How Terrible Policies Will Kill Your Business

0:00We are going to talk about how terrible policies will kill your business. So this episode was inspired by an experience that I had. And typically I don't like to name names, but I think it's helpful to give examples here. So basically I had signed up for a travel company. Basically like they give you kind of deals on flights and all that. Right. So I saw a charge come through, like I paid for the first year, I paid$99 or so. And I saw another charge that came through for$99. But to be honest, I didn't use the product for the year. So I'm like, okay, if I paid for the first year, like that, that's on me.

0:31Right. But they charged me again. And I was like, Hey guys, like I haven't used a product. You can, you can look at my usage. Like I haven't used it. Can you just refund me the money? Let me just ask you, Neil, should I typically get the money back or not? You should. And if they won't, then you should do a charge back. Yep. Which I mean, so this company, a dollar flight club, so that we go back and forth with them and they're like, yeah, you know, as a matter of policy, we can't do it, but you know, we'd like to give you access for, you know, the next year or whatever. I'm like, but you just took my money.

0:59And they're like, no, you know, it's, that's our policy. I'm like, okay, that's cool. That's your policy. You know what? You can keep the$99. Right. And so I think it's really important at the end of the day. I'm not saying the customer's always right, but it's important to think about the experience that you're giving to other people. Like, is that something that's going to be conducive to getting more referrals? Or is that going to be something that somebody, God forbid, talks about it on their podcast? So. And what they're getting wrong is if they keep doing stuff like this, it's just going to hurt their brand.

1:28And in the long run, it's going to cause less growth. So it's just like, do you want to pay charge them a$99 to have a bad experience and then bad mouth you to others? Like even if they're wrong, and it's not that much money, like when you're small amounts, like 99 bucks, 10 bucks, 50 bucks, whatever it is, you should just refund people even if they ended up using it. That's at least my philosophy. Because those kind of policies really hurt your revenue in the long run. You know what? So the All In Summit, which I just came back from, you know what they did? So here's the situation with the All In Summit.

2:04So there's a lot of people that paid for a VIP ticket, right? So$7 ,500 for a VIP ticket. Now a general ticket is$1 ,500. Now, look, I think the event was good overall, but many people that paid for the VIP, over half of the event was VIP. So 1 ,000 people out of like 1 ,800 or so were VIP and they paid$7 ,500. but the experience they got was mostly the same as the general admission. And so sure they got to come in early for the dinners, got to wait in line early or whatever, but largely it's the same experience because the dinners weren't like sit down experiences where if you paid 7 ,500, you get to sit down and meet really cool people and it's kind of more curated.

2:39So what ended up happening was a lot, a lot of people started complaining in the feed because they were using the app for the event. And those people basically their posts got deleted from the feed, but those people all got downgraded to 1500 for general admission and they got$6 ,000 back. And so that's a nice way to handle the situation without pissing a lot of people off because a lot of people like we're talking about it. So I think they handle that well. And in most cases, it's just easier because you don't want to cause negative brand equity. Dude, it's not worth it. So, so overall, would you say people were happy or disappointed?

3:15I would say people were overall happy and they're looking forward to the next one. And look, it's just their second one, like an 1800 people is a lot of people. And people make mistakes, but like, at least they own up to it. And that's what's important, because you're never going to get your product or service 100 % right out the gate. I totally agree with you on that one. But yeah, no, it's kind of crazy to think about and how people go about, you know, with their internal philosophies. And what do they say? Pennywise, pound foolish, right? They're just trying to make a quick buck and they're not thinking long term.

3:49And if you look at Warren Buffett in his annual letters, I remember years and years ago, he wrote, if you had the decision to do something that helps you gain short term revenue, but can hurt your brand, don't do it. Protect the brand in the long run, do what's best for the brand versus just taking short term gains. Well, short term gain, long term pain. That's the phrase, right? And also, like I have Mr. Alex Ramozzi's book over here, right? $100 million leads. And we talked about how he did his launch. And you want to talk about building goodwill. this guy gave like what five or$10 ,000 of courses away for free.

4:23And all you had to do is maybe just buy a book if you felt like buying a book. And that's a nice way to build goodwill for the long term because more people are going to talk about it. But there's also a way to build negative goodwill as well. And this is how you do it. And so look, I think the final thing we'll end with is when you have a positive review, like it doesn't help you that much, but a negative review hurts the hell out of you. It's like a five or 10 X type of negative hit, right? It's just massive. I just don't get why people do it and they don't really care. It just really crushes you in the long run.

4:54All right. So that is it for today. Please don't forget to rate, review, subscribe. It helps us grow and we will see you tomorrow.