Trial With Penalty Downsell
Start for free, but pay penalties if you don't meet the criteria — turning 'no' into 'let me try.'
Customers try your product for free as long as they meet your terms. If they fail to meet the terms, they pay a penalty fee. This is used as a downsell after someone says no to the main offer. It only changes what they pay TODAY, not how much they pay in total. The criteria should mirror the Win Your Money Back offer: attendance, progress tracking, engagement. Always get a credit card on file, always sell 'staying and paying,' and explain fees after getting the card. Break up fees per criterion rather than one lump sum.
- Offer the Trial last — only after they reject the main offer
- Always get a credit card on file before explaining fee details
- Always sell 'staying and paying' — confirm they will continue if it works
- Break up fees per criterion rather than one lump sum
- Make check-ins required — they are upsell opportunities
- If someone refuses to put a card down and do the work, do not sell them
- Present the Trial After They Say NoOnly offer this after the customer has rejected the main offer. Position it as a risk-free way to experience the product: they start for free, with criteria they must meet to keep it free.Pro tipJust call it a 'Free Trial' externally — calling it 'Trial With Penalty' scares people.WarningIf someone refuses to put a card down and do the work, do not sell them. They complain more and convert less.
- Get Card On File and Sell StayingGet their credit card first. Then ask them to agree that if the program works, they will stay and pay long-term. Only explain the specific penalty fees after both of these are complete.Pro tipA small discount like 'first month for $1' can justify asking for a card when 'free' makes people suspicious.
- Set Criteria and Penalty StructureDefine clear, measurable criteria that mirror what gets customers the best results: attendance, activity completion, progress reporting. Break fees into per-criterion penalties rather than one large fee.Pro tipLet people 'make up for goofs' to prevent discouragement — offer extra sessions or alternative ways to meet criteria.
- Handle the Three Trial OutcomesIf they LIKE it: they are already set up for billing, meet with them and offer a longer-term service. If they HATE it: ask what they would have changed, take blame, then offer a higher-level product. If they DIDN'T USE it: reach out multiple times, offer to waive the fee for a meeting, try to get them back on track.Pro tipRoughly half of unhappy trial customers can be saved by offering a better-suited product and taking blame.WarningAvoid billing non-starters — they leave 1-star reviews. Try to get them back on track or gracefully let them go.
Free $500 onboarding if customers attend three 60-minute Zoom calls, complete homework, activate profiles, and get employees set up by the third call. Penalty charged for each criterion missed.
Free if they attend all consulting calls, post progress weekly, journal daily, and attend transformation sessions. Each missed criterion has a specific dollar penalty.
Hormozi adapted the Win Your Money Back concept into a downsell format. Instead of charging upfront and refunding, he reversed it — starting free and charging only for non-compliance. An HR software company proved the concept by offering free onboarding if customers completed training, with fees for skipping. Customers completed training, learned the software deeply, and became sticky.