Timothy Ferriss - The 4-Hour Workweek - Escape 9–5, Live Anywhere, and Join the New Rich - Expanded and Updated

Offer one or two purchase options (“basic” and “premium,” for example) and no more.

Do not offer multiple shipping options. Offer one fast method instead and charge a premium.

Do not offer overnight or expedited shipping (it is possible to refer them to a reseller who does, as is true with all of these points) , as these shipping methods will produce hundreds of anxious phone calls.

Eliminate phone orders completely and direct all prospects to online ordering. This seems outrageous until you realize that success stories like Amazon.com have depended on it as a fundamental cost-saver to survive and thrive.

Do not offer international shipments. Spending 10 minutes per order filling out customs forms and then dealing with customer complaints when the product costs 20–100% more with tariffs and duties is about as fun as headbutting a curb. It’s about as profitable, too.

Some of these policies hint at what is perhaps the biggest time-saver of all: customer filtering.

Not All Customers Are Created Equal

Once you reach Phase III and have some cash flow, it’s time to re-evaluate your customers and thin the herd. There are good and bad versions of all things: good food, bad food; good movies, bad movies; good sex, bad sex; and, yes, good customers and bad customers.

Decide now to do business with the former and avoid the latter. I recommend looking at the customer as an equal trading partner and not as an infallible blessing of a human being to be pleased at all costs. If you offer an excellent product at an acceptable price, it is an equal trade and not a begging session between subordinate (you) and superior (customer). Be professional but never kowtow to unreasonable people.

Instead of dealing with problem customers, I recommend you prevent them from ordering in the first place.

I know dozens of NRwho don’t accept Western Union or checks as payment. Some would respond to this with, “You’re giving up 10–15% of your sales!” The NR, in turn, would say, “I am, but I’m also avoiding the 10–15% of the customers who create 40% of the expenses and eat 40% of my time.” It’s classic 80/20.

Those who spend the least and ask for the most before ordering will do the same after the sale. Cutting them out is both a good lifestyle decision and a good financial decision. Low-profit and high-maintenance customers like to call operators and spend up to 30 minutes on the phone asking questions that are unimportant or answered online, costing—in my case—$24.90 (30 x$0.83) per 30-minute incident, eliminating the minuscule profit they contribute in the first place.

Those who spend the most complain the least. In addition to our premium $50–200 pricing, here are a few additional policies that attract the high-profit and low-maintenance customers we want:

Do not accept payment via Western Union, checks, or money order.

Raise wholesale minimums to 12–100 units and require a tax ID number to qualify resellers who are real businesspeople and not time-intensive novices. Don’t run a personal business school.

Refer all potential resellers to an online order form that must be printed, filled out, and faxed in. Never negotiate pricing or approve lower pricing for higher-volume orders. Cite “company policy” due to having had problems in the past.

Offer low-priced products (à la MRI’s NO2 book) instead of free products to capture contact information for follow-up sales. Offering something for free is the best way to attract time-eaters and spend money on those unwilling to return the favor.

Offer a lose-win guarantee(see boxed text) instead of free trials.

Do not accept orders from common mail fraud countries such as Nigeria.

Make your customer base an exclusive club, and treat the members well once they’ve been accepted.

The Lose-Win Guarantee—How to Sell Anything to Anyone

If you want a guarantee, buy a toaster.

—CLINT EASTWOOD

The 30-day money-back guarantee is dead. It just doesn’t have the pizzazz it once did. If a product doesn’t work, I’ve been lied to and will have to spend an afternoon at the post office to return it. This costs me more than just the price I paid for the product, both in time and actual postage. Risk elimination just isn’t enough.

This is where we enter the neglected realm of lose-winguarantees and risk reversal. The NRuse what most consider an afterthought—the guarantee—as a cornerstone sales tool.

The NRaim to make it profitable for the customer even if the product fails. Lose-win guarantees not only remove risk for the consumer but put the company at financial risk.

Here are a few examples of putting your money where your mouth is.

Delivered in 30 minutes or less or it’s free!

(Domino’s Pizza built its business on this guarantee.)

We’re so confident you’ll like CIALIS, if you don’t we’ll pay for the brand of your choice.

(The “CIALIS® Promise Program” offers a free sample of CIALIS and then offers to pay for competing products if CIALIS doesn’t live up to the hype.)

If your car is stolen, we’ll pay $500 of your insurance deductible.

(This guarantee helped THE CLUB become the #1-selling mechanical automobile anti-theft device in the world.)

110% guaranteed to work within 60 minutes of the first dose.

(This was for BodyQUICK and a first among sports nutrition products. I offered to not only refund customers the price of the product if it didn’t work within 60 minutes of the first dose , but also to send them a check for 10% more.)

The lose-win guarantee might seem like a big risk, especially when someone can abuse it for profit like in the BodyQUICK example, but it isn’t … if your product delivers. Most people are honest.

Let’s look at some actual numbers.

Returns for BodyQUICK, even with a 60-day return period (and partially because of it 57), are less than 3% in an industry in which the average is 12–15% for a normal 30-day 100% money-back guarantee. Sales increased more than 300% within four weeks of introducing the 110% guarantee, and returns decreased overall.

Johanna adopted this lose-win offer and came up with “Increase sport-specific flexibility 40% in two weeks or return it for a full refund (including shipping) and keep the 20-minute bonus DVD as our gift.”

Sherwood found his guarantee as well: “If these shirts are not the most comfortable you’ve ever worn, return them and get 2-times your purchase price back. Each shirt is also guaranteed for life—if it gets threadbare, send it back and we’ll replace it free of charge.”

Both of them increased sales more than 200% in the first two months. Return percentage remained the same for Johanna and increased 50% for Sherwood, from 2 to 3%. Disaster? Far from it. Instead of selling 50 and getting one back with a 100% guarantee [(50 x$100) – $100 = $4,900 in revenue], he sold 200 and got six back with the 200% guarantee [(200 x$100) – (6 x$200) = $18,800 in revenue]. I’ll take the latter.

Lose-win is the new win-win. Stand out and reap the rewards.

Little Blue Chip: How to Look Fortune 500 in 45 Minutes

Are you tired of sand being kicked in your face? I promise you new muscles in days!

—CHARLES ATLAS, strongman who sold more than $30 million worth of “dynamic-tension” muscle courses through comic books

If approaching large resellers or potential partners, small company size will be an obstacle. This discrimination is often as insurmountable as it is unfounded. Fortunately, a few simple steps can dramatically upgrade your budding Fortune 500 image and take your muse from coffee shop to boardroom in 45 minutes or less.