ver the years we’ve gotten numerous questions and requests to address the issue of guarantees, or refund policies and so have decided to write this one up. It seems that many people who have businesses wonder if it is a good idea or not.
First let’s make the simple distinction between a product and service. If you are selling a product, it ought to be guaranteed for workmanship and functionality. Most equipment or hard goods manufacturers or producers offer a replacement in their policy.
As for services, there is the distinction between a service that is easy to identify as being completed, or not, as in hiring someone to wash or detail your car so there is no dirt left on it, and services like seminars, training programs, or even consulting, where it’s left to the user to use the information they have learned, or have been taught or presented, at any rate.
Some companies offer a money back policy if the consumer is not totally satisfied. Without even knowing what is included in this very unspecified verb, or nominalization, as in satisfaction, is anyone really ever TOTALLY satisfied? While this sounds like a wonderful and generous offer and one that demonstrates the strong confidence they have in their products or services, most companies use this as an acceptable loss or marketing expense. Based on our own research in canvassing various suppliers over the years, the standard in the soft services industries, like seminars and consulting, is between 10–12% when the guarantee is offered. So, companies know that at least 10–12% of their customers will ask for their money back when offered. And so guarantee or refund is used more as a marketing tool then a sign of confidence in their products. And they write this off as a cost.
Let’s look at the mind set here and with the example of, let’s say, a seminar company dedicated to helping people get more out of life, more happiness and more success. The simple process of preframing an idea for someone and embedded commands that are so much a part of sale and transformational grammar can be the explanation for why you may not want make that offer. Think about it: if someone knew they could have their money back after going to your program, they wouldn’t be personally and wisely invested in the program, if they don’t have to be, because you’ve given them an out.
A seminar advertisement or a product advertisement that explains well the success and wonders of the product/service allows the customer to focus on that and begin to already experience how good they will feel after attending the seminar, or using the product. Now add in MONEY BACK GUARANTEE! if you ARE NOT SATISFIED! Now, why would you want your customers considering, trying on, and imagining that as a possibility: not being satisfied?
We believe in our products and seminars fully. We have trained, for almost 20 years, thousands upon thousands of students and never offering a money back guarantee, and how many requests have we had for it? How many students were not satisfied? We can count them on one hand over the almost 20 years of training and consulting. Most of them report that they got so much more than their money’s worth. Now the small number of “not satisfieds” includes people who there for different reasons that they did not identify when they came in: expecting therapy, for example, when none was offered, nor advertised.
Our experiences have proven that the 10–12% who would ask, are the people we wouldn’t want to have in a seminar, program, or even as a corporate customer (yes, we have and do turn business away if we don’t think there’s a match). The main reason is because we want people who are open minded, and wanting to succeed, not those looking for an excuse before the events even happen, to not succeed, and for us to take responsibility for their lack of success based on environmental factors outside of our control and within theirs. You’ll know who they are. They usually blame others for their own inadequacies, misfortunes, etc. While we have a special place for them in our hearts, there is no place for them in our seminars or programs. Why would you want them affecting others just because they will never be satisfied, anyway?
I was in the UK recently at an evening chat and was asked a question. I answered the question. The person wasn’t satisfied with my answer. I responded a bit differently and he still was not satisfied. Later, another gentleman (who I later found out was associated with the first person), told me that I hadn’t answered the first person’s question. Almost everyone in the room burst out laughing because they knew I had. I responded to the second person that I had and that the other guy just didn’t like my answers. Now if he has an answer that he’d rather hear, all he had to do was let me know what it was and I would have given him that answer and he would have stopped. I would not have felt as if I was useful in the case of offering “my answer”, but it became quickly obvious that the first guy had another agenda. When I go to a seminar, it’s not to argue with the presenter against what I already think I know. It’s to learn something new. And that’s what I’ll be sorting for as a participant. (Notice the for vs. against pattern).
Simply stated, we want people thinking their decision through to the fullest and making the best decision FOR THEM. That means they think their decisions through before finalizing them. They are savvy enough to ask the right questions, to get the information they want or need, are proactive and have that Go For It Attitude.
Now interesting enough, our programs sell to capacity. Even more interesting is that we then have a room full of people who want to go on the adventure, not whiners, not complainers, and not naysayers. They still have questions, they still come up with some doubts about how they may be able to use the information, but they also then figure it out for themselves!! We still get skeptics and that’s a good thing!! It keeps things lively but still moving in the right direction, as far as we’re concerned. And the bonus? The participants thank us for doing whatever is is we do to keep the whiners out of the seminar because they are tired of it.
When corporate clients ask if we guarantee our work, we ask them if they guarantee their commitment and all their resources and utilization of all the environmental factors that could affect the success of what we’re there to do. Do they guarantee the commitment of all their people? If they could, they wouldn’t be calling on us, would they? They usually have no idea what that means. Together, and with good direction from the top, any program can be as successful, or more, than they thought possible. The difference is that the inside people, the managers, the executives, the directors have the leverage to produce change, not the consultant. I have seen executives destroy a company in a day and turn it around in a month. Raises some questions, doesn’t it?
We know however, that what we teach and what we do is top notch and have proven it over and over again. So, for the person who wants a guarantee and then asks for their money back, these are the same people who would buy music, tapes, CDs, ask for their money back, and still bootleg a copy and sell them on eBay. We have a category for them but that’s for another article.
Another point to consider is that when companies do offer a money back guarantee, how easy do they make it to follow through? I know of several companies who offer it and then don’t give it, making excuses, etc. and the customer usually gives up after a while, or forgets. This says a lot about the company, don’t you think?
So some questions to consider for yourself about whether or not you want to:
- What kind of customer do you want to attract and retain?
- What is your level of confidence in your product or service?
- What is the rate of return for people asking for money backs in your industry?
- What is your reputation in your field or industry? (Many people just don’t know, or think it too highly)
- Are you continuously checking on how satisfied your customers are, anyway?
So it is important to consider what the effect of each and every communication you make with a potential client, written or verbal. The sale not only begins at first contact but the process of them using the product counts, as well. And as we have said before: “The sale is not over until the customer comes back or sends you someone as a customer, as well.”
©2003 La Valle