and promise to do all the work for the customers will see a refund rate that is out of this world. I’ve heard tell of 50% refund rates and higher. What a nightmare that would be.
4: Send a Thank You
You hopefully already have one or more emails in your autoresponder that thank the customer for each purchase they make.
You may also consider sending thank you gifts as well. For example, it might be a report or cheat sheet that dovetails perfectly with the product but was not advertised as a bonus.
People want to be appreciated, so any time and anywhere you can appreciate them, go ahead and do it. You might even thank them via social media if it’s appropriate.
5: Success Stories
This is optional but a great idea: Send out a series of success stories from people who have purchased and used the product.
“Congrats again on purchasing ABC product. One of your fellow customers just reported that by using ABC, she’s experienced a 40% increase in conversions on her website.” And then tell them more about how she did it.
This reaffirms to your customer that he made a wise decision by investing in your product.
6: Set up a User Group
If you have enough customers to make this work, set up a user group where product purchasers can interact, swap ideas and stories and encourage each other. The camaraderie in an active user group is unbeatable and can virtually guarantee an active customer in the group will not refund because they don’t want to leave the group. Plus, it again reaffirms to them that they made the right decision in purchasing your product.
7: Ask Them to Come to You
Before they purchase, when they purchase and after they purchase, let them know you welcome their feedback and are there to assist them.
This way they are more likely to come to you if there is an issue and give you a chance to solve it before they consider asking for a refund.
And you’ll find that some of your most loyal customers who stick with you for the long haul and tell others how great you are will be the customers who initially had a problem and you solved it for them.
