In today’s ClickFix, we’re going over how to set up your custom refund rate monitor.
But before we get into the “how,” let’s talk about what refund rate means and why it is critical that you keep an eye on this not just as an overall metric, but also for each of your products.
Your refund rate is calculated by dividing the total number of units sold by the total number of products returned. Then we multiply that by 100 to determine the rate or percentage.
For example, if you sell 100 units of a product and then 12 are returned, your refund rate would be 12 divided by 100 times 100 or a refund rate of 12%.
Studies show the E-Commerce returns are as high as 30% while digital goods such as info products on popular platforms like Clickbank average around 10%.
But, even if your refund rate is close to negligible, DON’T IGNORE IT!
When you’re calculating almost any other metric (even something as simple as conversion rate), you have to take into account your average refund rate, too.
If you don’t, you’ll your projected revenue will be off and that could lead to losses down the line when the returns start coming in and you haven’t planned for it. This critical mistake has led to cashflow problems for more than one business owner as they spent money that should have been held in reserve until after the refund period expires.
Smart business owners take the time to track refund rates down to the product level because of all the advantages that extra data can give you without much additional effort. For one thing, if a particular product has a higher average return rate than the rest, you’ll first want to take a look at your offer.
- Ask yourself questions like:
- Are you promising something that the product doesn’t deliver?
- Is there a disconnect between the price and the perceived value of the deliverables?
- Does the copy set realistic expectations and clearly explain what they’ll get?
If you’re using paid traffic, I’d then move on to examining your targeting. For example, are you putting the offer in front of the right type of prospect? Once you reach a certain number of returns, you may even be able to upload a list of these “anti-prospects” to create lookalike audiences in the various platforms to potentially help exclude similar profiles from your future ad campaigns.
Finally, it might be time to review the product itself. If you are collecting data from people who request a refund, review their comments to see if you can spot any trends that will give you clues on where to improve. If it is an info product for example, maybe creating a simple “bonus” to fill the holes people have identified will help. For both physical and digital offers, perhaps an onboarding or check-in call soon after purchase will uncover less than satisfied customers before they ask for a refund so you can talk them off the ledge.
If you’re like most business owners, you’ve probably spent both time and money to acquire each customer. With a bit of tweaking, you’ll be able to make sure that all that hard work doesn’t go to waste. But, the first step is being able to identify where the problems might be. With that in mind, let’s jump into Ontraport to take a look at our custom campaign.
After clicking on the import link located in the member’s area of our website below this video, follow the steps to add the custom campaign to your Ontraport account. Once that’s done, navigate to the “Campaigns” tab if you aren’t there already and click the link to open the “ClickFix – Refund Rate Monitor” campaign. Once it loads, click the “Edit” button and follow along.
Here you’ll see that we’ve set things up for you to track your overall refund rate as well as a template for setting up individual tracking for each of your products to give you the flexibility you need to get at that critical data.
Let’s take a look at the “Global Refund Rate” path first. At the top, you’ll see that we’ve assigned a trigger of Purchases > Any Product here. That means it will begin tracking whenever a purchase is made. This should be left as is.
Then, we placed a Goal below that which waits until that person gets a refund on Any Product. While this calculation isn’t perfect since it is theoretically possible for someone to purchase say 2 products and end up refunding 1 of them, it will tell you your overall refund rate.
For more precise metrics, we’ll use the product level tracking… which we’ll explore now.
When we open up the “Example Product” trigger, we see that it’s set to detect when someone purchases a specific product. In our case, that’s just the example product, but you’ll be able to select your desired product from the drop-down menu. Once your done selecting the product, be sure to change the description and the notes field so you and your team don’t get confused when looking at the results.
Below the trigger, you’ll find the goal which, as you probably already guessed, is set to fire when someone gets a refund on the product we selected in the previous step. In our case that’s the example product, but be sure to select the right product or it won’t do anything for you. Again, you’ll want to change the description and the notes to reflect your changes just to keep everything straight.
So, what do you do if you have more than just one product?
Simple, the crack team over at Ontraport made duplicating entire downstreams as easy as drag and drop. Just hover over top left corner of the trigger element where you see the move icon. Click the icon and drag it over the “+” icon to the right and release your mouse button. Select “Copy this item, and all following items” when the dialogue box appears to clone the downstream.
From there, it’s just a rinse and repeat of the previous steps to set it up for the next product in your catalogue. You can do this as many times as you need to until all of your products are mapped. When you’re done, click the “Save And Publish” button and Ontraport will do the rest.