Giving customers peace of mind by providing risk-free or money-back guarantees for your services can be an effective way to get a competitive edge. Whether you opt for this strategy should depend on what kinds of offers are commonplace in your industry.
If most competitors offer such conditions, it would pay off if you incorporate this strategy as well. On the flip side, customers can exploit it by simply exercising their rights and causing a nuisance to your cash flow! Ultimately, it comes down to making the right decision that makes sense based on where and how you’re selling products/services.
Risk-Free for the Service Industry
Customers love risk-free or money-back guarantee offers. So, if you are selling products or tangible goods, it makes sense to offer money-back to reduce consumer risks if it fails to deliver its function.
But what if you are selling services?
It is often impractical to refund money to customers if you’ve already rendered services (unless you failed to deliver the agreed outcomes or breaches industry standards)
The solution is that it depends on your type of industry. Some service providers offer a 7-14-30 days termination clause, while other industry such as Legal, Accountants, and Architects services doesn’t have such common practice for their customers. It is a matter of executive decision and whether it would work for your business. Overall, a money-back guarantee is good to have but is not mandatory.
Alternatively, you could offer a low-price service to get your customers to try you out. If the business relationship doesn’t work out, there are no hard feelings about it. Regardless of your decision to offer a money-back or risk-free Offer, we suggest you implement some form of conditions to lower buyer’s risk.
Best Practice When Offering Money-Back Guarantee
Firstly, make sure to clearly define what the money-back entails – this could include a 7-14-30 day cancellation period, or no obligation to keep the product after the trial period or a complete money-back guarantee if results cannot be achieved – so that there is no confusion about what is expected from both parties. Also, ensure that the terms and conditions surrounding the money-back guarantee are clear and easy to understand as well as reasonable time frames for refunds/returns.
Ultimately, it comes down to making decisions that make sense based on where and how you’re selling products/services. If you are selling products or tangible goods, it makes sense to offer a money-back guarantee to reduce consumer risks. On the other hand, if you are selling services, it may be beneficial to offer a risk-free trial. To learn more about giving your customers peace of mind, join our mastermind group and access our exclusive resources.