In my previous article ‘Does Your Business Have An Invisible Guarantee‘ you discovered the merits of introducing or improving your guarantee. Overall this has the benefit of reducing the risk to the buyer and elevating your business in the buyer’s eyes as a more premier supplier in the market.
There are many myths surrounding guarantees all revolving around the number of customers who would claim off it. History and testing has shown that on average 1-2% of customers may claim on a guarantee which is very low. It is very unlikely a business will go bust because of a guarantee unless of course they sell or provide inferior goods or services and are marketing as a superior offering. In situations like this, the supplier is clearly at fault. Why on earth try to sell inferior goods or services to a market that is demanding quality? It doesn’t make sense.
A rock-solid guarantee provides a prospect with the confidence that they are making a good buying decision. In the future they will not be left in a position whereby they ever regretted buying from you.
If you have made the decision that you need to improve your guarantee to provide additional confidence to a prospect and the market in general, how do you start?
Step 1 – Research
Research the market and note the length and/or type of guarantees that are currently on offer. Many will be time related, usually 30 day money-back although no doubt you will notice a few variations. Some will very flimsy and worthless e.g. “Satisfaction guaranteed.” This means absolutely nothing.
For good measure, research other industries, especially those that serve your target market. What guarantees are they offering?
You now have a good understanding what your prospect expects, good or bad.
Step 2 – Evaluate
The second stage is to evaluate your business.
- What are your strengths?
- What are you really good at?
- Do you hold the broadest range of stock?
- Are you the best for customer service?
- Do you dispatch faster than the competition?
- Do your products or services consistently provide great results for your customers?
- In other words in which area are you competitively strong?
- Have you built your marketing and reputation around this strength?
- If you do not have a strength, then how can you develop this now?
Let’s take a closer look at the industry again. What are customer’s biggest reasons for complaining? Maybe these complaints are not aimed at your business but they are generic in the industry. How can you combat these complaints and make this a strength?
At this stage you are now gathering a huge amount of data. Let’s continue…
The final part in step 2 is to understand the results that a customer wishes to achieve by using your product or service. What short, medium or long term problem are you solving? How many different results could this person achieve both directly and indirectly after using your product or service? Let’s take a look at say a finance service… By solving a customer’s financial problems this will create major changes for them. Firstly, they can move forward and build without having to take short cuts. The solution may also have the indirect benefit of reducing stress in the business owners and the impact this has had on them and their family. It may also mean they do not cut the workforce but can now look forward to expanding it. Cutting the workforce would have its own stresses and implications on the business owners but also the family lives of those who are released. You see, there are direct and indirect benefits.
Step 3 – Choose your guarantee penalty
If a customer has to claim on your guarantee you need it to hurt a little. This way you will do more to ensure it doesn’t happen again. Remember, only a small percentage of customers will ever claim on your guarantee.
Create a system to deal with complaints. Set up a rapid response team who will be all over the problem so fast it will shock the customer. Give them some power to solve the problem quickly and also provide the customer with something extra because they have been inconvenienced. The customer has been so disappointed that they have formerly complained. Usually this isn’t done lightly so it means the customer has worked themselves into a state. You must recognise this and do something to make that person feel better, especially as they should not be blamed for the failure of your product or service.
The more you wow a customer in troubled times the more likely they are to sing your praises and stay with you. Your penalty can therefore act in a good way rather than be seen as bad. Yes, it will cost you but in the long term it’s more likely going to be a huge selling point. This is turning an adverse situation into a marketing opportunity.
If you can turn a complaint into a testimonial, case study and opportunity to improve your business systems, the product or service itself, then this is a gift waiting to happen. Recognise there are a number of key steps here alone from understanding the type of complaint, training your team, systemising the response, personalising where necessary and following through on your promise. Finally, gathering the customer testimonial/case study at the end and turning it into a huge positive.
Step 4 – Test
Your guarantee is now art of your overall marketing strategy. With each element of marketing you need to test to ensure it is working. Before you launch the guarantee you should test it like you would an advert. Test small, gather feedback and then test against a second guarantee. Which guarantee is favoured most from the sample of customers you interviewed? Which example is driving sales up? E.g. your first test may have sample 1 as a 30 day guarantee whereas the second example may be 60 days.
Step 5 – Market
When you’ve tested a number of sample guarantees and the feedback provides you with a clear winner, the next stage is to get your marketing team to give it higher prominence in the marketing pieces they are sending out. Your guarantee could in time be stronger than your USP so take time to test and get it right. It could be that this is where you gain most competitive advantage.
You may be thinking that all of this work can easily be copied by your competitors. Perhaps. However, it is your business that captures the preeminent position in the market by being the first to introduce it. It is your business that has marketed this to the industry. Any response from the competition is a “me too” offering. It won’t have the heart, the system and the payback to match yours. It will be noticed which business offered this guarantee first and this changes your overall position in the market. Prospects and customers will perceive your business to offer more and most likely be seen as a leader in the market. This is a superb advantage in marketing terms.
You now have the steps to elevate your business in the market, create a significantly stronger message in the market and provide more confidence to prospects that your business is the one to trust. Take time to do this right and you will notice a shift over time in your favour. As buying confidence grows you may also find that the time is reduced from lead to sale. Wouldn’t that be nice!
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