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How Important is Offering A Money Back Guarantee in 2011?

by Mark Pescetti
4 replies
I recently put fingertips to keyboard for a “how to market your alternative health business” type sales letter.

The letter was designed to get prospects signed up for a 2 day seminar that just occurred in the SF bay area.

There were only 75 seats available for the seminar, which made for tremendous natural scarcity.

At the end, I really made a hard-sell on the fact that there wasn’t a money back guarantee and even used it as a selling point…

My client was extremely nervous about this aspect…

…but it really lent itself well to creating that elite feel during the closing moments of the letter.

I painstakingly communicated the tone of the seminar, who would genuinely benefit the most and vividly animated the potential financial rewards for attendees to make certain prospects were insanely informed.

The letter was sent out to a list put together by my client; the 75 spots were sold out (@ about $2,000 a pop) in less than 10 hours.

This got me thinking about the relevance of a money back guarantee these days and if they’re even necessary to make massive sales.

What types of products or services most befit needing a guarantee… in your humble opinion?

Some real life experiences with clients would be stellar…

Cheers,

Mark
#2011 #back #guarantee #important #money #offering
  • Profile picture of the author Peter Gehr
    I think it's instinctive to react to a money back guarantee, and, as you know, it's meant to give the buyer a sense of security.

    However, in your particular scenario, it's interesting how not offering one worked in your favor.

    I personally have purchased relatively cheap offers/products from time to time, only because of the money back guarantee. However, in some cases (outside of the WF), there's no policing of the guarantee, and some of these rip-off artists are aware of that and take advantage of the "no strings attached" nature of the internet and you never see a refund even when it's requested time and again. These shade dwellers lurk in unscrupulous zones, and if we could only get our hands on them...

    Is it possible that because it was a seminar, and a face to face encounter, people were less stressed about a guarantee being that they would be there in person.

    In other words, the mindset was different and therefore a guarantee was not essential to the attendees. Having said that, I'm sure the wording and presentation were critical in achieving that result.

    Just a few thoughts.
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    • Profile picture of the author ewenmack
      Great question.

      I see a straight money back guarantee as a weak after thought
      which has little or no impact on sales.

      When tied to performance and frustration where the whole 'big idea"
      is tied to it, then it makes for a much stronger case.

      My example; In a previous business I owned, I knew the pain points
      from the people dealing with other service providers.

      So I guaranteed they would never experience that with me.

      First it started out as movie tickets, then $100, $200 then $1,000
      payout should the person feel I didn't keep my word.

      A client was worth $750 per year to me, so it made sense for me
      to get as many ideal clients and keep them.

      And it did, because it attracted more clients and it kept me sharp
      in keeping my word.

      Largest national player bought me out.

      Such a simple thing, but grossly overlooked and given lip service to by businesses.

      Next case study; This is from Jay Abraham.
      He tells of a pest control company targeting food manufacturing companies.

      They guaranteed if there happened be any pests show up
      after they had been in and the plant had to be closed,
      then they will pay for loss of earnings.

      They took out huge insurance cover for this.

      They naturally dominated that market in the States they went into.

      Once again, it's about the consequence if the service provider
      doesn't perform and under what conditions they are.

      It's risk reversal with serious bite.

      In your case, appealing to exclusivity and being in the top 5%
      where decisions are based on criteria other than money back
      is in itself a powerful mental cocktail.

      It boils down to working out what is the main appeal
      your target market will respond best to.

      Money back isn't an appeal you want to hang your hat to.

      It however can be used to strengthen the appeal,
      even if you give the reason why one isn't being made.

      Best,
      Ewen
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      • Profile picture of the author Mark Pescetti
        Originally Posted by ewenmack View Post

        It boils down to working out what is the main appeal
        your target market will respond best to.
        Ewen, great response... as usual.

        I have to say though, the more I look at old sales letters and website copy I've done with money back guarantees, the more I believe they're becoming obsolete.

        A client today who hired me to pitch her ebook asked if she should do the money back thing. I explained both sides of the coin.

        In the end, she chose not to do it because her mindset is that people need to be held accountable for their decisions... Kind of woo woo for a lot of people on this forum. I can't disagree though, especially when the sales letter authentically communicates the very real value people receive when they buy.

        I think that's part of the problem: too many pitches out there selling crap.

        When I played with Clickbank for a few months (5 years ago), I was initially amazed at how many people DID ask for their money back.

        When I thought about it more and really put myself in their shoes, they were sold on something that very often didn't do the sales letter justice. In other words, the product sucked.

        Maybe people who are all about offering the security that a money back guarantees their customers are just insecure about their offering?

        Funny, the top thread on the copywriting forum right now is 7 Tips for a High Converting Sales Letter.

        "#7 - Offer a strong guarantee. In order to remove any remaining barriers between you and your potential customer, you have to offer a strong guarantee. The clients must know that there is no risk in making a buying decision." - from the said post.

        If there are any barriers between inspiring the prospect to buy at the end of the letter, it didn't do its job!
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        • Profile picture of the author ewenmack
          Another aspect of telling why there is no money back guarantee
          is that you use it to weed out people you don't want to deal with.

          Something the young and desperate can't get their head around.

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