4 Facts Every Marketer Needs to Know About Refunds

by Early To Rise (05/30/2007)

Issue #2055

  • WEALTHY: 5 minutes a month - or less! - to build wealth (Michael Masterson)
  • HEALTHY: The cultural "disease" that’s infecting our kids (Jon Herring)
  • WISE: Frank Crane on trust

ALSO IN THIS ISSUE:

  • Don’t you hate it when a customer asks for her money back? (Bob Bly)
  • Business start-up advice from one of Google’s earliest investors
  • It’s Good to Know… 5 ways to get your grill on
  • Add "polemics" to your vocabulary

== Highly Recommended ==

Looking For a Rat-Race “Escape Plan”?

Q: How do you know when gas prices have spiraled totally out of control?

A: When gas station owners start boycotting their own businesses!

With the national “regular” average price topping $3.25 a gallon, A.P. reports some owners are closing down shop in protest to their own suppliers.

Meanwhile, millions of U.S.A. commuters are paying through the nose just to get to work and back. And paying, and paying…

Sick of spending upwards of $40 to fill the tank? Tired of life passing you by from behind the steering wheel?

Maybe it’s time to think about your “Plan B”.

Maybe it’s time to vow you’re getting out of the rat race, and you’re going to do something about it RIGHT NOW.

Interested? Well here’s your personal Rat Race “Express Escape Plan”.

- Charlie Byrne

A Man With a Plan… but Will It Work?

By Michael Masterson

DB, a two-year ETR subscriber, is a 27-year-old, three-year employee of a Fortune 500 financial services company. The work is fine, he says, but he has a desire to "crack into real estate."

In the past year, while keeping his day job, DB took classes and acquired a real estate license. DB also signed on "with a major real estate brokerage as a referral associate." His idea is to use the referral associate program to learn the business and then branch out on his own. He says he doesn’t have access to sufficient capital to invest/flip properties himself. "My credit is mediocre at best," he says, "and short-term savings are non-existent."

He wants to know if I think he is on the right path - if he can use real estate as a vehicle to "create the freedom to finally enjoy my life and devote my time to charitable work."

The answer to this is easy: Yes.

Real estate is a great way to build wealth, because:

  • It’s simple. You can do well by faithfully following a few basic rules.
  • It’s safely leveragable. If you do follow those basic rules, you can dramatically increase your return on investment (ROI) without significantly increasing your risk.
  • It’s real. My stocks and bonds are ultimately nothing more than promises on slips of paper made by corporations that don’t care about me. My real estate is tangible. I can touch it, live in it, put a fence around it.

Real estate investing is also something I can do on a very part-time basis. Apart from the initial time it takes to assess and buy a property (which, for me, is usually mitigated by having a managing partner), I pay very little attention to it. If it is land that I am "banking," I just pay some minor taxes every year. If it is an apartment complex that I rent out, I spend five minutes once a month reading a management report. If it’s a limited partnership I’ve invested in, I do even less than that. (That’s because I only invest in limited partnerships run by trustworthy friends with long, proven track records.)

If you think the time I invest in real estate is more than you want to spend on a "passive" investment, you may be setting yourself up for trouble. I’m a big believer in a Warren Buffett approach to stock investing (buying quality for cheap and holding onto it). But even that - for me - takes more time than real estate, because the companies I tend to invest in are in a constant state of change and, therefore, more complicated than real estate.

In Nicaragua, I am an active partner in a real estate development project. But aside from that, I have done nothing but passive real estate developing over the past 25 years. And except for three investments I let a partner make that totally broke the basic rules (the rules Justin Ford sets out in Main Street Millionaire), I have never lost money. When I tally up my net worth and see how much of it came from the businesses I’ve owned versus real estate, I find that half came from real estate. Considering the relatively tiny amount of time I spend as a real estate investor, that is impressive.

One last word of caution for DB: Passive real estate investing takes time. Don’t expect to become independently rich in five years. It’s more like a 20-year deal. But if you stick to it, it will make you very comfortable. You’ll be glad you got into it.

And one final bit of encouragement. Real estate prices in the overpriced areas (such as Florida and California) are already dropping and will probably continue to drop (a lot) in the next six to 18 months. So save your cash and get ready to take advantage of some great buying opportunities.

Reader Feedback: "Thank you for an excellent publication."

"I very much enjoy my ‘daily read’ of ETR. I always walk away with a thought or focus for my day. Thank you for an excellent publication."

- Connie Gipple
Chicago, IL

[Ed. Note: How has reading ETR helped you - maybe even changed your life? Send your comments to ReaderFeedback@gmail.com. Include your name and hometown... and we may print your e-mail in a future issue.]

