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The Nitty Gritty of Running Online Courses

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Nothing dampens an online course creator’s enthusiasm like problems with collecting payments.

You spend weeks working with your students, answering their emails and solving their problems, doing your best to help them find success. They’re engaged and eager to learn, and you think to yourself “Wow, I’m really making a difference in this person’s life.”

But when the time for payment comes, you are met with declines, delays, and plenty of excuses to go around.

This is the disappointing reality for many entrepreneurs, yet it’s also the best-kept dirty little secret of the course-building industry.

The best-kept dirty little secret of the course-building industry.Click To Tweet

The opportunity for online courses has never been better, and lots of people are jumping on board because of all of the positives it has to offer. But no one warns you about how to handle the frustrating “dark side” of solopreneurship: chasing after payments and managing refunds.

I’m here to change that.

I know how you feel because I’ve been there. Well, I am there, as Mirasee’s Account Specialist.

Being an entrepreneur doesn’t have to be a cash-flow death sentence. Click To Tweet

Being an entrepreneur doesn’t have to be a cash-flow death sentence. I’ve figured out a few ways to help you protect yourself and your business, so you can keep making your impact without wondering when your next check will arrive.

Let’s start at the beginning.

Accepting Payments at Enrollment

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If you’re just starting out, you will probably want to get set up through PayPal. It’s user-friendly and almost everyone has one so it’s easy to accept PayPal to PayPal payments. Plus it is easy to scale with—Mirasee still operates through PayPal.

As far as credit cards, I recommend accepting payments from Visa and Mastercard, which are the most common cards, and saying no to American Express—especially if you’ve just gotten your boots on the ground. Amex comes with higher fees, and it’s known for providing great customer service. That is a great thing if you are a customer, but as a business, Amex can come back to bite you. For example, if a customer files an unwarranted chargeback against you, Amex will NEVER side with you (More on chargebacks in a bit).

So you’re all set to accept payments from PayPal, Visa, and Mastercard—great! Now let’s say I am the student and I go to purchase with my Visa but my card gets declined, what then?

Don’t panic; chances are their bank just blocked the payment for one of the following reasons:

  1. Daily spending limit: If you have been following Mirasee and the online course trend, you know that education comes at a premium. That means that the course you’re charging top dollar for could very well exceed the student’s daily credit limit.
  2. International block: If you’re not in the same country as the person purchasing, their financial institution (bank or card provider) may flag the purchase as an unauthorized foreign transaction. This is the bane of my existence because Mirasee is a Canadian company with students primarily from the USA.

For either of these issues, the fix is a simple one. The student simply has to call their financial institution and ask for the block to be removed, then they can reattempt the purchase.

The key is to catch the failed order early and reach out to the student as soon as possible. Otherwise, they’ll assume their order was processed, and they’ll be wondering how to access the course they just paid for! Not a good feeling.

So keep an eye on your checkout system and if possible set up email alerts for failed orders. Ours land in a pile called “accounts receivable” and a notification is sent my way automatically, but it may be different in your system.

Once you see one of these orders, send an email to the student explaining the situation and asking them to contact their bank. I keep a saved template email handy so the notification is as immediate as possible from the time of failure.

It’s also nice to include a work number where they can reach you on your checkout page and in that email, just in case they run into more problems.

So let’s assume all is hunky dory and the student has successfully purchased your course. How do we keep them in the course?

Minimizing Refunds

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The major player here is the guarantee.

Almost every course—in fact, almost everything you buy—comes with a refund guarantee. That refund is typically valid for 30 days, no questions asked. It’s clean, it’s simple, it’s practically implied. That’s what people are used to when they buy a product.

But let me ask you, did your student just buy a product?


They bought education. So you need to treat it differently.

Your guarantee should not be a get-out-of-jail-free card.Click To Tweet

Your guarantee should not be a get-out-of-jail-free card because it puts your business at risk and does a disservice to your students. It puts your business at risk because 30 days allows people time to download or copy your information before refunding. People also feel entitled to a refund once the offer is on the table, and it becomes hard to enforce the rules when they request a refund outside of the time limit. If you deny them, they will likely go to their credit card company and file a chargeback, which hurts your business.

So what should a guarantee do?  

A guarantee should serve as a mindset shift for your students. It should direct the student toward completing the course and fulfilling goals, and reassure them that you will be there to support them in achieving success. And it should hold you accountable for that promise.

At Mirasee, we have a “Partnership Success Guarantee” for the Course Builder’s Laboratory, which says:

If you put in the time, do the work, and lean on your coach, then you will successfully launch your course, PERIOD. If you don’t, we’ll create a customized Course Correction Plan to pinpoint your roadblocks and give you specific action steps to launch successfully. If that plan doesn’t work, we’ll give you DOUBLE your money back.

Other folks in the industry are taking similar approaches.

