How to scam-proof your online business
Last week, the Twitterverse was abuzz about the story of Caroline Calloway: an influencer with more than 830Kfollowers on Instagram.
Recently, Calloway decided to venture into the world of live events. For the price of $165 per head, Calloway offered meetups with her across the United States.
It didn’t take long for the accusations to start coming in:
I’m not particularly interested in litigating the question of whether Calloway herself was running a scam or not. (If you want to get the full download and form an opinion for yourself, you can check it all out here.)
What I AM interested in is the criticism Calloway got, because it touches on a fear a lot of people who are thinking about venturing into the world of online business have:
“What if people think I’m running a scam?”
Online businesses — courses and coaching in particular — are different than most other kinds of businesses out there.
Say you sell handmade jewelry on Etsy, for example. You make the jewelry, the customer pays you, you send the product to them — and then the person gets the item they paid for. End scene.
Like it or not, information products don’t really work like that.
People don’t buy online courses for the courses themselves. They buy them for the information they contain.
That’s what makes online products great: you’re not just giving people more stuff — you’re giving them valuable knowledge that can potentially add real value to their life.
But this is also what makes online products tricky. When you sell people an online product, they expect results.
And if customers are not getting the results they expected to get — or even think there’s the slightest chance that they might not get them — well, that’s when the outcries of “This is a scam!” start to come out of the woodwork.
A lot of the time, accusations that you’re running a scam are just bad-faith trolling from sad, lonely people with too much time on their hands.
But that doesn’t make it any less anxiety-inducing, as a beginning entrepreneur, to think of an accusation like that being hurled your way.
Here’s the good news: there ARE steps you can take as you’re starting and growing your business to insulate yourself from those accusations. In fact, here at GrowthLab, teaching people how to build and launch non-scammy, non-sleazy businesses is kind of our thing.
So let’s talk about the steps that you can take to build trust into your business from the start, so you never have to take the question “Is this a scam?” seriously again.
Step 1: Build real products that solve real problems
The first place that even well-meaning entrepreneurs get tripped up when it comes to creating an online product: jumping the gun on creating a product in the first place.
You discover the world of online entrepreneurship. You’re excited by all the possibilities! You have what you think is a great idea for a product, and so you jump headlong into creating it.
This kind of approach leaves the door wide open to what we can call the “product in search of a problem” dilemma. Here’s how it goes:
- You build a product based on a vague idea of what you think the audience’s problem might be.
- You create a solution to the problem, which is ALSO a sort of best guesstimate of what you think might solve that hypothetical problem you think your maybe-customers might have.
- Now you have a hypothetical product based on a hypothetical problem — and you have to try to sell that Frankenstein’s monster of a creation to actual real-live people.
And this is where the whole thing runs off the rails: when you’re trying to sell this thing you’ve built. Because not only do you have to convince your audience that your product can solve their problem — you have to convince them that they have the problem in the first place.
And, yeah, that is going to feel scammy — to you AND to the customer.
Fortunately, there’s a very simple solution to the “product in search of a problem” dilemma:
Never, ever, EVER guess.
Real, quality online products never rely on guesswork. They’re based on real experience, real expertise, and most importantly, real research into the problems customers actually have, and the solutions that will actually solve those problems.
Helpful link: I don’t just launch a product and pray. Here’s what I do.
Step 2: Test your products before you sell them
A second way that being too quick to launch your product can come back to haunt you: it robs you of the opportunity to make absolutely certain your product works before you start selling to people.
Again, there’s a delightfully simple solution to this problem: Test your products BEFORE you sell them.
By the time you’re selling your product to a broad audience (for example, your email list), you should already have a lineup of raving fans who love your material, have gotten great results from it, and are willing to tell you that.
We put student testimonials front and center on the product page for our online course, Zero to Launch.
If you don’t have that yet… well, this is going to sound a bit harsh, and I’m sorry about that, but — your product probably isn’t that good and you really shouldn’t be unleashing it on an unsuspecting public.
A great way to make sure your product works before you sell it is with a beta test. Here’s how it works:
Step 1: You invite a small group of students to buy the program at a discount, in exchange for giving you feedback about the material.