"You may be deceived if you trust too much, but you will live in torment if you do not trust enough."

Frank Crane

4 Facts Every Marketer Needs to Know About Refunds

By Bob Bly

Many marketers, both large and small (and I include myself among the latter) go bonkers when customers return products for a refund.

As BK, an executive with one of the biggest and most famous direct-marketing publishing companies, told me, "Our books contain great information, incredibly valuable. Why should we allow someone to read the book, benefit from all that great content, and then cheat us by sending it back for a refund?"

If you feel the same way, let me share with you a few important facts about refunds:

1. First of all, a refund request doesn’t mean your product is bad or the customer doesn’t like it.

Example: A customer returns your $300 DVD set on investing in foreign currencies. "It actually seems like a great program," the customer says in his refund request. "But after watching it, I’ve decided this isn’t a business I want to get into. It’s just too much work!"

To me, this is a perfectly legitimate - and reasonable - position for a customer to take… don’t you agree? In this case, offering a refund is not only a legal requirement but also eminently fair: Why would you want your customer to be out of pocket $300 for something he can’t use?

2. Offering a refund doesn’t cost you money. It makes you money.

Novice marketers fret about offering a money-back guarantee. "If I do that," they worry, "won’t some customers take advantage of me by profiting from the information in my material… and then returning it?"

Yes, some will. But here’s the thing: Offering a money-back guarantee reduces buyer reluctance and increases buyer confidence… resulting in more orders. In almost every instance, the greater revenues and profits from the increase you get in sales by offering a guarantee is MUCH greater than the small amount of money you lose issuing refunds.

After all, would you buy a product for $30 or $100 or more - sight unseen - without a money-back guarantee? Of course not.

3. Longer guarantees are better than shorter guarantees.

If you are currently offering a 10- or 15-day money-back guarantee, extend it to 30 days. Already offering a 30-day money-back guarantee? Then test a 60- or 90-day money-back guarantee.

The longer guarantee term invariably increases response rates and sales, because it eliminates the concern many buyers have with a short guarantee - specifically, that they will forget to open and try the product… and that by the time they get around to it, the guarantee will have expired and they’ll be stuck with it.

Not only that, the longer guarantee actually reduces refund requests.

Reason: The buyer is in no hurry to evaluate and return the product.

Result: The buyer soon forgets about the guarantee… and whether he actually uses the product or not, he just keeps it.

4. Generous guarantees sell more product than miserly guarantees.

Ever see a guarantee that says you’ll get your money back if the product is returned "in saleable condition"? With a guarantee like that, the prospect worries that if he does return it, you’ll claim it arrived scratched or broken.

Similarly, some sellers of information products offer a money-back guarantee… but only if you offer documented proof that you followed their system and it did not work for you. But what if I get your system, but something comes up and I decide I don’t have time to work through it. Am I stuck with it because I didn’t use it?

The more unconditional your money-back guarantee is, the higher your response rates will be. Conditional guarantees depress orders.

Here’s something interesting to consider…

A year or so ago, I began selling e-books online.

With a hard-copy book, my guarantee is: If you don’t like it, return the book and we will refund your money.

But you can’t really return an e-book. I thought about eliminating the guarantee, but realized that is absurd. Instead, I stress the fact that buyers can get a refund without returning the product.

My standard e-book guarantee reads: "If you are not 100% satisfied for any reason - or for no reason at all - just let me know within 90 days. I’ll refund your $29 payment in full. No questions asked. And you can keep the e-book FREE, with my compliments. That way, you risk nothing."

Result: My refund rate on e-books is lower than for any other information product I sell, including CDs and hard-copy books. In fact, I get virtually no refund requests on e-books, though you could say my guarantee openly invites people to take advantage of me.

My conclusion? Yes, there are a few con artists out there. But most people - especially when you are open and fair with them - are honest and will be fair with you in return.
So follow my advice on refunds. Then watch your sales volume - and profits - soar.
I guarantee it - or your money back!

[Ed. Note: Master copywriter and best-selling author Bob Bly is the editor of ETR's Direct Marketing Masters Edition, a program to help you start your own successful direct-mail business. Sign up for Bob's e-zine, The Direct Response Letter.]

== Highly Recommended ==

A Tale of Two Cities: Bargainville vs. Bubbletown

It was the best of times to buy real estate.  It was the worst of times… While the rest of the world worries about Bubbles, you can see six-figure profits in these hidden markets. They’re beautiful gems sitting at bargain prices, and you’ll only find them clearly revealed by one source… click here and discover your fortune today.

