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Andy Brice
Successful Software

Doug Nebeker ("Doug")

Jonathan Matthews
Creator of DeepTrawl, CloudTrawl, and LeapDoc

Nicholas Hebb
BreezeTree Software

Bob Walsh
host, Startup Success Podcast author of The Web Startup Success Guide and Micro-ISV: From Vision To Reality

Patrick McKenzie
Bingo Card Creator


Had my first refund today..  Five years, hundreds of sales. And one wrong one. Not a big deal, but can't get rid of a sour feeling. How is it that one wrong customer can make the rest of a day so sucky..
Dima Send private email
Thursday, October 23, 2014
I took the first one personally. 9 years later and I hardly bat an eyelid now . But I had to refund a Pro edition today, that smarted a bit.
Andy Brice Send private email
Thursday, October 23, 2014
Yep.  Try to focus on all the happy clients and remind yourself - it's just a numbers game.  The internet helps us connect with all kinds of people which is great but you're going to get some bad eggs as a consequence.

I've noticed that many really successful people seem oblivious to criticism/embarrassment.  They can make a huge mistake or have people totally trash their company/decision/statement/etc. and they just plow forward like nothing happened. 

Meanwhile the rest of us (who don't happen to be sociopaths, ha ha) are worried by any criticism, insult, mistake, embarrassment, etc.  And it slows us down.

Five years without a return?  That is AMAZING!  Something to be celebrated.  I'm certainly impressed! 

I'm curious, was the person difficult/nasty about it, or was the purchase just a mistake in that the software wasn't the right fit for their needs?
Emily Jones Send private email
Thursday, October 23, 2014
@Emily, no no nasty stuff.., everything was civilized, just wrong hands.

There were several setup issues which user couldn't figure out himself and I couldn't help because he couldn't share anything due to security restrictions, not even a log file. I also had to deal with people who have no idea what product is all about while high technical level is required upfront. Eventually the email exchange started to sound like frustration on his part. I asked if he'd rather "rewind". He said ye. Push of a button, shaking hands. Good luck and sorry for your time.

Two lessons learned.
1. user didn't evaluate the product and placed it into live production system trusting that things will just work and when they didn't he started to get frustrated, there was no a technical person handy while issues in hand were trivial to any network savvy developer.
2. users (in general) don't read manuals, if it gets more complicated that watching "showmedo" clip of 1.5 minutes then expect endless stream of emails with questions.

I can and do cope with #2, that's life.. But how do you deal with #1? This is plain recklessness.. which leads to destruction. And it did.
Dima Send private email
Friday, October 24, 2014
First return for 5 years? We hardly have 5 days without return (and no, our products aren't crap - plenty of customers love them).
I can understand it's frustrating because you've spent time trying to help, and your products are high price.

As Emily said it's just a numbers game. There is always someone who won't fit and I wouldn't think too much about it. We put a lot of effort to explain everything on the site, to place live demos, screenshots and all, but there are always users who buy without evaluating and then say "it's now what I expected".

If this starts to happen often, then worry. Now just move on and enjoy your day.
handzhiev Send private email
Friday, October 24, 2014
Five years and now your first refund?  Get over yourself.  Seriously.  Others would kill to have that kind of success!
PSB136 Send private email
Friday, October 24, 2014
If I never got any refund requests I would think I wasn't pushing hard enough for the sale.
Andy Brice Send private email
Friday, October 24, 2014
There were probably other users who didn't find the product as expected and simply stopped using it. Got plenty of those quiet ones. I didn't want to sound as if it's five years of happy campers and fluffy bunnies.. It's B2B and often people just don't bother. But never had someone tell to my face that it's a waste of his time, especially after I spent a week explaining that socket write error my have been caused by his own network setup.

But it was yesterday, life goes on.. and it's Friday!
Dima Send private email
Friday, October 24, 2014
>It's B2B and often people just don't bother

People care a lot less about other people's money (OPM). ;0)

Also, asking for a refund might mean lots of paperwork hassle and admitting to your boss and peers you made a mistake.
Andy Brice Send private email
Friday, October 24, 2014
That's the spirit - though being self-employed Friday just means "Oh no, I have to be social and stuff for 2 whole days instead of getting on with some work..."

Reluctantlyregistered Send private email
Friday, October 24, 2014
I wonder what the average refund rate is.
I think I have a high one with ~1.5%.
The product has a short lifespan (most customers won't use it for more than a few days). It's heuristic. The trial is quite pushy.

I don't care much about the refunds unless it's something stupid like "add this feature or my money back".
Zka Send private email
Friday, October 24, 2014
I don't have my exact number, but it's probably a bit under 1% I guess.

I don't think your 1.5% seems high to me. There are some that would say if your return rate isn't high enough, you're not selling hard enough!

For myself, the key is to be fair to the customer, which means to allow the no hassle refunds.

Yes, those refunds can hurt, especially in the early years when each one seems like a personal affront.

But the reality is that our products are not perfect solutions for every one.

The era of trying the product in specialty stores with knowledgable sales staff is *long* dead and gone.

Also, experience shows us that a lot of consumers are confused by the whole concept of trialware and demos.

We have a fair number of  people who prefer (or only understand) the model of buy->try->(keep||refund). It does cost us *some* money to handle these folks and their evaluation style, but the costs of refund are small enough that it's not an existential threat to our business. And the majority of people that might do this end up keeping things, so it's foolish to just say no to all of them.

Yes, each refund is a rejection.

In my personal history, I'd say that it's somewhat rare that I find out what the real reason is for the refund. And I'm sure a few of them have been scams and they kept the product and kept using it.

However, in some cases the customer tells me exactly and precisely why they returned it.

This feedback when it happens can be incredibly useful. Not all feedback is this way, but enough is that it is more valuable that doing a costly study with focus groups or usability evaluators.

Here's some examples of very useful feedback:

"I did this thing and the program crashed."

This person has lost confidence in the product and has a good reason to return it. My #1 priority the week after getting this note is to fix this confirmed bug. And then I give that person a free license to the fixed copy, as thanks for writing a duplicatable bug report. This is very rare to have this happen.

"I couldn't figure out how to do X."

X is a reasonable thing the software can do, but it doesn't do. Furthermore, this is the 3rd time I have heard from a customer they want it to do X. My #1 priority the month after getting this note is to implement X. Although in this case I don't give a free license, instead I email the person that their desired feature is now available.

Of course a lot, perhaps 90% or more, of people who ask for refunds don't give coherent and actionable feedback. That's OK. The 10% that do, the cost of refunds is like a golden ticket to a magical focus group that can really target how your product is failing to be the overwhelming best in its market segment.
Scott Send private email
Sunday, October 26, 2014

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