Step 2: You have your beta testers go through your program and tell you when the material is confusing, or they lose interest.
Step 3: You make adjustments to the material based on the beta testers’ feedback.
Step 4: You collect testimonials from your successful beta testers, and incorporate those into the sales page and other promotional materials when you’re ready to sell the course.
By the time you’ve completed a round or two of beta testing, you’ll have two things:
- A fully tested, vetted program that you know works.
- Rave reviews from satisfied customers, which you can share with prospective customers.
Helpful link: You don’t need a course to have paying students. Here’s how.
Step 3: When you’re not right for somebody, tell them
A few months ago, we launched a course called Double Engine Growth, geared toward entrepreneurs who have hit six figures with their business and are looking to unlock the next stage of growth.
If you see this product and are not making six figures yet, then guess what: this product isn’t for you. And we’re not shy about telling you that, either.
This brings us to tip #3 for scam-proofing your online business: When you think a customer isn’t a good fit for your product, tell them so upfront.
To some people, this might seem counterintuitive, and it flies in the face of a lot of conventional business wisdom out there. Your goal should be to get more customers, right? So what reason could there possibly be for telling someone not to buy your product?
Answer: no reason — except for genuinely caring about people getting value from your products.
At GrowthLab, we’re not shy about telling people when they’re not ready for our products. And yeah, sometimes that means not making a sale that we could have made otherwise — and we’re 1000% okay with that. That’s the cost of doing business in a way we feel good about.
If you’re building a product, and you know there’s a certain group of people who shouldn’t buy it, because they aren’t going to get value out of it or they’re not ready, be upfront about it. Put it in the FAQ section of your sales page. Put it front-and-center in the sales emails you’re sending out.
You’ll feel better. The people you’re NOT selling to will feel better.
And you know who else will feel better? The people you DO sell to.
Step 4: Give refunds. Just do it.
My final tip for building trust into your business: when people ask you for their money back, give it to them.
I’ve watched businesses fight tooth and nail to avoid giving refunds — even in cases where it’s painfully obvious to everyone except the person in charge of the bank account that giving a refund is the right thing to do. Even in cases where, like we talked about in point #3 above, the business probably never should have sold to that person in the first place.
Every time I see this happening, the question I find myself asking is why?
Why insist on keeping money from people who are unhappy and not getting value from your product? What does that say about your confidence in your product? And how do you think it makes those customers feel about your brand — and about you?
That isn’t to say that you should hand out refunds willy nilly to anyone and everyone who asks. You are a business, you are here to make money.
This is where having a clear, sane, fair refund policy comes into play.
Set a timeframe — it could be 30, 60, or 90 days. Let buyers know, upfront, that if they decide within that timeframe that the product isn’t for them, you’ll give them a full money-back guarantee, no questions asked.
All GrowthLab courses come with an ironclad 60-day money-back guarantee.
Having confidence in the quality of your product means not needing to keep money from people who don’t get value from it. Offering a refund shows customers AND potential customers alike: I believe in my product, and I’m willing to put my money where my mouth is.
Helpful link: How to sell in a way that’s not sleazy
You CAN build an online business your customers can trust
So let’s say you’ve built a business that follows all of these steps: You did extensive market research to understand your audience and their problems. You rigorously tested your solution to ensure it delivers results before launching. You’re crystal clear about who you’re for, and who you’re not for, and you have a clear, fair refund policy.
That means you’ll never have to hear the words “This is a scam,” right?
Unfortunately, no. The internet’s going to internet. Trolls are going to troll. The reality is, you probably are still going to get the occasional yahoo whose idea of a good time is to blow up your inbox with criticisms.
But if you do everything in your power to build the best possible product you can — if you control everything you can control, and build trust into your business everywhere you can — you get to respond:
Sorry you feel that way. But here are dozens of satisfied customers who disagree.
Or, if it’s more your style — say nothing at all.
Want to build a business that enables you to live YOUR Rich Life? Get my FREE guide on finding your first profitable idea.