Instead of offering a “no questions asked” refund, Bill Baren’s team will get on the phone with you to pinpoint exactly what isn’t working and help you pivot to get back on track. If they truly can’t help you reach your goals, then they’ll give you a refund.

Remember that each student signed up for your course for a reason. They have a goal they wanted to achieve, and they’re relying on you to help them achieve it. Your guarantee should reassure them that you’re in this together and they’re going to be successful, if you both deliver your respective ends of the bargain.

Handling Delayed (Or Declined) Payments for Payment Plans

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Let’s say I’m in your course, and I’m on board to complete the work because I trust from your guarantee that you’re on my side. Then, life happens and something unexpected comes up.

This is where I will have to ask for a payment delay.

To understand payment delays, we need to understand the difference between payment plans vs. subscriptions.

A payment plan spreads out the cost of the course over a period of time to make financing easier on your students. A subscription, on the other hand, is a month-to-month product, and access can be canceled at any time.

This is important because, on a payment plan, a student is responsible for completing all payments, even if they aren’t using the course at the time. This distinction and responsibility should be clearly explained in your terms and conditions at checkout and on your sales page.

Now that we understand payment plans, let’s talk about how to handle payment delay requests.

When a student reaches out to you to make the request, recognize that they’re probably in a desperate situation. This is the time to have compassion. Most people want to get their expenses back on track.

I typically ask the student how quickly they can resume payments. This gives them a sense of agency and control over the decision, and they will likely give you a shorter answer than if you presented a grace period. You may even want to ask students to come up with an action plan to keep them on track for their payments, and set calendar reminders to check in with them according to their plan.

That said, it’s nice to set a maximum payment delay time, in case someone asks for a delay that is far beyond what you can provide.

You might have noticed that I call these “delays” instead of “pauses.” That is intentional, because “delays” have definitive end dates, whereas “pauses” are indefinite. “Pauses” are also frequently used for subscription products, which are not the same as a payment plan.

Now suppose your student doesn’t reach out for you about a delay, but their card is being declined.

There is no cause for alarm. Declines are all too common when working with entrepreneurs and will happen for several reasons, such as an updated credit card number or a new expiration date. For a problem like that all you have to do is send the student an email with instructions on how to update their card information in your system.

The larger concern is if the decline is occurring because the account is overdrawn and there are not enough funds. For this issue, create a series of automated emails that address each charge failure, and establish a cut-off date after which point you will stop trying to charge the card. Our cut off is after 4 charge attempts, with attempts occurring every 4 days.

Here are what our emails look like for that process:

Email after First Decline

Assume positive intent. The student probably doesn’t know their card was declined. We’re just checking in with them to let them know, see how they’re doing, and provide information on how to update their card information.

Email after Second Decline

With this notice, we give a stronger reminder to fix the issue and mention that this is the second email we have sent. We also emphasize that we want to continue working with the student, but in order to do so, we need their account to be up-to-date.

Email after Third Decline

This should be a final warning, and clearly state that if the decline is not resolved, their course access will be canceled. We also inform the student that if they don’t contact us or update their information, then their account will be sent to our collections agency.

Email after Fourth Decline

This is the final notice that an account has been canceled and sent to collections. We close the account and remove course access.

As you may have noticed, we work with a collections agency. We rarely have to send accounts to them, and if you’re just starting out this is certainly not something you need to consider right away. You can bring in a collections agency whenever declines and defaulters are getting out of hand, or when your
business has enough accounts to warrant one.

If you do need a collections agency, look for one that collects in your main client country because most agencies are not international. You will also want to choose a collections agency that only bills for what they collect rather than an agency with a retainer fee. You will probably collect about 50% of what they recover, which is better than nothing.

Tackling Chargebacks

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How to handle chargebacks: Click To Tweet

The final beast you need to be aware of is chargebacks. A chargeback is when a customer disputes your charge as fraudulent and reports you to their financial institution to have the charge revoked. You want to minimize, if not completely avoid chargebacks, because having a chargeback history can hurt your business and reputation, and it can cost you a lot.

When a chargeback is filed, you will have the chance to argue against it and prove your case. In anticipation of this, you can protect yourself by taking some steps:

  1. Make sure the terms and conditions of your course are ironclad. Have a lawyer review your language if possible. You will also want to make sure anyone purchasing your course has to review and agree to the terms and conditions at checkout. Keep a copy of these terms and conditions handy to present as chargeback dispute evidence.
  2. Make sure your email system has time stamps showing when clients have opened your emails, and that you can track student course activity on the back end of your site. You will need to send screenshots of all email communication, guarantee terms, course log-ins, etc., to fight chargebacks and prove that the student knew what they were purchasing and engaged with the course.

This might seem like a lot to take in, and it is. But as you learn the ropes, it will get easier. And even though this isn’t the most glamourous side of course creation, controlling the nitty gritty stuff will provide the sustainability your business needs so you can keep serving your students. And that’s what it’s all about, right?

What are the biggest challenges you face when it comes to getting paid and keeping students?

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