I guarantee you’ll get something out of reading this!
We all love buying something with a great guarantee – it takes the risk out of an unproven product, it gives you confidence that the vendor really stands behind their work and it generates a lot of credibility that you are getting what you pay for.
Guarantees are a great thing…for the buyer, but not the seller…right?
Wrong! – Guarantees are great for both the buyers and the seller!
We had a great discussion this morning at one of my Peer Group Advisory Board meetings about one of the business owners rolling out a guarantee as part of his latest marketing campaign. It was a tough topic with lots of things to consider.
Guarantees are scary things!
In this particular situation, the product is a service that’s delivered over a period of time (think training) and the overall success in large part is driven by the actions (or lack of action) by the customer. Kind of a ‘you can lead a horse to water but you can’t make them drink’ kind of thing.
If you look at a case by case basis, there’s no way to guarantee results for any given individual – what if they don’t pay attention? What if they aren’t very smart? What if they intentionally screw up?
However this client had almost 2 years worth of results that showed clients improved an average of 28% when going through his process! Additionally, like many small business owners, client satisfaction wasn’t just a buzzword, this guy practically kills himself making sure his clients are getting the best of everything.
In short – he’s a perfect candidate for a guarantee because he’s already doing all the work that you need to do (and getting the results) to keep your customers happy, he just wasn’t getting any of the credit for all of that hard work!
As we talked through the idea, the rest of us could visualize the headline and the excitement but the business owner in question became more and more uncomfortable. What if everyone decided to take advantage of the guarantee? Studies have shown that the number of returns on products that are of reasonable quality is very low. In this case, working with hundreds of clients, there had been less than a handful of serious complaints, but the fear of a run of money back is a scary one when cash flow is tight (and cash flow is almost always tight!).
Now – think about your business, your products or services…do you offer (and highly publicize) a guarantee? If not, does it make you nervous to think about it?
Points to consider for a worthwhile guarantee
The best thing, in small businesses guarantees are often uncommon. If you’re feeling nervous, your competitors are feeling exactly the same way. If there aren’t many visible guarantees, then it’s a great way to stand out (and if there are a lot, you probably need one just to keep up).
Guarantees should be straightforward and have minimal fine print.
Guarantees should cover the results / outcome your customers are interested in the most (which may be different than what you’re selling) – see a great summary of what I mean in this article by Kevin Donlin on How to create a winning guarantee!
Your guarantee should be as specific as possible – ideally it should be something that can be measured objectively.
You don’t have to offer money back (although that’s probably the strongest position), you can also offer credits on future services, offer to make it right, etc. If you’re up for it, make it memorable – something that people will really talk about (which is really the point).
Make sure that if you do have to honor your guarantee that it’s cheerful and hassle free.
When you’re just getting started, test out different guarantees to see which one gets the most response.
Make sure your guarantee is in writing – and in fact, make a big deal out of it. You do great work, you’re standing behind it anyway – let people know and get more customers!
Start thinking guarantee!
Why go to all the trouble (and the perceived risk) of putting together a guarantee? Because you could substantially increase your business! Companies like L.L. Bean, Nordstrom or Eddie Bauer all had crazy growth – in large part of their no questions asked guaranteed return policy.
My client’s going to give it a try – let me know if you’d like an update once he’s given it a shot. I think it will be a big deal, but the proof will be in the results.
I offer ‘Risk Free’ coaching – if for any reason you aren’t happy with what we’re doing, you can get a full refund on your first month, no questions asked. I’ve considered some other ideas, but I haven’t landed on anything just yet.
Do you have a guarantee? Have you thought about creating one? I’d love to hear your thoughts or stories – share them in the comments below.
Shawn Kinkade Kansas City Business Coach