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Poor Guarantees

People need to know that you stand behind what you sell. If you fail to provide a good guarantee, or worse, refuse to honor it, people will be reluctant to trust you, and you'll lose sales.

A guarantee with some teeth in it can make a huge difference in both customer acquisition, and customer retention. It signals right up front that you are willing to stand behind what you sell.

Lack of a guarantee is just the opposite. It indicates that you expect the customer to assume all the risk. In this world of rampant scams, identity theft, and faceless transactions, lack of a guarantee, or a poor guarantee just leaves your customers wondering whether you'll be there if something isn't right.

A poor guarantee is any guarantee that lacks at least an equal division of risk. If your guarantee has limits to it, that the customer can logically understand, then it will still give them confidence. But if it fails to make sense to them, or leaves them feeling that they are taking on the larger portion of risk in the transaction, they'll bolt.

I often guarantee things in a way that limits my risk, but that also limits the customer's risk. I offer a satisfaction guarantee on web design services, by breaking the design process into phases. Payment is due at the end of the phase, and if the customer is not satisfied, then they do not owe the money - but they cannot legally use anything they have not paid for either. By breaking it into phases, I limit the amount of time I'll risk before payment comes in, while still allowing the client to feel that they have the ultimate say-so on the design process. This guarantee is not only stated, but the entire design process is structured to support it, giving it the power it needs to persuade my clients that their satisfaction really is important to me.

I offered money back guarantees on other items as well, but sometimes they were a "no doa" warranty (it won't be dead on arrival - common for used items), or that problems had to be reported within a certain time limit due to perishability of product. Those guarantees were limited due to special circumstances, which the customer could understand the reasoning for.

Guarantees which are honored only by exchange, or by store credit may be considered less valuable by many customers. They are acceptable for some industries, but not for others. And if personal preference is a big issue with your industry, they won't work well, because people won't want a guarantee that might stick them with choices that they don't have any interest in. For media though, exchange guarantees are perfectly reasonable, and expected within that product arena.

Give them a guarantee that helps them to know that if they are not satisfied, that you will truly make it right. And then honor it even if you aren't fully in the wrong. Because one dissatisfied customer can cost you much more than just one lost sale.