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Ready to get burned?
Ready to get burned?
Is there really one simple phrase that can boost your revenue by up to *60% -- and make your customers feel good?
Silly question, right?
Not so fast. Because it all comes down to whether you have the guts and intestinal fortitude to take on one word ' the same word that brings conversations with clients to a screeching halt. I'm serious. We can be talking about fun, energizing marketing ideas and as soon as I mention this one word the air is immediately sucked out of the room.
Big, strong men cower in fear from this one word. Some of the most vociferous people I've ever known clam up. And others are simply dumbfounded. It's a shame too because I've seen this one word dramatically turn around businesses of all kinds. I'll tell you what that one word is and how you can can take it head-on and drive up your sales in no time at all.
What's that one word?
It strikes fear in all types of business owners. Soon after we talk about the great ideas that come from the marketing we ask our clients, 'What's your guarantee?'
Silence ' crickets chirp ' frogs croak in the background ' you can even hear a fly buzzing through the air.
Then someone usually says' 'Well, we offer a 100% satisfaction guarantee.'
And I love this! It's often followed by, 'But we don't advertise that too much.'
'Okay, but doesn't everyone else in your market offer a money-back guarantee?' I ask.
'Yes, but we don't want to encourage people to return our products or try to burn us.'
'Yes, you do!' 'Huh? ' Are you nuts? ' Have you lost your mind Jon?' That's usually the reaction I get whenever I mention this idea, but if you're serious about growing your business and standing out from your competition with a big, bold promise ' you MUST offer a guarantee no one else can touch. Feel the excitement starting back up? Hold on'
Because to really understand just how powerful a guarantee can be to your business I have to tell you the story of one of our clients, Dr. Alvin Schamroth. He owns Exam Pro, a service offering OB/GYNs test prep courses for their board reviews which they must pass to receive certification.
He too got really excited about the marketing and then everything stopped when the conversation shifted to offering a guarantee. At first, he didn't want to offer any guarantee. Why? Because he was afraid it would wipe out his business. But as we looked at the numbers we found more than 90% of his students were passing the exams. Reluctantly, he agreed to a money-back guarantee. But everyone offers that!
We couldn't stop there. I kept pushing. What more can we offer? What can we offer that makes it virtually risk-free for the customer? Then it hit me ' A double your money-back guarantee! Silence. For a moment, I thought Dr. Schamroth was going to ask for his money back. He pushed back. I pushed back. He finally agreed to try it.
A typical prep course costs up to $1,000. If students went through the course and did all the work and didn't pass the boards he not only offered to give them back their $1,000 tuition fee but he also gave them another $1,000 and the opportunity to retake the class! Potentially, this could cost him tens of thousands of dollars if everyone took him up on his offer.
I'd love to tell you Dr. Schamroth was thrilled with this idea. But he wasn't. He was worried. He deserves a lot of credit, however, because he gave it a shot ' and he hasn't looked back!
He's written some checks to those who didn't pass but his business has also grown 60% since then. Why? Because he made it a no-brainer to do business with him. As a result, he's enjoyed more sales by offering a double your money back guarantee.
Does he get burned every now and then? Absolutely! It happens. Plan on it. I call it the 'burn factor.' It's like paying rent; it's a cost of doing business. A very small group of people WILL take advantage of you. Yet, you can rest assured that if you do offer a big, bold guarantee you'll dramatically increase sales and the refunds or returns will be a fraction of the cost.
To prove my point, let me ask you this question. What is the single biggest day for returns on big screen TVs? The day after the Super Bowl. That's right! People buy the biggest and best TVs they can find to host their Super Bowl parties and then return them Monday. But so many more keep the profitable merchandise that retailers still offer their guarantee.
On my last trip to Las Vegas while on business I had a meeting at Zappos and learned that they actually LOVE customers who take them up on their guarantee.
They have an average return rate of 35% and one group returns 50% of what they buy to the online retailer. That's crazy! That's one-third to half of everything they send out comes back. How would you like it if up to half of everything you sell comes back?!
But get this! Zappos wants more! Why? Because they've found that the 50% return group tend to purchase their most expensive shoes and clothes. The policy has helped the company win over high-paying customers who come back again and again thanks to its generous, well-publicized guarantee: Return any item within 365 days of delivery for any reason. Zappos even pays for the return shipping.
Since it costs the same to ship a $300 pair of Gucci shoes as it does to ship a $30 pair of pumps, the policy also helps Zappos boost its profit margins. 'Our best customers have the highest return rates,' says Craig Adkins, VP of services and operations at Zappos. 'But they are also the ones that spend the most money with us and are our most profitable customers.'
Here are more examples of some of the best big, bold guarantees that should inspire you'
From A.G. Russell Knives'
'We guarantee total satisfaction. You, the customer, decide what satisfaction is. You decide how long you are entitled to be satisfied. 'If you buy a knife and don't use it for ten years and when you do use it you want to return it, do so. If you think that a knife should provide good service for ten years and it only does so for seven years, tell us so. You are in charge of our guarantee.'
From L.L. Bean'
'Our products are guaranteed to give 100% satisfaction in every way. Return anything purchased from us at any time if it proves otherwise. We do not want you to have anything from L.L. Bean that is not completely satisfactory.'
Check out this one from Land's End...
Notice there are no asterisks or fine print in the guarantees. I call them weasel clauses.
They're the result of lawyers who are trying to weasel out of a promise. Clauses include:
... Not valid after 30 days.
...Does not cover material workmanship. (What does that mean?)
...Does not cover leaks, squeeks or rattles. (Check you vehicle's manufacturer warranty for that one!)
As soon as someone on your team starts trying to add exceptions to your guarantee, tell them to stop! Don't let them do it. Just one weasel clause can kill your big, bold promise. Don't try to hide from it. Embrace it. Don't worry if a few dim-wits take advantage of you. It will happen. I guarantee that ;)
Build the burn factor into your cost of doing business and then enjoy the windfalls from a guarantee that makes others want to do business with you.
1. Let's admit it. You're going to stand behind your business anyway so get some leverage out of it and offer a bold guarantee.
2. Scour your company and see what you can guarantee.
3. Build in a burn factor and assume some people will take advantage of your offer.
4. Live boldly and without the weasel clauses.
Got a guarantee you're proud of? Email it to me and tell me how it's helped your business.
Always taking you from where you are to where you want to go,
Jon Goldman, President