Recently, I bought a pair of running shoes online. Usually I buy my shoes at a sporting goods store so I can try them on and maybe take a lap around the showroom and see how they feel. But I tried something new because the website offered me a guarantee.
I had 30 days to return the shoes and get my money back. Not the right size? Refund. Don’t like the color? Refund. Decide you’re really not that into running after all? Refund. I literally said, “What have I got to lose?” By offering me a guarantee, that company took away any thought of risk I had associated with altering my normal behavior. Any marketing professional worth his retainer will tell you that altering the behavior of the customer is the holy grail.
A guarantee is a powerful tool. Not enough businesses use them to their advantage. If you’re a reputable business, you’re going to stand behind your product or service anyway. I mean if you sell a widget to a customer and he or she absolutely hates it, you’re going to give them a refund, right?
So take advantage of that. Let people know from the beginning that they can do business with you without risk. Now, I hear you saying, “Wait a minute, I don’t want people scamming me. What’s to stop a customer from deciding to just not pay?” Well, I won’t say it never happens, but in 20 years of business it hasn’t happened to me. If it did, though, it would be worth it for all the times someone saw that guarantee, pulled the trigger, and then became a loyal customer. They far outnumber the bad seeds and this way the system helps weed out customers and clients you don’t really want to do business with.
- A money-back guarantee gets more people through the door. The more people who see your business and say, “What have I got to lose?”, the better.
- You keep those customers coming back by offering a quality experience. I ended up returning the shoes. The company took great pains to make it easy for me. The shoes came with a pre-paid return shipping label already in the box. Sure, they had to pay some shipping costs on a pair of shoes, but now when I’m buying shoes, I’m going to go there first.
- It keeps you competitive by keeping you on your toes. If every customer has the potential to walk away, then you have to focus your attention on quality and service. Customers who prioritize quality and service are golden, because they recognize the unique value you add to your business. They can be your most loyal and lucrative customers and all they really need is a guarantee.
The bottom line is that every good company is going to do right by its customers. But not all customers are adept at recognizing a good company from a bad one. Putting a money-back guarantee out front lets them know you’re one of the good ones and, even if it doesn’t work out, you’re both dealing in good faith. You’ll see the good customers stay and the bad ones move on. I guarantee it.
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As the founder of Petra Coach, Andy Bailey can cut through organizational BS faster than a hot knife through butter, showing organizations the logjams thwarting their success and coaching them past the excuses we all use to avoid doing what needs to be done. Andy learned how to build great organizations by building a great business, which he started in college, then grew into an Inc. 500 multi-million dollar national company that he successfully sold and exited. He founded Petra to pass on to other entrepreneurs, business owners, and leaders the principles and practices he used to build his successful enterprise, which are rooted in the Rockefeller Habits methodology. Andy currently serves as president of the EO Nashville Chapter, named one of the fastest growing EO chapters in the world. He is a two-time finalist for Nashville Executive of the Year and has been honored as Nashville’s Volunteer of the Year.