The problem with refunds & membership sites

10 years ago

I believe this is just part and parcel of offering a guarantee: Some people will abuse it, but most people won't.

I heard that offering a money back guarantee actually increases sales, and once you weigh these increased sales against the number of refunds you are going to get, you are usually up on the deal.

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wtatlas 10 years ago

The short answer to your first question is that nothing is stopping them. That is what an open guarantee is, i.e. one with no strings attached. In my opinion, however, most people are honest and ethical, and if the information you are providing is of a good enough quality and relevant to what your sales letter promised, then there is no reason why refunds should be high.

You asked how to keep people engaged and continuing their membership. One way is to offer something of high value each month and give your members a teaser about this the month before. The only way they can get the new items is to continue, and pay for, their membership.

One membership model is to have a guarantee that offers a full refund within the first thirty days of membership and then a refund of the current month's membership only after the first month. For example, if a member cancels during their six month of membership, they are refunded the fee for their sixth month only. The previous five months payments are not refundable. Obviously this only works if you are providing new content on a monthly basis. If you have any problems coming up with suitable wording for a guarantee, PM me and I'll send you an example you can use as a guide.

This model also helps to retain members; they can only get the new content, which you give then a teaser for in the previous month, if they keep their membership going.
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barbling

10 years ago

This is one reason why emailed membership sites can work well - ie, people who buy are put on your autoresponder. Whenever a new update emerges, that update is emailed to the customer.

Customer decides to cancel and is automatically removed from the AR.

Have you considered that?

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agmccall 10 years ago

With membership sites you should drip feed the content, not give it all at once. Lance Tamashiro and Robert Plank have a program you might be interested in it is called membership cube. I have not got it yet but it is on my list

al
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vickybabe

10 years ago

Originally Posted by barbling

This is one reason why emailed membership sites can work well - ie, people who buy are put on your autoresponder. Whenever a new update emerges, that update is emailed to the customer.

Customer decides to cancel and is automatically removed from the AR.

Have you considered that?

Fully agree with barb here, the only way to limit getting ripped off is to drip feed, the easiest way to do this is with your autoresponder and a sales page

I actually even created a wso on this, it is really simple to accomplish, you just need a good hosting option, places like box.com will work great

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Luke Dennison

10 years ago

Originally Posted by barbling

This is one reason why emailed membership sites can work well - ie, people who buy are put on your autoresponder. Whenever a new update emerges, that update is emailed to the customer.

Customer decides to cancel and is automatically removed from the AR.

Have you considered that?

Genius. Have you tried this yourself? I think this would be good, and also I think your members would feel like it was more exclusive.

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jamescanz

10 years ago

Originally Posted by gwpmike

1) What is stopping somebody from paying for membership, downloading all the products, and then canceling their membership and/or even asking for a refund so they can get their money back?

This is almost guaranteed to happen, especially if you sell a lot of products.

It's something you shouldn't put much focus on...

Those individuals aren't going to be your long-lasting customers, anyway.

Originally Posted by gwpmike

2)Any other methods besides sequential delivery of the products?

Yea, the drip-feed method is the best solution I can think of.

I use it myself and it works very well.

If they cancel, they automatically get locked out of the membership site.

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ddpromo1

10 years ago

Originally Posted by jamescanz

This is almost guaranteed to happen, especially if you sell a lot of products.

It's something you shouldn't put much focus on...

Those individuals aren't going to be your long-lasting customers, anyway.

Yea, the drip-feed method is the best solution I can think of.

I use it myself and it works very well.

If they cancel, they automatically get locked out of the membership site.

I've heard so many different views on "drip-feeding" content vs "on-demand" content using a dashboard and still confused.

I'm creating a membership site, to include my online courses, I created, which is over 62 videos, plus, documents. Some videos are short, so offering a 'drip-feed' method, say, once-a-day/week, is not enough to keep them active.

One respected IM'er, gives people a choice to buy the whole package, all at once, for a high price, or a lower monthly fee, get full access to the videos/materials. (Everything is protected and streamed through the Cloud services)

So, I'm not sure how I'm going to set this up, with so much content. Sure, they can 'watch' everything in a monthly, but, new content will be generated each month.

Any thoughts, on that model?

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Steve B

10 years ago

Mike,

Drip feeding your content certainly has advantages. I think the best protection for your content, as others have said, is to reward your members with it as they continue with you over time.

Here are two other thoughts that are really elementary and simple, but are also answers to your questions:

1- Provide information and an experience in your community that are so outstanding and value packed that no one serious in the niche would want to miss! There will always be a few serial refunders. Send them on their way as quickly as possible. Don't drop your guarantee or refund policy because of them as your overall sales will suffer more without the policy in place.

2- Membership site models are not necessarily the best way to set things up if you have lots of products but no time sensitivity in what you're offering. A catalog model may fit what you're doing better.

Membership sites thrive when there is time sensitive information that your members are needing such as the latest news, events, gatherings and activities in the niche. In such cases, members stay over time because you can aggregate and alert your audience about this information.

