If there’s anything that absolutely paralyzes someone new or struggling in business, it’s having to hand back money to someone who wants a refund, the money you’ve already spent on things like food and rent. Adding insult to injury, you’ve already given your absolute best to them, and they still want their money back.
You worked hard, and now you have to try to make money appear that you no longer have.
It’s the kinda thing that makes you swear off guarantees. “You pay me; I got your money; that’s the end of the story.”
Unfortunately, that kind of attitude makes it hard for people to want to give you their money in the first place. At the very least, it makes for a very unfriendly atmosphere.
Introducing the conditional guarantee. But, first, let’s talk about guarantees in general.
Hardly Anyone Requests a Refund
It’s just rare that people ask for a refund. It stings when it happens, but thankfully it hardly ever does, and here’s why.
When someone becomes your client, they are rooting for you to be great. In making a significant purchase, they’ve invested a certain amount of money and psychic energy in you—they’ve joined your team.
In the event things don’t go perfectly, they don’t want their money, really. They want the results you offered. They want to feel good about their choice. They’d much rather you made things right than force them to the ultimate last option, which is the refund.
Unscrupulous business folk exploit this by making it really hard psychologically to ask for their money back. For you as a heart-centered person, it just means that you can take a breath knowing why refunds are so rare, and that if something does go south with a client, you’ll have many opportunities to make it right before you have to dig into your bank account.
Side note: Now might be a good time to muse for a few minutes about what kinds of things might go wrong and how you might make it up to the client besides the refund.
Because of this, guarantees are a good bet for the business owner. They create more safety and good will for the potential client, the truth is that if someone is really super upset you’d give them their money back anyway (right?), and when you offer a guarantee, you can set the terms.
Set the terms? That’s right, you can set the terms, which is the first of the two reasons to offer a guarantee.
The Two Types of Guarantees
There are unconditional guarantees, the “no questions asked, you have a bad hair day and decide you want a refund and we honor that.” It’s a good guarantee to offer on lower risk, lower-investment offers.
We offer unconditional guarantees on all of our home study products, because it costs us very little to offer that and it creates big safety for someone knowing they don’t have to justify to us in any way.
Then there are the conditional guarantees. The guarantees with, you know, conditions to them. Meaning you can’t just have a bad hair day, you actually have to meet certain guidelines before the request for a refund is offered.
For high-priced offers or services where you put in a lot of effort and time, conditional guarantees are the way to go. As I said above, you create conditions and that protects you from refunding someone who is just cranky or “out to get you.”
Recently I bought a new kitchen faucet and installed it. Afterwards I realized that our water filter looks like poop next to the new faucet, making us want to install the filter under the sink. This means we need an extra hole in our sink for the faucet filter. Oops.
I had the bright idea to call up the hardware store and ask about their refund/return policy. I could get a different kind of faucet and have an extra hole for the filter. They have a nearly-unconditional guarantee with just one condition—after you install it, it’s yours forever.
Totally fair. I had no bad feelings toward the store for having that policy, and I was just asking to see if they were crazy enough to accept the return of an installed faucet. I bought a new (to us) sink from The Rebuilding Center for twenty-five bucks, and will, God-willing and the creek don’t rise, install it without too many unSufi-like curse words.
But there’s another reason, beyond protecting you, for offering a conditional guarantee for your services.
How Do People Know What It Really Takes?
A really common question for potential clients is, “What will it take for this to work? Is it a magic pill, or how much blood, sweat and nap time do I have to sacrifice to be successful with it?”
Savvy service providers will spell this out somewhere on the sales page, so folks get a realistic view of what’s required. Somehow, though, it really hits home when it’s in the conditional guarantee.
“If you’ve followed through with three out of the four assignments, if you’ve listened to three out of the four classes, and have done the readings, put in a true honest effort and it still hasn’t worked for you, then heck yeah, we’ll refund what you’ve paid us for this course.”
Because you’ve put the conditions in your guarantee, it tells the reader you are serious about the effectiveness of your offer, and you are really clear about what it takes to be successful.
People aren’t dummies, they know there’s no magic pill, much as they might long for one. If you spell out what it takes to be successful in a guarantee, connecting the dots between their financial investment and the effort they need to be responsible for, somehow the whole picture becomes more concrete.
Examples?
Do you offer a guarantee, conditional or otherwise? What great conditional guarantees have you seen? What conditional guarantee could you start offering for your clients?
Share’em below. Let’s help each other ease our worries about refunds and get the message across to clients.
p.s. Do you need a deeper heart connection with your business?
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27 Responses
Well this is a topic that speaks to me! In my Training Program, I used to have a conditional guarantee. One person left early and wanted a pro-rated refund. It felt totally fair, though I was disappointed and wondered where I had gone wrong. But I didn’t berate myself too much.
