"To make your offer even more irresistible you need to take all the risk out of the purchase. Remember, that people have a built-in fear that they are going to get ripped off. How many times have you purchased a product and got stuck with it because the merchant wouldn't give your money back?"
Excerpted and adapted from 12-Step Foolproof Sales Letter Template by David Frey
A while back, a client relayed one photographer's perspective on guarantees: "Make it long enough that they'll forget to use it. Give them five days, and they'll immediately return it lest they regret their purchase and lose their money. Give them five years, and they'll long forget about ever returning it." Give your customer time to hang your picture on their wall, receive a compliment or two, and get some matching decorations. As Frey says, take the risk out of the purchase.
Let your customer focus on the rewards of the purchase, not the potential loss.
I once sold a bow to a friend. The friend was unsure about making the purchase so I lent it to him, arrows and all, to try out. Although the strings were attached, there were no strings attached if you know what I mean. He took it to an archery range, fell in love, and bought it.
If I had tried to force the purchase decision, he would have declined for fear of wasting money on a bow he did not like.
Example Guarantees
Here are some example guarantees from some well-known companies:
- La-Z-Boy: "The famous La-Z-Boy limited warranty" which covers parts (from one-year to lifetime) and labor (one-year on non-decorative pieces)
- REI: 100% satisfaction guaranteed (one-year) (previously: lifetime satisfaction guarantee)
- Cutco: A 15-day unconditional money-back guarantee + "The Forever Guarantee" which covers performance forever, sharpness forever, and 50% misuse/abuse replacement cost
- Costco: 100% satisfaction guaranteed (90-days on electronics)
- Pampered Chef: Minimum one-year guarantee
- Zappos: Free returns, including coverage for shipping
- Craftsman: Failed hand tools repaired or replaced free of charge
- Hyundai: "Assurance: America's Best Warranty" which provides powertrain coverage for 10-years/100,000-miles, plus industry-leading new vehicle and anti-perforation coverage
- Starbucks: Free drink coupons if your wait for a drink is too long or your drink was made incorrectly
Guarantees Shift Risk From Your Customer To You
I have specifically purchased many products from REI because of their now-defunct lifetime guarantee. I was not aware that they had scaled back their policy from lifetime to one-year prior to writing this article. This change will affect my future purchasing decisions. It remains to be seen if it will also affect their product quality.
Someone has to take on the transaction risk: you or your customer. If you take it on and stand behind your business, it does two things: (1) takes the risk off your customer, making it easier for them to purchase, and (2) makes you buckle down and live up the standard you set.
REI's policy change has now taken risk off them and put it on us. This is not meant to be an attack on REI. It is just an example of how your guarantee shifts the purchase risk.
Power Guarantees
"If (your guarantee) doesn't make your stomache churn (as the owner), it's probably not an awesome guarantee," Perry Marshall says in 80/20 Sales and Marketing. He calls these types of guarantees "power guarantees" and looks at them as marketing. They should set you apart from and above your competition.
This might be a bit counter-intuitive at first. You might think, But if I offer a crazy guarantee then people will just take advantage of it! This is definitely something to consider. Some companies have recently scaled back their return policies, supposedly because of consumers taking advantage of them. However, there are gains to be had. The potential payout costs are just a marketing expense. If the revenue gains beat the payouts, you win. And you will most likely see revenue gains if your guarantee sets you above your competition and makes everyone go "Whoa!"
A few takeaways from Marshall's 80/20 Sales and Marketing:
- Sell solutions, not components
- Sell results, not procedures
- Guarantee better results than anyone else, and then make sure you deliver
- Sell only to qualified customers
- Turn your power guarantee into a power unique selling proposition using this formula: "If you are [qualifying type of customer or company] and if you [commit X dollars and follow steps Y and Z], then you will achieve [specific results] or else [penalty to me, your vendor]."
There are some power guarantees in the list of examples above.
A guarantee is something Inquisitek needs to further develop. Although I have a personal commitment to guaranteeing our work -- if we have done work for you and you are not satisfied, let me know -- we need to put this in writing as an official policy and get it out there.
How about you?
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