Q: I am wondering if LERN has any data on the effectiveness of “100% Satisfaction Guarantee” offerings. Does this really help increase registrations. Does it also increase refund requests. Does it all balance out in the end or is there a net gain?
Any information that you can provide me on this will be helpful.
A: Below are two research studies and one article on the efficacy of money-back guarantees. The general consensus is that money-back guarantees have a positive impact on consumer behavior by reducing risk, increasing product credibility and that people may be willing to try something new or or even pay more if they have the "insurance" of a moneyback guarantee.
I have not found much research on the incidence of abuse of such policies. However, In our experience at LERN, there is minimal abuse, and programs offering guarantees do not experience a huge demand for refunds. In fact, if there are a lot of refund requests, it should be a red flag that there is something that needs to be addressed in terms of the quality of a course or process. In general, satisfied customers just don't ask for their money back, and often even dissatisfied customers do not. The level of dissatisfaction has to be very high--or the cost of the product needs to be very high along with the dissatisfaction in order to result in a refund request.
Also, you do not need to provide a money-back guarantee. A voucher for a future course is a good option and has the advantage of getting the person to come back and give you another shot. Some organizations even give a voucher plus, which is a voucher for the value of the course they took and an additional voucher--to exceed expectations.
http://www.hostway.com/web-resources/no-category/pros-and-cons-of-a-money-back-guarantee/
https://lern.zendesk.com/attachments/token/0krSB33gdz3GFFr8z9tzmuMgV/?name=kb16015_2.pdf
https://lern.zendesk.com/attachments/token/4kZJkQKZXv5Rrn6A5N0LbMO5Y/?name=kb16015_1.pdf