You may have heard adding information products (or info-products) to your service business is a smart business decision. And indeed it is. There are many benefits to selling information products as part of your business.
However, there is a dirty little secret around selling info-products. The dreaded refunds.
You see, when what you’re mainly selling services, you rarely run into refund situations. You may run into other challenges with getting paid but not refunds.
But, unfortunately, the unpleasant reality is refunds and info-products go hand-in-hand. And when you’re first confronted with this, it can throw a lot of entrepreneurs for a loop. Even if you know intellectually you’ll get a refund here and there, emotionally it’s a much tougher pill to swallow. And what I’ve found ends up happening is people create “stories” around refunds that simply aren’t true.
So let’s take a moment and talk about refunds and bring this dirty little secret into the light.
First, let’s talk about what’s considered normal. A normal refund rate is 10%. And, in fact if you’re Dan Kennedy, you’ll go as far to say if you DON’T have a 10% refund rate you aren’t selling enough. (Isn’t that an interesting spin on refunds?)
If your refund rate is higher than that, you may have a positioning problem or you’re selling to the wrong ideal client or you need to implement some stick strategies. (Note I didn’t say your problem is the product is bad.)
So let’s assume your refund rate is at or below normal. Now let’s look at the top 4 reasons why people ask for refunds.
1. The product isn’t right for them. Read that again. The product isn’t right for them. NOT that the product is bad. This is where a lot of the “stories” come in —
entrepreneurs spend so much time and energy creating an info-product and then when someone returns it, this sends them into a tailspin because they immediately come to conclusion that there’s a problem with the product. If this is something you’re concerned with, I can assure you that your product is fine. How can I know that? Because you ARE worried about it. People who create bad or low-quality products are not at all concerned about the quality.
So why isn’t the product right for them? Perhaps it’s too basic or too advanced for where they’re at right now. Perhaps they’re not your ideal client. Perhaps they read the sales letter wrong and thought something was or wasn’t included and so it didn’t fit their current needs. Whatever it is, it has little to do with you and everything to do with them.
2. They have second thoughts. Again, this has nothing to do with you. Perhaps they run into a cash flow problem. Perhaps their spouse gets angry with them. Whatever it is, they’ve decided the easiest way to fix the situation is to return your product.
3. Something unexpected comes up in their life or business. Things happen. People get into car accidents, spouses get laid off or family members get sick. Whatever it is, it derails them from their current business plans and they have to put things on hold or rethink what they’re doing.
4. They want to take advantage of you. This is a very, very small group but it bears talking about. The reality is there are unpleasant people out there who are looking for ways to get something for nothing. My advice is not to worry about them but know they exist.
So as you can see, it really isn’t about you. It’s about them. Refunds really are just the cost of doing business as an info-marketer and aren’t worth getting upset about.© Copyright 2010 Michele Pariza Wacek (Michele PW)