If you’re in direct sales, you know all about returns and chargebacks. But what you might not know are the tools you need to avoid those returns and disconnects in the first place. So let’s talk chargeback prevention.
Chargebacks are a great way to torpedo the morale of a sales rep. After all, you go out, works the process, win over the customer and close a deal. You feel good about your accomplishment! But then, out of nowhere, with no warning… the customer changes their mind. They return their product, or disconnect their service.
The company gives the customer a refund.
You lose your sale, and the commission on that sale. All that work for nothing.
But here’s the secret: most of the time, those chargebacks didn’t come out of nowhere. You did have warning. And they might have been prevented at the time of the sale! It’s just a matter of knowing what to look for.
Check out our 4 step guide to chargeback prevention:
Step 1: Identify The Right Customer Upfront
More often than not, a chargeback is an indicator that the customer you sold to was not the right customer for your product or service.
Not every prospect is going to be a happy customer. Which is why it’s important to identify who is a good fit, and who is a bad fit, before you close the sale.
We want to be careful here, because there’s a right way and a wrong way to take this advice. So let’s be very clear: we are not telling you to pre-judge and pre-qualify your potential customers based solely on how they look or act.
You don’t want to make assumptions about your customers, and you don’t want to leave money and sales on the table because of incorrect snap judgements.
DO Ask Great Qualifying Questions:
The right way to identify the right customer upfront is to ask great qualifying questions to get to know them as best you can, before they sign on the dotted line.
Sometimes they may seem willing to pay for a premium service, when you know based on your qualifying questions that they would only use a basic service. Closing them on the more expensive option could lead to a frustrated cancellation later.
Sometimes the most important issue to a customer is not an inherent strength of the product or service you represent. If the customer expects that issue to be resolved when you close the deal, you can expect a chargeback when it isn’t.
And sometimes your potential customer loves what you’re selling… but they just can’t afford it. Talking them into signing a sale or an agreement they just can’t live up to will only cause everyone grief down the road.
Step 2: Provide Extreme Value
No product or service is perfect.
It’s a sad fact: nobody as yet has invented a perfect thing. There will always be a flaw or two, a weakness or a downside that a customer wasn’t expecting when they signed at the time of the sale.
There’s nothing that you, as a sales rep, can do to stop that.
But what you can do is highlight the value in your product.
Part of step one was asking great qualifying questions, to make sure that your customers are the right customers for your product or service. In asking those questions, you’ve learned a lot about what your customer finds important.
Make sure you clearly and enthusiastically communicate the value of your product in light of those customer priorities. They should know which of their important issues your offerings resolve, and how they are resolved. And they should be really excited about it!
We make buying decisions based on perceived value… on how well we think this particular product or service can do the job we need it to do.
If your customers are aware of the extreme value your service provides, they will be more than willing to overlook the occasional flaw.
So be sure to communicate that value upfront… before you close that sale!
Step 3: Set Accurate Expectations
Nobody likes to get less than they expected.
And here’s the uncomfortable truth: a customer may receive everything you as a salesperson promised you’d deliver. But they may have expected something that you never offered.
People have selective hearing, sometimes. They may throw their own expectations on top of your product and then be upset when it doesn’t deliver on those expectations… that it was never designed to address in the first place.
Communication is key here. Make sure that you are setting accurate expectations for what your service can accomplish, and correct any misunderstandings your prospective customer may have before they commit to buying.
The other expectations to clearly lay out involve billing. Do your customers know how much your services cost? How often they will be billed? If you’re offering a promotional rate, do they know how long it lasts?
Talking about money can be awkward, but it’s more awkward to get a chargeback because a customer feels misled than to set the correct expectations beforehand.
Step 4 (Optional): Be A Resource After The Sale
We list this step as “optional” but perhaps a better word is “conditional.” It all comes down to the product and service you offer, and the frequency and cost of potential chargebacks.
As a salesperson, you make your money by closing new business. So any time spent with already won customers can take you away from going out and securing new deals. If chargebacks don’t impact your bottom line extensively, or your industry is filled with complex questions that are time-consuming to navigate, then this step may not be worth your while.
That being said, if you’re in a relatively simple industry with high-cost chargebacks, it may be worth it to keep yourself available as a resource to your customer after the sale, as a means of chargeback prevention.
If a customer is frustrated with a flaw, or a misunderstood expectation, they are less likely to cancel their service if they have a familiar person that they can bring their questions and concerns to.
If you clearly make yourself available to your customers if they have future questions, they may reach out to you before they reach out to the cancellation department.
This can allow you to re-focus the customer on the extreme value of your product or service, and diffuse the frustration over the flaw or unfulfilled expectation.
Chargebacks are an unfortunate part of the direct sales experience, but one that can be managed with the right training and support.
If you’re looking for the support to take your career in direct sales to the next level, Solcomm wants to hear from you. We support and train up direct sales leaders in the Telecom industry. Check out our opportunities today!