There’s an old joke that you should never buy a manure spreader from a farm implement dealer because they won’t stand behind the product.
While this is a joke, many consumers may habitually patronize your competitor because of the perceived risk in doing business with you. They are asking themselves; “ Will you stand behind what you sell? What do you stand for? Will you treat me fairly? Will you really deliver what your advertising promises?”
Offering an iron clad guarantee can dramatically reduce any perceived risks and increase your new customer count and your closing ratios. Honoring those guarantees also increases the amount of word of mouth advertising you receive!
Dominos Pizza built their business with guaranteed fast delivery…“delivered in 20 minutes or it’s free.”
A benchmark guarantee is the one offered by Lands’ End — “If you’re not satisfied with any item, simply return it to us at any time for an exchange or refund of its purchase price. We mean every word of it. Whatever. Whenever. Always. But to make sure this is perfectly clear, we’ve decided to simplify it further. Guaranteed. Period.”
Some businesses fear promoting their guarantees because they think they may lose money if customers abuse them.
In reality, less than 3% of consumers abuse guarantees, refunds and return policies. A marketing investment of less than 3% is a very realistic marketing expense especially if it creates a trust and comfort level which results in customers buying from you instead of your competitors.