As a millionaire business coach, info product seller and other type of entrepreneur you may be making a big mistake. And, it needs to stop in 2020.
We’re talking about ignoring compliance. Even worse, you could be running your entire online empire with one payment platform. It’s time to modernize your business and be ready for the new decade.
Whether you are a famous business coach, Youtuber, influencer, mentor or investor, your goal is the same. That is to provide advice and content to your customers. They need to learn from you and start their own empires. And if you (and they) are successful, you will be compensated handsomely.
But, selling your products and services through one payment channel is taking a huge risk. Should anything happen to your merchant account, your business can be put on hold while you find another suitable solution. It can be technical downtime or higher than normal chargebacks during one month.
Many popular business mentors seem to have struck overnight success. The reality is that most coaches takes years to build a following and become successful. Whether you are selling tickets to mastermind-style coaching events or customized info products, ensure you have payment solutions that accommodate your growing business. Your company should weather any storm you encounter from a bad affiliate or traffic source.
Also, in our experience, mega-earning business owners can sometimes be careless with compliance and reputation.
When that happens, they may lose their ability to process payments or their merchant account.
Merchants in this area share similar pain points. Scams from deceptive competitors in your field can cause trouble for you with consumer groups. A sudden termination of your payment processing can happen due to excessive chargebacks that may be stemming from a disgruntled affiliate partner. Accusations of fraud made by disgruntled customers, who don’t follow the coaching and expect overnight success could result, in a lawsuit. These are a few of the problems unique to biz-op owners and business coaches.
Worse still, these issues are sometimes only the beginning. Many of these personal brand businesses run into trouble with national governing bodies.
In this post we will provide you with key strategies for diversifying your payment channels. We will also touch on the importance of being compliant with policies of acquiring banks and governments.
Failure to heed the following advice could see yourself go from crushing it to completely crushed. So, pay attention. This blog could help save your multimillionaire status.
More multimillionaire business coaches, and other business opportunity entrepreneurs are being derailed by national governing bodies
Work-at-home operations penalized
Regulatory crackdown is one of the biggest threats to millionaire online coaches. Increasingly, online companies selling the opportunity for clients to build their own businesses are being hit with bans and refund orders.
One work-at-home business was subjected to an immediate ban from operating. They also had to refund $1.1 million dollars to over 80,000 customers. This particular company sold online training systems designed to help people make money at home. So, what went wrong in this particular instance to earn such a punishment?
The breaches related to claims made in the advertising of this business opportunity. The individual who fronted the organizations made unrealistic claims. In many advertisements for their online training system, they claimed customers could “earn hundreds of dollars per hour from home without any skills or experience.” The Federal Trade Commission (FTC) asserts that these earnings claims were neither proven nor substantiated. Meaning potential customers were unable to accurately assess the business opportunity presented to them.
Business coaching outfit lied to customers
A similar judgement was handed out to a business coaching outfit, with $380,000 in refunds issued to customers. In this instance, the company sold business coaching packages for upwards of $10,000. The idea was that clients would then go on to develop their own profitable business. Yet the FTC found that this did not happen for the vast majority of those who purchased the course. Most consumers failed to develop a functioning business (earning very little money back on their investment). Others ended up in debt as a result of purchasing the online courses in question.
The company also suggested to their clients that they had special access to lines of credit for which they would not be personally liable. This again proved to be false. In actual fact, salespeople targeted clients to apply for various personal credit cards instead.
Business coaches should take note of these lessons, to avoid a repeat of their consequences. But there are several more practices that can land you – as a successful online business owner – in some serious trouble.
Avoid common mistakes so you can scale
Biz ops and business coaches share many common practices. For example, many of the techniques used by internet marketers over the course of the last decade. If you are using these methods described below, it can have some serious consequences for your online empire.
Position your trial offer the smart way
Free trials were once the bedrock of internet businesses. Today, the laws and regulations governing free trials are changing. Unclear terms and conditions, difficult to understand refund policies, and unrelated business descriptors on card statements are no longer tolerated.
What’s more, customers who only sign up for free trials are looking to do just that. Trial the service before committing. When they forget to cancel, they issue a chargeback. Leaving you struggling to keep ratios down to acceptable levels with acquiring banks. Potentially resulting in merchant account termination.
If your business is raking in six or seven-figure months using this model, then think about implementing changes to the signup process to protect your business. Ask for upfront payments and make payment terms clear and visible on your payment page. You can also offer big discounts for purchases that last for a longer period of time. For example, a six to 12-month membership for an online course will help reduce chargebacks since the customer has had the ability to use your product for a whole year.
Keep expectations realistic
As demonstrated by the companies who fell afoul of the FTC, you should always keep expectations of your products realistic. For instance, you may be a rock-star millionaire copywriter who sells an online course for $10,000. It may outline a step-by-step process to setting up an independent copywriting business.
But, avoid guaranteeing results that are similar to your own. Describe what you’ve done and accomplished, but let potential customers decide if they can do the same. Promising results can likely get you to on the receiving end of numerous chargebacks. Not to mention, backlash from angry customers whose ventures never took off.
Steer clear of overpromising and underdelivering. You may well give away all of your secret business-building tips. But not everyone is blessed with the skillset and determination to make a multi-million-dollar empire out of them. Focus on delivering valuable content as opposed to pipe dreams. That way customers aren’t going to come back to bite you when it hasn’t happened for them.