Membership sites are also great for on-going step-by-step processes like learning to play the guitar, learning to paint with water colors, or doing daily guided exercise routines. There is an inherent reason to want to stay in order to get the full benefit of the instruction.

Membership sites are wonderful when the drawing card is members wanting to hang out with other members in a community of like-minded people. If a person wants to socialize they have to stay.

What I'm saying is the membership model is not always the answer. But if what you're offering fits that model, then there will be "built in" reasons why your members will continue with you.

The very best to you,

Steve

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ddpromo1

10 years ago

Originally Posted by Steve B

Mike,

Drip feeding your content certainly has advantages. I think the best protection for your content, as others have said, is to reward your members with it as they continue with you over time.

Here are two other thoughts that are really elementary and simple, but are also answers to your questions:

1- Provide information and an experience in your community that are so outstanding and value packed that no one serious in the niche would want to miss! There will always be a few serial refunders. Send them on their way as quickly as possible. Don't drop your guarantee or refund policy because of them as your overall sales will suffer more without the policy in place.

2- Membership site models are not necessarily the best way to set things up if you have lots of products but no time sensitivity in what you're offering. A catalog model may fit what you're doing better.

Membership sites thrive when there is time sensitive information that your members are needing such as the latest news, events, gatherings and activities in the niche. In such cases, members stay over time because you can aggregate and alert your audience about this information.

Membership sites are also great for on-going step-by-step processes like learning to play the guitar, learning to paint with water colors, or doing daily guided exercise routines. There is an inherent reason to want to stay in order to get the full benefit of the instruction.

Membership sites are wonderful when the drawing card is members wanting to hang out with other members in a community of like-minded people. If a person wants to socialize they have to stay.

What I'm saying is the membership model is not always the answer. But if what you're offering fits that model, then there will be "built in" reasons why your members will continue with you.

The very best to you,

Steve

Thanks Steve!

With as much content I've got, I'll end up sending 4-6 pcs of content a week, for members to digest and learn. Then market the FULL package, with over 'xyz' amounts of content. That'll work!

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Steve B 10 years ago

David and others,

Here's another creative way to handle a membership. This might not be right for everyone, but it can be a creative way to "entice" members to stay longer.

An associate had a membership site that he set up with a finite term and a payment ending date. It ended up being revenue positive for him.

Over time, he tracked his paying members and found that they were staying just under 5 months on average. His membership was $12/month, so he was making roughly $60 per subscriber on average.

He changed his pricing model to give his new subscribers a one-time lifetime membership for $99. If they preferred the monthly payment, he charged $15 per month for 8 months and then the subscriber would become a lifetime member.

Under this new pricing structure, his membership actually increased and his average revenue per subscriber also increased from $60 to either $99 or $120 for the monthly option.

Becoming a lifetime member was motivation to pay the one-time fee or to stay the full term on the monthly plan in order to reach lifetime status.

Some will question the logic of giving lifetime memberships. His reasoning, to me at least, seemed smart. First of all, he was making significantly more, on average per subscriber, than he did before. Second, there was motivation to reach the lifetime status so the member would no longer be paying. Third, his membership included a forum which he wanted to stay active with as many members as possible. Fourth, he reasoned that having subscribers, even though they were non-paying (the lifetime members), he would have an audience in the niche that he could send special "member only" offers on the back end. So he was making money with the lifetime members as his customers for related products.

Like I say, this model may not be right for everyone, but it is at least something to think about.

Good luck to all of you,

Steve
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- ddpromo1 10 years ago
  
  I like that model too, Steve. So he gave All his content, at the time of lifetime payment? Or still gave it out slowly?
  
  DD
  
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  Steve B 10 years ago
  
  Originally Posted by ddpromo1
  
  I like that model too, Steve. So he gave All his content, at the time of lifetime payment? Or still gave it out slowly?DD
  
  No, he didn't like the idea of opening up everything all at once. He simply continued to keep feeding the lifetime members just the same as his monthly paying members. The difference, of course, was that the monthly fees had stopped for the lifetimers (which seemed to be the added incentive for them to want to reach lifetime status).
  
  Your question, however, reminds me of another tactic you can use with this model. I have seen several membership site owners "bundle" previous content that was dripped, say a year or two ago, and sell these packages for a one time fee. So, for instance, you could offer your members 2012's content all bundled together for maybe 1/2 the cost (or less) of a current year's membership.
  
  It's a simple strategy that brings in additional revenue in some niches. It wouldn't work so well for a stock advisory membership site, for instance. It could work well for a site selling unique content like evergreen reports, images, recipes, etc. Does that make sense?
  
  Steve
  
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  ddpromo1 10 years ago
  
  Thanks Steve - You been A BIG Help!
  
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Anne Laidlaw

10 years ago

I was once part of a club that if you cancelled you were no longer allowed to resell any of the products. This is only good if you have resell products and hard to enforce.
You will allways get scammers but most are good people.

Anne L

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zacsmith

10 years ago

Last year I went into a partnership in which wee are are providing content: marketing materials and newsletters, for a monthly membership fee. We faced this same problem.

We decided to not offer an archive of the materials. For the monthly fee, members are entitled to download only that month's materials. Download files are stored on Amazon S3, with the links encoded to expire after 45 days.

