In college, I had a credit card that allowed me to get tons of miles for every dollar I spent and every mile flown.
So when it was holiday time and my friends were flying home, I would offer to buy their tickets and they could pay me back. “Hey dude,” I would say, “can I buy your ticket? I get a bunch of miles and you can just pay me back the same amount.”
I thought it was a no-brainer.
Yet fully 100% of the people I pitched — my friends! — refused.
Because they believed there was some “weird scam” going on…or that, somehow, I was getting an edge that they weren’t. When I offered to throw in an extra $20 or pay for dinner, they became even more adamant about not doing the deal. The idea was, “I don’t understand what’s going on here…but something is, and I don’t understand it, and I don’t like it. So no.”
It was a pivotal moment for me, because I learned that free is not enough. In a world of infinite information, “free” is a commodity that’s available everywhere. Indeed, you have to actively market free to show people why it’s valuable.
People are skeptical. And reasonably so — they’ve seen countless “get rich quick” products, or books that claim to deliver the world, but truly suck.
Yet skepticism is not a strategy.
For example, look at this quick chat I had on Twitter yesterday.
@ramit Can you shed some light on Large Group Awareness Training. Several people at work attended a Psi BASIC class and want me to attend.
@sigep311 Why don’t you just go and see how it is?
@ramit Mostly due to the $600 price tag, but I see your point. Have you attended LGA Training in the past for personal growth?
@sigep311 No. They have a guarantee. Take them up on it if you don’t find value
Too many of us believe that when we purchase something, we have to keep it forever — and that it’s almost un-American to return something. That’s complete nonsense. I buy over $50,000 of self-development course, books, ebooks, and conferences every year. And if something isn’t absolutely top-notch, I request a refund.
What’s going on here?
1. Taking the risk to try new things and focusing on VALUE, not COST. Too many idiots focus on saving money on everything, only to realize that it’s pointless to spend $5 on something that doesn’t work if you could spend $10 on something that does.
As a very insightful Hacker News commenter said, “Groupon is amazing, and not very cheap marketing that WORKS, unlike a lot of other not very cheap marketing that does not work.”
2. Being relentless about results. Once you internalize that you’re willing to take risks on products and services that can improve your life, the other side of the equation is that in exchange for your money, they had better deliver results — or you’ll ask for a refund.
And this is where it gets interesting.
To get results, you have to KNOW what you want. For example, if you join my Earn1K program, you know precisely what you should expect: 3 paying clients by the end of the course. If not, request a refund within 60 days — the full length of the course — and I’ll happily send all your money back to you.
However, many people don’t even think about results. They see something shiny with a nice cover, or a great sales page, and say, “I need it!” They don’t connect the product/service with SPECIFIC, MEASURABLE outcomes. As a result, how could they ever request a refund if they don’t even know what the desired results are?
The result is people like the twitter person above, who are afraid to even try things because they can’t fathom requesting a refund…when they don’t even know what they really want.
A truly skilled consumer will have a concrete, specific list of outcomes they want from a product/service. If they don’t achieve them, they know to examine if they actually did what the product/service said (at least 90% of people don’t). If not, DO THEM. If they actually did the required actions and didn’t get the results, request a refund.
One wrinkle: If you find yourself refunding more than 2-3 products/year, it’s probably you, not the products. Your loving American parents won’t tell you that you suck, but I will. Stop buying products/services to solve your problems, and focus on your own beliefs, which usually include (1) limiting beliefs, and (2) lack of discipline/follow through. No product is going to solve your glaring personality flaws. When I find people who think my courses are going to be a magic bullet without putting in any effort, I refund their money, kick them out of my program, and add them to my DNS (“Do Not Sell”) list. GTFO, losers.
But there’s a twist: Using the 30-Day Return-It Method, I buy things and occasionally return them, or cancel my subscription, if they’re not working for me. Of course, I would rather get the results (value) than get a refund (cost). I cover this in depth in my Scrooge Strategy course.
Why Businesses Offer Insane Guarantees
When I’m buying something expensive, I take a couple minutes to look for the return policy. (This is why I tend to default towards retailers I’ve shopped with before — like Amazon or Zappos — because I know they’ll honor returns.)
Understand this: Businesses WANT to offer guarantees because it reduces purchase risk and encourages more sales. They are happy to honor returns if their product is good because they come in so infrequently.
Note the part in italics carefully. The reason I can afford to offer guarantees like I do is that my products are very good. I measure return rates carefully, including studying why each and every cancellation request happens.
Think about that. I’ve heard people say, “That’s crazy. You shouldn’t return something unless it’s seriously defective.” Unless you’re systematically taking advantage of companies, I know this isn’t true. Why? Well…as someone who offers one, I know that I WANT people to take me up on it. In sales parlance, this is called “risk reversal,” which takes the risk off the consumer and puts it squarely on me — which it should be. If my product is great, I have no issues. If it sucks, I go out of business — exactly as it should be.
More than that, I offer a money-back guarantees because I believe in my products and I stand behind them. The guarantee is my way of letting customers how confident I am that my Earn1K course, for example, will help you earn money on the side.
Again: most companies make far more in customer revenue from offering a money-back guarantee than any “loss” they incur in refunding people.
Note that before you start with a new product like this, you should do a few important things:
- Identify products or services that can save or help you earn more time or money. This isn’t intended for jeans and shoes. This technique is for products that help you with time or money.
- Make a SHORT list of things you want to accomplish after 25 days. For example, “I want all my data inside the app” or “I want to have everything set up and be generating 5 invoices/month using it.” Set an alarm on your calendar to do a 20-day check-in. If your 25-day calendar reminder pops up and you haven’t done any of the goals, chances are you’re just not going to do it. Cancel it and move on. If you do this twice in 12 months, stop buying these things and take a hard look in the mirror.
My challenge to you: try 3 things THIS WEEK
I know there are books, courses, or technology you’ve been wanting to try. And I know that 9 times out of 10, those things come with very generous guarantees. So this week, I want you to try THREE of them. Again, this can be anything that will make a positive difference in your life:
- A book about something you’re interested in
- A training course on a skill you want to acquire
- Technology (whether it’s tools, software, etc.) that saves you time or money
You know what these things are. I’d love for you to try three of them this week and set up a system to determine what specific results you want.
Leave a comment to let me know AT LEAST ONE thing you will be trying this week — books, courses, whatever — and what results you want to achieve. Include the cost and why you didn’t try it before now.