- Justin Ford
Main Street Millionaire

Selling Sickness: Teen Use of Diabetes Drug Triples In 5 Years

By Jon Herring

In ETR #1397, I wrote about how, 30 years ago, the then-head of Merck Pharmaceuticals openly spoke of his desire for his company’s products to be more like chewing gum - so they could "sell to everyone." Now that practically the entire population, young and old, seems to be on some form of prescription drug, his wish is coming true.

And the younger they start, the better Big Pharma likes it. A new study of more than 500,000 young people aged 10 to 19 shows that the use of drugs for insomnia in this age group has doubled since 2002.

Did you get that? Teens and preteens now need prescription pills to go to sleep at night. Perhaps this is somehow related to all the stimulants perfectly healthy kids are taking to combat the fictitious "attention deficit and hyperactivity disorder" (ADHD).

The same study shows that the number of teenage girls taking drugs for Type II diabetes has nearly tripled in just five years.

I don’t have to tell you how dangerous it is to put teenagers, whose bodies and brains are still developing, on long-term medication. Not to mention that our pill-happy culture is indoctrinating them to believe "there is always something wrong with you" and "there is always a pill that can help."

Type II diabetes is a condition related almost entirely to lifestyle choices. In almost every case, it is preventable and reversible. The solution is to engage in consistent physical exercise (high-intensity, brief-duration), to eat a diet rich in protein and healthy fats, and to limit consumption of grains, starches, and sweets.

Not quite as simple as taking a pill, I know. But those pills will never heal the underlying condition. And they are expensive. Tomorrow, you’ll learn that they could also be deadly.

Worth Quoting: Ram Shriram on How to Give Your Start-Up a Fighting Chance

"Setting the DNA of a company starts with the founders, and hiring is the No. 1 pitfall for young ventures. Don’t compromise on quality, verify passion, stay focused on doing one thing really well. The motivation should be to build something of value for the long term."

(Source: Business 2.0)

It’s Good to Know: 5 Ways to Get Your Grill On

If the scent of grilled fish and burgers wafting through your neighborhood over Memorial Day weekend had you hankering for your own barbecue, you might be interested in one of these five mid-sized gas grills:

  • The Weber Genesis E320: At about $700, Consumer Reports gives this grill top scores for evenness of heating, grilling ability, construction, and ease of use.
  • The Vermont Castings Signature Series VCS3507P: Also in the $700 range, this grill ranks slightly behind the Weber Genesis in terms of construction and ease of use.
  • The Blue Ember by Fiesta FG50069-U401: This $450 grill got Consumer Reports’ "Best Buy" ranking. While it earned top scores in the evenness of heating and construction/ease-of-use categories, it fell slightly behind when it came to grilling (its ability to cook fish and chicken on the lowest setting).
  • The Broilmaster P3: This $1,000 grill, the most expensive of the top five, scored high when it came to evenness of heating and grilling ability but less well in the construction/ease-of-use categories.
  • The Char-Broil Commercial Series 463268007: Another Consumer Reports "Best Buy," this $300 grill ranked high in terms of grilling and construction/ease-of-use but not as well in the evenness-of-heating category.

(Source: Consumer Reports)

== Highly Recommended ==

Learn ETR’s Most Exclusive "Insider Secrets" For Coming Out On Top…

Now you can outwit, outmaneuver, outthink, and outsmart all the folks who are putting a crimp in your day-to-day happiness.  I’m talking about life’s little (or sometimes big) annoyances like: overpriced repairmen, family feuds, stock market losses, and relationship problems.

Consider having a team of self-made multi-millionaires pulling for your success all year long, offering you their years of wisdom and experience, and cheering you from the sidelines.

Act now, and a copy of ETR’s latest book, Unscrew Yourself — absolutely FREE!

Word to the Wise: Polemics

"Polemics" (puh-LEM-iks) - from the Greek for "war" - is the art or practice of engaging in a controversial argument, especially one refuting or attacking a specific opinion or doctrine.

Example (as used by Caroline Elkins in a New York Times review of The Door of No Return by William St. Clair): "Sidestepping polemics and refusing to apportion blame, [St. Clair] demonstrates that the trade in slaves involved a web of Europeans and Africans."
 
[Ed. Note: Become a more persuasive writer and speaker ... build your self-confidence and intellect ... increase your attractiveness to others ... just by spending 10 VERY enjoyable minutes a day with ETR's new Words to the Wise CD Library.]

Michael Masterson
Copyright ETR, LLC, 2007

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