MBA1199 How To Learn From Cancellations and Refunds

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I'm your host, your coach, your teacher Omar Zenholm. I'm also the co founder of the $100 MBA, a complete business training and community online. And in today's episode you will learn how to learn from cancellations and refunds. No one likes when a customer cancels their account, cancels their subscription or refunds their purchase. This means loss of business. This means lack of revenue. This means lack of profits. But there is a silver lining when this happens. When people cancel their service, when people cancel their contracts, when people refund a purchase. It's an opportunity for you to learn how to improve your product and your service. Most of us cringe at talking to somebody who is unhappy with our product because we know it's not going to feel good. It's not going to feel good hearing bad things about our business, about our product. But it's usually worse in your head than it actually is going to be. Learning from customers that cancel or refund is how your business grows and improves and beats the competition faster. You learn a whole lot more from dissatisfied customers than satisfied ones. People that are happy are happy and they're not going to tell you how to improve. So in today's lesson, I'm going to give you some strategies to show you how you can capitalize on that opportunity. Capitalize on that moment where it may not feel so good. They canceled, they're refunded. But the information they have is gold and you need to seize it. Let me show you how. Let's get into it. Let's get down to business. Whether you have a software company, a subscription service, a coaching program, a membership site, or you sell physical products, cancellations and refunds are a reality you're going to have to deal with. But it's a reality you can learn from tremendously. Full transparency. For a very long time, I avoided trying to learn from canceled customers because I just didn't like to have, you know, that conversation that's very uncomfortable that made me feel bad about my company. But that's a huge sign of immaturity. As an entrepreneur, in order for you to grow, you got to be willing to have that tough conversation. You got to grow some thick skin and it's tough. But what I learned is when you actually go through this process, it's not as bad as I imagined. The conversation you have with the customer is actually harder for them than it is for you. And you got to put them at ease and say, hey, I'm not upset. I just want to learn how I can improve and, and serve you better. So here are a few strategies to do this to learn from those customers. Number one, if you're still starting out, you're new, you don't have a lot of business, you're in the fortunate situation where you can actually get on a phone call with everybody that cancels. This could be a 10 minute phone call. You basically ask them some simple questions like how could we serve you better? What were you looking for when you signed up? Why were you unhappy with the product? What did you like about the product? A 10 minute phone call is going to give you so much information and you're going to document all this information in a Google sheet or a document so you could save it and compile it so you know what steps to take forward with your product, how to improve it, how to change it. Even if you just have one cancellation or one refund a week, you'll have 12 conversations by the end of three months that can really shape a game plan. Now, even if you do have some traction and you do have some customers on offering to have a phone call, a video call, a Skype call, whatever, to a canceled customer is A good idea. Why? Because many people will either just say, hey, I can't get on a call and they'll just reply via email. Some people will ignore it. The point is not everybody that you approach to ask to get on a call are gonna agree. So the numbers are gonna be a lot less than you think. So you can simply create an automated email with your email marketing software saying when somebody cancels, send them this email and say, hey, I would love to jump on a call to learn more about how we can improve the product. It'll take 10 minutes, you know, take a time from my calendar, you can give them your calendar link whether you're using calendly or book like a boss or whatever software you're using to book time on your calendar. Now, like I said, not everybody's going to agree to a call or even acknowledge the email. This is why you are going to use this next tactic. And it's an exit survey. You need to have some sort of way to gather information in a non confrontational way. And this could be as simple as a survey created with a Google form. And you can create five or six questions that are very specific like why did you sign up for our product? Why did you buy our product? Why were you unhappy? What would you like to see in our product? You may want to ask them how they were treated, the customer service or service they had. You may want to ask them about the experience they had when they were buying the product, their checkout process, how they received the product, all that. And of course you can leave a blank box to say any other comments or suggestions. You can add it here. This could be a follow up email. If they don't, you know, sign up for a call with you and allows them to fill out an easy form to give you feedback. And it compiles with, you know, Google forms and you can review on a regular basis. This is a goldmine. You need to look at these results, this feedback every time you sit down and think, hey, how can we improve the product? What should we add to our roadmap? What should we add to our courses or our training or our consulting services? You should take a look at these results at least once a month so it can inform your decisions when it comes to what to do in the future. Third tactic, some companies require for the customer to provide information before they cancel. In order to cancel or to refund, they have to provide some feedback. The reason for this is that sometimes customers buy a product, a service, a membership or whatever and don't really understand what it's able to do. They might say, oh, I want this software to do this. Or, I thought this coaching program would teach me on sales. And that way there are sales modules in the course, but they just don't know where they are. And you can prevent refunds or cancellation if you ask these questions before they ask for a refund or a cancellation. Now, a lot of people don't like this because it makes it difficult for customers to cancel. And some people feel like, hey, maybe that is not a good experience for them. One workaround I saw that Noah Kagan does@Sumo.com is that when you cancel, they say, hey, we'd like to get on a call. Or, you know, can you provide us information? Don't worry, you're not going to be charged. They put a hold on the account so you're not charged your next bill. And if they can work it out, Sumo can work it out and give the customer what they want. Then they resume the billing. So it kind of helps the customer know that, hey, don't worry, we'll still refund you if we're not able to solve it. Fourth, when you're looking at the feedback that you get from cancellations or refunds, one of the things to look for is that question says, what were you looking for when you signed up for this product? And then, why are you disappointed? Why are you refunding? There's going to be a mismatch here. If there is a mismatch, then maybe you need to refine your messaging on your website. Maybe you're giving the impression that your product does XYZ when it really does abc and people are signing up because they want xyz. Maybe you're not niched down enough. Maybe we're not attracting the target audience you're looking for. And maybe you got to change your messaging on your website that way. What I learned is that most people cancel because they just chose the wrong product. It's not a good fit for what they need. And you can prevent disappointment. People can see this as a disappointment or a disappointing experience. So you can prevent disappointment by making sure that you are super clear on your website what your product does, how it can help them, and what results they're gonna get. Having said that and shared all these tactics and tips, you're just gonna get people that are gonna refund because they want their money back. They had buyer's remorse, they changed their mind, or they're tight on cash. This is a reality. People sometimes cancel services and refund purchases because they're tight on cash and they need the money. And it has nothing to do with your product, has nothing to do with the experience they had or the way they were treated, but purely it has to do with their own personal finances. And you'll get that information. You'll understand who those people are with the exit survey.