Reputation is everything
Many people hope to become overnight millionaires. They think buying one silver bullet course will get them there. When their expectations aren’t met, they rant on social media about you as a person or your products.
A great deal of these outbursts will fall on deaf ears. But, enough detailed accounts by customers who feel they have been “scammed” or “robbed” have harmful effects. The biggest complaints come from the Better Business Bureau. Unhappy ex-customers also complain through other online platforms with large audiences.
We recommend addressing these issues as well as quickly resolving and replying to complaints. Waiting or ignoring the comments could leave your reputation in tatters. Even if you have a kick-ass product, one well-argued complaint can lead to an avalanche of unjust refund requests. Thus, it’s important to watch online chatter surrounding your name and brand. Not doing so could see your sales drop off a cliff. Also, payment providers review your online reputation before deciding to approve you for a merchant account.
Does your business rely on Facebook adverts to drive revenue? New compliance could see your advertising account banned, crippling your sales overnight.
Read our two-part series to see tips on how to protect your Facebook-derived revenue now!
Payment diversification is key to safeguarding your business empire
We mentioned something very important at the beginning of this blog. When it comes to payments, some multimillionaire entrepreneurs are putting their eggs in one basket. This is a big mistake!
Your online business can be so massive that you keep scaling and crushing your competition. It can be tempting to think nothing will ever change. It’s a dangerous mindset to have. A few wrong moves could destroy everything you’ve worked so hard to build. So, if you want to remain ahead of competitors, pay attention to these expert tips.
Add more strings to your merchant processing bow
Your business is high risk. Which means you should always be diversifying your payment processing capabilities. First, you should have an independent merchant account if you have high sales volume every month. Third-party solutions such as payment aggregators are nothing but a ticking time bomb.
Offshore merchant accounts should be considered. These types of accounts give you access to new debit payment methods in Europe, for example. Even better, you only need to have a presence in one EU country to gain access to the rest of the European Economic Area (EEA) market. You will see a huge increase in your conversions and revenue in Europe and surrounding areas. But don’t stop there.
Investigate how you could accept alternative payment methods like ACH in the US for direct debit transactions from client bank accounts. Alternatively, if you have a secure call center or several qualified agents that handle orders by phone, then MOTO is for you. Diversification can keep your business alive. Even if you lose one of your payment processing methods.
Diversify your marketing
Multimillionaire business coaches may find their fortune perfecting one social media platform. But building your business on the back of a platform you have no control over is beyond high risk. What if you’re a famous Youtuber and suddenly your account is suspended? You could lose everything as a result.
The same goes for Facebook. Does your revenue rely only on Facebook advertising campaigns? If your ad account shuts down, you lose your ability to advertise. And, sales could disappear overnight. Worse, your dormant merchant account may close due to lack of activity. Leaving you unable to process payments period. You should act now to diversify your marketing so that you’re not overly reliant on one platform.
Alter your pricing strategy
Clearly, millionaire coaches and course sellers want to increase prices with a growing business. But, a tweak in pricing strategy can leave you on much better terms with acquiring banks. Instead of selling a world-conquering course for $15,000, try selling specific courses. For example, at $500-$1000 a pop. This will help diversify your risk and allow customers to try before they buy a big package.
The beneficial reasons for doing so are two-fold. Firstly, chargebacks will be lower as customer expectations ease to reflect the lower asking price of each module. Secondly, banks won’t be anywhere near as alarmed at refunding $500 than they will $15,000. A couple of refunds at the latter price might weaken your relationship with a bank. And if this type of volume increases, it might end prematurely. A couple of high ticket chargebacks, can get your merchant account terminated or worse, may get you MATCH-listed or TMF’d (Terminated Merchant File). There’s no need to take those kinds of risks. Especially if your business is performing well and scaling.
Document, document, and document again
When it comes to dealing with aggravated or difficult customers, documentation is your best friend. Having evidence like signed transparent contracts, email confirmations and clear refund policies are to your advantage. Don’t forget to include toll-free customer support numbers, and unequivocal signatures from clients. These are good business practices. It will also help you reduce, and fight chargebacks issued by unhappy clients.
Always abide by guidelines of regulatory bodies
This almost goes without saying. Avoid harmless claims in your marketing materials and sales pitches.
Make sure any earning potential declared to clients is quantifiable. Do not attach timelines to those proposed monetary achievements.
Never use phrases such as “proven system” unless you can do exactly that. In other words, show that it works. You can always share your story and let your customers make their own conclusions. This works quite well as you’re not targeting anyone by sharing your story.
Never say your product is “guaranteed to work”. Emphasize your customer’s responsibility to make their own fortune with the knowledge you have provided. Promising a potential buyer immense riches is a one-way ticket to excessive chargebacks. Once you accumulate enough of those you end up with a terminated merchant account or worse, MATCH-listed. Not to mention the possible enforcement actions of government agencies and consumer groups.
Expand your worldwide business by avoiding costly mistakes
If you’re an internet millionaire scaling to seven-figure monthly revenues, you’re doing it right. Yet, some business coaches and biz op owners worry that everything they have can come crashing down around them. They are right to be fearful.
Crackdowns by regulatory agencies are becoming common. High Visa and Mastercard chargeback ratios can ruin your merchant account. And an over-reliance on one social media platform for sales is also a valid concern for high-risk entrepreneurs.
By following our recommendations, you win three ways. You can diversify payment solutions. Chargebacks will no longer threaten to cripple your business. And, your empire will continue to scale well into the 2020s.