A guarantee builds customer trust and lends credibility to your company. But how do you actually write a guarantee that works?
Most people think guarantee policies are just more complicated refund policies. It can be a frightening undertaking for a business, but the benefit gained from a guarantee far outweighs the risk involved.
Let’s go over how you can write a guarantee to boost sales and company reputation.
Do Guarantees Really Work?
Yes, they do.
They Address Audience Concerns
Buyers feel a lot of anxiety when purchasing a product. This is especially true if they are considering business with a company with which they have no past experience.
A guarantee is an effective method for assuaging a buyer’s fears. You can use it to address specific concerns about your product, service, or business. When you write a guarantee try to put yourself in the mind of a potential customer and consider what areas of your business might raise red flags.
The average customer will see a guarantee as a seal of credibility. For a skeptical buyer, an ironclad, low-restriction guarantee is a sign of your faith in the company’s product or service.
The Different Types of Guarantees
There are three things you can guarantee:
- Guaranteeing a Product
You can write a guarantee promising a customer they will be happy with your product. These guarantees are most common for businesses delivering long-lasting items a customer will use repeatedly.
Only use this guarantee if you have the utmost faith in your product. When attached to a worthwhile product it will increase sales with minimum risk, but attached to a shoddy one the extra money won’t be able to offset the losses from refunds.
- Guaranteeing Your Service
You can write a guarantee promising a customer will love your service. Perhaps most obviously, the service industry relies heavily on this form of guarantee.
Most businesses are afraid to use this guarantee. A service can’t be inspected before and after purchase for faults or failures like a product. People provide service and people receive service, meaning whether a company takes a loss is entirely in the hands of the employees and customers.
Surprisingly though not only do service guarantees benefit a business, but unconditional service guarantees can greatly increase a company’s effectiveness, the number of returning clients, and customer satisfaction.
- Guaranteeing Results
Finally, you can write a guarantee that customers will see results from their purchase. These are most useful when results are more important than the product or service. Good examples are fitness, health, and work-from-home businesses.
It’s important not to commit yourself to a guaranteed result if you can’t deliver. For instance, you might think investment businesses would benefit from a result guarantee, but the general industry consensus is to never use them. Because of the increased risk with investment firms, the chances it will harm rather than help a company are too high to make a guarantee.
How to Write a Guarantee That Converts
- Keep it simple. The more complicated your guarantee is the less likely a customer is to see it as a benefit. The easiest to understand and communicate guarantees are the ones that reel in new and return buyers.
- Reduce limits and restrictions. Avoid getting bogged down in conditions and restrictions. The more hoops a customer has to jump through to collect their refund, the less appealing a guarantee becomes.
- Highlight the guarantee with design. Your guarantee is one of your best selling points to a customer, so make sure they see it! Wherever you’re advertising (product webpages, television ads, etc.) make your guarantee easily recognizable with a seal or other design to draw the eye. Even if you can’t fit in all the details, the word “guarantee” alone can increase the chances of gaining a new customer.
- State what happens next. Let people know what you plan to do should they be unhappy with their purchase. Do you provide a refund? Can they cancel the service immediately? Clearly lay out the next steps to give the customer a good sense of what the guarantee provides.
- Provide a fair timeframe. If your guarantee is only valid for a specific amount of time, make sure it is long enough for the buyer to try out their purchase. The more time you give them, the less pressure they feel to quickly decide whether to invoke the guarantee policy.
Here are three examples of guarantees:
Money Back Guarantee
Money back guarantees are one of the best ways to give potential customers a sense of security. Also known as satisfaction guarantees, they promise a refund of the buyer’s money if they aren’t satisfied with their purchase. A great example of this is CostCo’s membership guarantee.
A money back guarantee is extremely useful for fledgling businesses. If customers feel they have a recourse should the new store or product not live up to their expectations, they’ll be more likely to give it a try. After all, it’s a win-win situation for them.
While the average guarantee extends for 30-day or 90-day periods, if you really want to display how much faith you have in your product you should consider using a lifetime guarantee. This is especially true in the case of products which will be used for years, such as suitcases and other luggage. Osprey’s “Almighty Guarantee” shows how impressive these can look to a customer.
Free Trial Guarantee
Increasingly common in today’s market is the free trial guarantee. It allows customers to take a product or service for a spin before deciding whether they want to purchase. Most online products and services incorporate a free trial and there are extensive lists and reviews of the best ones available.
This guarantee is one of the best for reducing risk on both sides of the transaction. The customer can experiment and test out the product or service to their heart’s content and the company doesn’t risk taking a major loss on the service if they choose not to purchase.
A guarantee is one of the best ways to increase sales and bring more customers to your business. While there can be a bit of risk involved, a guarantee will almost always benefit the company in the long run if implemented correctly.
Can a Guarantee Put My Company at Risk?
Yes, when you write a guarantee into your company policies you are accepting an amount of risk. There is always the potential of customers abusing your guarantee policy.
For what risks you take on though, you’ll see a larger number of benefits. Making a good business requires building trust and transparency with customers. There is no better way to do so than with a guarantee.
What is a Guarantee Policy?
A guarantee policy is a promise written into the service or product delivered by a company that the customer will be satisfied with their purchase. If they are not, then the policy presents an option for recompense.