This way a new member can't get previous content that older-length members have paid for, and we don't provide months of hard work for the price of a single payment (which often cancels after they sign up and get access).

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Steve King

10 years ago

I try to look at my membership sites in the same way as a DVD/Movie rental. The customer pays a fee and gets access to the content for a month. At the end of the month they can renew (which is set to happen automatically) or they can cancel.

Depending on the type of content, I don't always allow downloading rather I stream the videos and they watch online.

I think I would always have a guarantee and put up with refund requests, because I'm sure I get more sales overall as a result of having a guarantee

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Coby

10 years ago

I have a few membership sites...

Unfortunately there is nothing you can do about this. Some folks will do exactly what you said - join - download what they want - then cancel...

The only thing you can do is use a software (or membership program) that removes them from the membership site once they cancel. Or you can do this manually.

This is just part of running a membership site. Even if you "drip feed" content, some folks will still get some of the content then cancel.

Also, there is not much you can do about folks sharing the content outside of your member's area. All you can really do is keep an eye on the black hat forums and file sharing sites and take action accordingly.

Hope this helps.

Cheers,
Coby

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gwpmike

10 years ago

Wow thank you for all of the advice guys!

Looks like most people have said what I was already going to do, which is drip-feed the products & content instead of giving it all at once. And if somebody decides to cancel their membership, they will be removed from the autoresponder which is delivering the content/products.

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10kaday

10 years ago

yeah, you just to have faith in humanity that not all people are not a holes

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Geeked Labs

10 years ago

Nothing. There is nothing stopping them. Heck they can do that and then upload your product to free torrent sites just to spite you as well.

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brutecky

10 years ago

If people are paying each month you should be offering new content each month.

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MaxGalitsyn

10 years ago

Why would you set up a membership site and allow downloading everything at once?..

What is the reason for them to stay and pay any further?

I guess you have to be ready that some users will intentionally sign up in order to quit as soon as they get all your stuff.

You should probably set up a points system when you award a given number of points for each month of membership. Then you rate each of your products with a number of points which will prevent them downloading all at once but gradually collect points to download products one at a time.

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PinkStar

10 years ago

Canceling and refunds are two different things. If they don't think they want to extend their membership then I don't see a problem with canceling. But if they ask for a refund it has to be for a good reason. If they don't have a good reason then inform the buyer that their creditcard (or what ever they used) will be blacklisted and they will not be able to use it on your site or any other site that shares the same blacklist.
Many people will hesitate to do a refund/chargeback when knowing they will be added to a blacklist.

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Move it along folks, nothing to see here

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Brent Stangel

10 years ago

It's part of the business.

Have you tried testing no refund?

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betterwtveter

10 years ago

I recommend refunds, but you must set your own terms with the refund. Are they asking for a refund for stupid reasons such as saying that they just don't want the product. I rather have people give me an intelligent answer saying that they actually tried the product but then give me a reason why the product did not work for them.

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ItsMikeyC

10 years ago

Online or offline, a 100% money back guarantee will always get you more sales than refunds (unless your product is crap). If you really have faith in your product, make it a 200% money back guarantee with the condition that they demonstrate that they've followed your training and it hasn't worked.

I know a personal trainer that offers $100 to any potential new customer who comes to his free introductory session if they feel he's wasted their time. He's never paid out the $100, and he gets so much business with that guarantee, he charges $500/hour for the customers who can afford him, and flicks the rest to his team!

Spend a few hours on any shopping channel and watch the informercials. Every one will have an irresistible guarantee.

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veroniquef

10 years ago

While there are some dishonest people that will try to steal from you, most won't, consider that a business loss.

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LegendaryGuy1

Banned 10 years ago

You are giving them a reason to quit. You give all our content at once meaning all they have to do is download them and cancel leaving you out of pocket. Instead you should drip feed your content. This means that they only get access to a certain amount of videos and content per day. The next day, they get more and the next day.

This gives them a reason to stay because they want to learn more so will stay another day, week, month etc.

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gearmex

10 years ago

How To Start A Profitable Membership Site Step By Step

Anyone wanting to get in for membership stuff, should read this through, its free anyways

this guy talks business, i have been following his blog since his early days, Good stuff

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cjsewell

10 years ago

Mike, the best way to deal with this is to stop worrying about it.

It's going to happen. You must accept this reality of being in business. People will steal from you.

Take offline businesses, like Walmart or Best Buy, the employees steal all the time. Employee theft is worst than shopplifters.

My point is that the owners of these multi-billion dollar businesses are still making a killing.

Why?

Because most people are honest. You can't worry about the 3% that will steal from you. Focus on the 97% who want to give you money.

Uncle C. J.

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Jassen

10 years ago

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ddpromo1 10 years ago

The membership site I'm building has 3 levels (free, silver, gold), I'm looking for a thread or information, on adding the "extra" content, for higher price levels.

Any suggestions? Interviews? Webinars? Software?
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dougb

10 years ago

refunds are part of the game, there are lots of sleazes that want your products for free.

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The problem with refunds & membership sites

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