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To wrap up today's lesson, no one likes cancellations. No one likes refunds. No one likes to disappoint their customers. But it's going to happen. You're not going to create the perfect product or service instantly the first day that you open for business. You have to learn. You have to iterate. You have to change. You have to improve. I mentioned this in a recent episode, but one of my favorite lines in the book the Hard Thing About Hard Things by Ben Horowitz is that sometimes you have to create a bad product to create a good product. Now, it doesn't have to be totally black and white. You can create a good product with some bad features or some things that can be improved. And through those mistakes, you can actually learn how to make a better product. But you're never gonna learn if you never ask why they're unhappy. Why it's a bad why for them it's a bad product. Why for them it's not a must have or great value why they're not committed to that subscription or that membership. There's wisdom in the why. You got to find out why. And that means that in the process of asking your canceled customers, your refunding customers, you have to be gentle on them Be like, hey, we really just love to learn on how to improve. We're not upset. We want to earn your business in the future, and the only way to do that is to be able to improve the product. And we can't do that without your feedback. You'll be helping us a lot. We really appreciate it. Let us know if we can get on a phone call. If you phrase it that way, they're gonna be like, oh, cool, I'm doing them a favor. They're not, you know, upset at me. They're not gonna come and tell me or pressure me into buying it again. A lot of people are afraid of having that conversation because, like, hey, I don't want to have to deal with, you know, pulling out my credit card again. No, put them at ease and let them know that there's no pressure and that they're doing you a favor. Well, that wraps up today's lesson. Thank you so much for listening to the $100 NBA show. Don't forget to hit subscribe on whatever you love to use to listen to. Podcasts, Spotify, Stitcher Radio, Tunein, Apple Podcasts, Overcast, Castbox, it doesn't matter. We're on it all. We're on every single platform. By hitting subscribe, you never miss a beat. Every episode gets added to your playlist automatically, so it's ready for you when you're ready to listen. Before I go, I want to leave you with this. Cancellations and refunds cost you money, so you might as well get something out of it. Get some feedback. See it as like, hey, I need to get feedback, so this is not a total loss for my business. The feedback is worth something. So if you get a refund request or cancellation, see it as like, hey, I'm losing money, but I'll gain information if I ask them some questions on how to improve. All right, I'll check you in. Tomorrow's episode Q and A Wednesday. I'll see you then. Take care.

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