168: Money back guarantees

"That's so risky. How do you offer a 30-day money back guarantee?"

This question has come at me again and again with Lead Cookie. People are baffled at the idea that we would offer a money back guarantee on a service that can cost up to $1,500 per month.

Yet we have offered it since day one, and it is one of the best things we have done.

Guarantees are powerful for 3 reasons.

  1. They force you to sell only to customers who you can actually help.

  2. They reduce the risk for good buyers and make your sales process easier which increases your sales call conversions.

  3. If you sign good customers as outlined in #1, and they sign due to reduced risk in #2, then the benefits of the money back guarantee will far outweigh the costs of offering it.

At Lead Cookie, we gave a LOT of refunds in our first 6 months. But that was our fault. We didn't know who would work well with our service and who wouldn't.

Today, we give 1-2 refunds per quarter. And it is nearly always our fault for signing a poor-fit customer.

Yet in a given quarter, I will have 10-15 people say, "Well, you guys make it a no-brainer with the money back guarantee so let's do it."

The benefits of a money back guarantee far outweigh the rewards.