Make More Sales And Protect Your Business With A Guarantee
January 4, 2008
Does your business offer a guarantee on your product or service? If it doesn’t, you need to start offering a guarantee now.
Offering a guarantee not only helps you make sales - it also protects you business.
It helps you make sales because: There is less risk to your customer in buying from you. If something goes wrong within the time limit of the guarantee, they know you will put it right. So they feel safer buying from you.
It protects your business because: You have guaranteed to resolve the problem if the customer is unhappy. So they can’t demand a refund, or refuse to pay altogether without allowing you to put things right first.
This comes in really useful when you encounter the type of customer who will do anything to get out of paying.
What to put in your guarantee: Our guarantee looks more like a contract - but you should always use the word guarantee, as the word “contract” can be a real turn off to the customer.
Obviously - the wording will depend on your type of business, but it is essential to include the following:
Always put in a time limit: Your time limit will depend on the shelf life of what you’re offering - but make it a decent one. Twelve months is likely to give the customer more peace of mind than 10 days.
Guarantee to put things right: This is important - don’t just offer a refund or some people would have you do £10,000 worth of work, then demand a refund because they weren’t happy with a small aspect of the work carried out.
State how quickly you will deal with the problem: The customer will take your guarantee more seriously if you state how quickly you will deal with a problem. For example - we promise to go back out to a customer on the day they call.
Put limits on the guarantee: State that the customer needs to call you as soon as they realise there is a problem and also, that they will not allow anyone else to fix the problem first. This part is extremely important, as a third party could cause far more damage and you don’t want to be compensating for this.
Get a signature: As well as putting your signature on the guarantee, get them to sign too, then it forms a contract. We have had the odd customer refuse to do this, but we politely explain that we can’t carry out any work without it.
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Great point on the guarenttee. In the US if you guarentee a product you are supposed to hold parts for that product 2x the warrantee!
“Put limits on the guarantee: State that the customer needs to call you as soon as they realise there is a problem and also, that they will not allow anyone else to fix the problem first. This part is extremely important, as a third party could cause far more damage and you don’t want to be compensating for this.”
I can imagine this would be especially important with plumbing. Good points in all.
I didn’t offer a guarantee, but I did a little correction work for a recent freelance client because I realized that I hadn’t done as good a job for her on one section. On my own time.
Hi Catherine,
Based on the type of work we do, our contract states that our work is warranted for one year from the date of completion. Having it in writing has helped, as we have had a few customers call two or more years later-and often, they have done modifications and then wanted us to fix their mistake(s).
A lot of our work is also being inspected by our city or county government inspectors. They won’t let us proceed until it is done to their specifications, so that gives us another layer of protection.
We recently had a customer call on a job we did five years ago on a sewer pump we had installed. (We had originally done the work for the builder/general contractor.) Although his problem may have been covered by his home owners warranty, the builder had ignored his calls for awhile, and then finally told him to call us as we had installed it.
The homeowner understood we were no longer liable, but we did take a look at his problem (it was an electrical issue) and then we recommended a company to him.
I think a lot of times you can also gain great PR by trying to help a past client fix their problem, and not charging them for your advice.
Money-back guarantees are interesting. Common sense dictates that some people will take advantage. And you are absolutely correct.
We let people trial us for 90 days, and at the end, if they are unhappy for any reason they can claim a full refund.
Many business owners understandably will recall the odd nightmare client they have had and imagine gaining clients that will invoke this clause.
While nobody has yet done this, I expect it will happen.
But why am I not worried?
Basically because I don’t like nightmare clients. Most decent human beings will want to build a trusting long term relationship with their suppliers.
Those who don’t, I want rid of quickly. And this guarantee gives us the means to do so with a clean break.
Now it becomes a case of mathematics.
How many people will we have to refund?
How much more business will we gain as a result of this guarantee?
Will this more than compensate for the minority who invoke the guarantee?
Will this help us win better clients longer term?
In our business, many of our rivals have 12 month contracts. But why? If a client wants to leave for whatever reason, what do we really gain by insisting they reluctantly stay and pay us for the remainder?
Clients rarely leave, but it does happen - mainly when we were growing and making mistakes.
And I’ve bent over backwards to help them leave easily. In one case meeting the new supplier for a drink and doing a detailed handover to make sure the client was well supported by the new company.
Isn’t that better? The exiting client leaves with a good impression which helps repair the relationship that was damaged.
And do you know what? On two occasions, the grass wasn’t greener on the other side of the fence. And because we had a good exit from the relationship, they came back when it didn’t work out with the new supplier.
I still meet, talk to and socialise with many of our former clients and have a positive relationship.
Often it’s the case that business owners view guarantees and contracts through the wrong end of the binoculars so to speak.
There is definitely opportunity in easing the terms for clients which can work positively and certainly differentiate you from the competition.
Mrs M - for freelancing a guarantee would be good. But, I suppose many publications already have their own contracts and also state their terms in their writers guidelines.
A few years ago, I did some work for a small newspaper and one of their employees not only stole my byline, but also tried to sell the work to a national magazine. A guarantee would have been useful then. But, I should imagine that most publications wouldn’t try to steal your work.
Barbara - that is so true. People really appreciate advice on small jobs and it’s a win, win situation, as they’ll still use you for the bigger jobs and recommend you to others.
Ian the type of guarantee you offer is brilliant in your industry. I only wish you covered our area.
In my experience, it is the companies who offer terrible service standards that usually try to tie you into long contracts.
I can think of 3 companies who have tied us in for 2 or 3 years, then given terrible service.
I don’t know if you’ve heard of Minor Planet - but they’re the worst offenders. I really don’t understand how they’re still in business.
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