The one that was difficult was someone I had put on a pedestal (generally not recommended plan of action!), who at first loved the Training Program and wanted conference calls every week instead of every other week. She also wanted to meet with the other students on a regular basis — and I offered the Reiki Center so the group could share Reiki treatments with each other. Right before call 5 of 8 (one month into the three month program), she sent an email saying the program wasn’t working for her and she wanted her money back. Even before her email, I had started to feel a need to change the format of the calls to make them more dynamic. However, nothing I suggested would please her. Things got very entangled because, it turns out, she had already decided absolutely that she wanted her money back — without giving me the opportunity to make things right. It was an awful situation. I did refund the money, of course.
I also changed from a guarantee to a refund policy. They can get out of the whole program up to the end of the first session of the class (I have a weekend class, followed by 8 conference calls). Usually people have four Reiki treatments with me first and then the class. I figure that should give them enough time to know whether they want the full Training Program or not. They are not signing up with someone who is totally unknown to them.
I’ll try this for a while and see how it goes.
Thanks for bringing this up. I look forward to hearing other people’s experiences and thoughts.
Siddheshwari- what a hard experience! And what a way to learn. I like the change you made- I’ll be interested to see how it goes.
Thanks, Mark. It was very painful, because it was someone I really liked — and there is now a rift between us. Sad! I learned a lot, though. I’ll let you know how the new refund policy works.
For my corporate client work – training workshops, hiring assessments & facilitation – I have a 100% guarantee in my agreement that both the client and I sign.
I like it cause it implies/sets the tone – that we both have responsibilities – that we are partnering on the project…
I use language from consulting author Alan Weiss. (His entire contract/proposal is amazing and has made this part of consulting SO MUCH easier. I ahve a template and would be willing to send to anyone who asks – it can also be found in Alan’s consulting books)
Here’s the part of the contract @ Accountabilities – not really a guarantee but seems to cover it…
(BTW-in 7 years I have never had corporate client requests for $$ back…and all engagements have not been perfect…not sure if that is because they are businesses or if I’ve just been lucky or if it has to do with setting the tone @ the entire engagement that says – ‘hey – this is training and you have responsibility in this too…”)
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Joint Accountabilities
Priceless Professional
Hi
I would love to have a copy of that template!
I don’t have T’s & C’s anywhere and neither do I have guarantees so I’m feeling embarrassingly under-prepared for my recent brick wall encounter. A client I’ve consulted with is avoiding me like I’m bringing the black plague. It’s very strange and I think there’re other factors involved but that’s another story. The point is I have nothing to point to to get him to pay up for my work. I know his business is in trouble and that’s why he asked for my help but I put my time & effort in and am stuck. Hoping this wake-up call will still save me(!) but would also like a well-worded (as in softer, not sign-your-life-away-right-now type of feel) contract.
Hey Claudine,
Getting every
Thanks for the encouragement, Susie! (and for the email). This is me going off to tweak and feel stronger about doing my work.
Suzie- I’m so glad you mention that. I sat up and listened when I read that in Alan’s book- never put together a proposal- just repeat the conversation in paper. 🙂 Much more clear.
You know, Claudine- sometimes things just go strange. Having paperwork in place may or may not have fixed it- but you’re right, it would’ve brought a lot more clarity to the situation, and given you a good way to reach through the wall. But still…
Hi Susie, These encouraging thoughts on contracts and guarantees are so relieving to me. I would love a copy of that template as well. I’ve started to have clients pay in advance for some services – especially the ones where I am contracting others to do some of the work. Just so I feel covered. I have the confidentiality agreement but so much of the other stuff is pieced together. I still don’t feel quite solid. And this is really not there – I just haven’t found the middle ground. One person I really admire has just said you know – my time can’t be handed back so there are no refunds. I can’t get my time back so you can’t get your money back. This is for her coaching. For her products I think she does have a guarantee though. What are your thoughts on that in regard to coaching…?
Thank you for all of your input.
Best,
Jennifer
Hi Jennifer- I’m going to weigh on the question you asked Suzie. I think it’s up to your heart, really. We’ve had clients for whom it was right to draw that kind of a strong boundary about not giving refunds. For others, it wasn’t right. It depends on your heart, your personal journey, and such.
For instance, someone who has had a strong personal journey around trying to find sovereignty, care for themselves, overgiving- it might be spiritually helpful to not give refunds in that situation.
For someone else who has found themselves scared of the future, worried about being stolen from, and in general having reactions that trigger a tightness with regards to generosity, offering a guarantee/refund can be a real lightening of the spirit.
No formula, but you do need to ask your heart.
Alan Weiss is so smart, Suzie. And thanks for providing that template. Very cool.
So glad to see you writing about this, Mark!
I’ve never understood why many coaches will offer a free session but not a guarantee – seems completely backward. Thinking about what you want to guarantee can be a great tool for focusing one’s offers.
I’m so with you on that one. I think it’s mainly because business training for coaches, among many other modalities, is often overlooked.
Hey Original Mark,
Back in our wild and crazy Opening the Moneyflow days, you said that a conditional guarantee makes it even more likely that your service will fulfill the client’s need. Keeping within the conditions of the guarantee is a kind of guideline to the client.
In the Opening the Moneyflow course itself, you required (among other things) attendance at 86% of the group sessions to keep the guarantee intact. I’m sure I’m not the only one who maintained that commitment partly to keep the refund option open. Even though I knew I wasn’t going to use it.
Cool.
That is fantastic feedback Mr. Extra Crispy. See, it works. I’m not just making it up. 🙂
Hi Mark,
I’ve made an unconditional promise to myself to comment on every blog post i read! So, it forces me outside my comfort zone, and compels my mind to really process what I read. No guarantees of brilliance though! 😉
I think it’s interesting to consider that a conditional guarantee may actually improve your clients’ success (as evidenced by the comments here, esp. by one extra crispy commenter). Since that’s what you’re really going for, as a heart-based business/service provider, I’d say that’s a good incentive to do the same. I might consider that for my next big project launch.
One other thing off subject which I’ve been thinking a lot about, is what constitutes a good comment! I suppose adding to the conversation is really what it’s about (duh!).
I would say that from the perspective of a buyer, unconditional guarantee or not, what matters most is the feeling of trust and respect for the person you’re buying from. For someone like Danielle LaPorte, who doesn’t offer any money-back guarantee, but manages to do really well regardless on a higher-ticket item (fireStarter Sessions), there’s just this commitment to excellence, and astonishing track record, that backs her up. In her case, the lack of a guarantee may actually boost her sales, because it shows she’s that confident in herself and her work, and you just intrinsically know if it’s right for you, or not….
OK, better get back to work!
– Cheers 🙂
Satya- that’s quite a commitment. Way to go.
I love that you brought up Danielle LaPorte and her lack of guarantee. As I said to Jennifer, it so depends on the individual and what’s right for the business owner. No formula, but asking the heart what’s right for your business and for your journey.
Loving getting to know you.
Hi, Suzie. I’m also interested in that contract template. I thought I had all the elements, and the guarantee still backfired. So I’d like to see the contract in case there is something I missed.
I also appreciate Satya’s comment. It reminds me that whatever guarantee or refund policy I put out there *has* to feel right to me.
Thanks for the conversation.
Siddheshwari
Glad to see you’re a Ray LaMontagne fan, Mark! 🙂
Seriously, though… I have been thinking about offering some workshops based on the Pay What You Can model, and I’ve been wondering about the use of things like guarantees, basic and premium versions, and the like in relationship to this model. Anyone have any thoughts?
mandy
Interesting question. (Er… who is Ray LaMontagne?)
I’m going to throw it back to you- what’s your heart say?
The thing about the Pay What You Can/want model, is that instead of a guarantee- they can just pay nothing. 🙂 My buddy Tad has people pay at the end of the seminar, so they can truly decide after the fact, not before.
Yes, Tad’s model is the one I was referring to. I’m not sure yet if I’ll go that way but I like a lot of what he has to say about it.
Of course… it all comes back to your heart in the end, doesn’t it. 🙂
PS Ray LaMontagne is a musician who just released an awesome album called God Willin’ and the Creek Don’t Rise. If you don’t know of him, you should (everyone should!) http://www.raylamontagne.com
Love this, Mark.
I offer what most folks would consider very high-priced one-hour skype/phone consulting calls on my website. At the end of the info-page, I include this language…
“I
Thanks, Mr. Cookie Monster. 🙂 I love how you set that up- it makes you work harder and give your all, and it makes them pay attention and show up. A great model.
We’re about to start the ‘Turn Your Passion To Profit’ programme (whoop!) & it’s the first service where I’ve specifically offered a conditional guarantee (or ‘No Risk’ Guarantee’). I was nudged in that direction by good old Jason as part of my Heart of Business mentoring with him.
It’s made a big difference – we’re looking like being full & several women have mentioned that the guarantee opened that final “ahh okay it’s safe to commit” door.
So thanks a ton for that.
AND I have one question… At the moment, mine reads “If you fully participate and you
Congrats! Fantastic! And- what number guarantees success? You have to guess- first you have to think of what outcomes you are looking for, then you have to see what is the minimum needed to reach that outcome- or some minimum version of that outcome.
If it’s a new thought for you, you may have to guess and adjust later when you have more information. It’s not a science, for sure.
I’m thinking of adding a conditional guarantee (but word it carefully) to my e commerce store. Because the products are specifically made in the store with print on demand we will honour a refund only under certain circumstances. But we will reserve the right to send a replacement.