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Does Your Business Have An Invisible Guarantee?

Invisible business guaranteeI am often asked by entrepreneurs how they can make their product or service more attractive in their marketing. There are of course numerous ways to achieve this such as changing the design of the page or advert.

One of the most often overlooked areas in marketing to make a product or service or attractive is the psychology of the purchase decision itself.

Here’s the problem…

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Consider this. Think back to a time when you really wanted something and were set on buying it. At the last minute you changed your mind because something wasn’t right. Can you recall such a time? Hold that thought…

Now think of a time when you weren’t too bothered about a purchase and yet you went ahead and still bought it. Perhaps you were in a store and made an impulse purchase. This happens often, especially in supermarkets.

You now have two scenarios. Can you recall the thoughts in your mind for each transaction?

Here’s what tends to happen when you are making buying decisions… first of all you buy on emotion and then justify with logic. Many purchasing decisions we make are for things we want and don’t necessarily need. That’s why there are the two different elements to the psychology in any transaction.

In the first scenario earlier, what happened that changed your mind from a certain buyer to a maybe or even a definite no? Was it something the seller said? Was it a review that you didn’t like? Was it that element of doubt regarding the actual purchase itself and whether you really needed the item? Did that doubt heighten from a mere question to a series of justifiable responses to convince you the purchase wasn’t right for you?

With impulse purchases we generally leave the store before we have the chance to re-evaluate our decision. Very often buyer’s remorse raises its head later and at that time we are too far away from the store and cannot be bothered returning the item.

How does this enhance your product or service?

Whenever two people enter into a transaction, one of them assumes most of the risk. This is usually the buyer. The risk could be one of the following…

  1. Making the wrong decision
  2. Not being satisfied with the quality or result they get from using the product
  3. Afraid of losing money
  4. Not receiving what they paid for.

In each case the buyer has a fear that they cannot recoup their investment in the product. These are definite barriers to any purchase and therefore need to be addressed if you wish to enhance your product in the eyes of the buyer.

One of the best marketing strategies to decrease this risk is to offer a cast-iron guarantee. This guarantee offers the buyer increased protection and provides them with greater confidence in the suppler of the product/service. As a supplier, you would not wish to take money from a prospect if they were unsatisfied with your product or service and it failed to provide the results you promised in your marketing. So, the guarantee performs two functions…

1)      Reduces the risk for the purchaser which means they are more likely to buy from you.

2)      As a supplier you work harder to ensure that your products or services live up to your marketing. This provides you and your team with greater certainty that you can deliver for a prospect or customer.

Your marketing message and guarantee combined should provide a compelling reason why a prospect should buy from you today and not feel bad about their purchase later. A good guarantee increases trust and this is vital considering the level of competition.

One of the areas you can strengthen your marketing message is to review your competition and the guarantee they offer. How can you improve on this and make your guarantee stand out?

Let’s take a quick look at an example. You sell a product which typically has a guarantee for 30 days. You increase the guarantee from 30 days to 60 or even 90 days. What does that say to a prospect? Of course, it says you have more trust and/or confidence in this product to offer such a guarantee. They also wonder whether you know something the other sellers don’t. Are you selling an improved version? I’m sure you can think of a few more. However, the important factor here is that a prospect is more likely to buy from you.


The big dilemma…

Many businesses shy away from making strong guarantees because they consider a high percentage of customers will call on the guarantee. This has been studied over the years and proven to be false. In fact it’s accepted that 1-2% of customers will ever take up a guarantee. Think about it…

How many of your customers have either:

1)      Complained to you about your products or services in the last month

2)      What about in the last year?

3)      How many have asked for their money back or for replacement goods or to re-do the service?

My guess is you have received very few of either. If your products or services are high quality then the number will be extremely low. Increasing your guarantee will not impact on your numbers. However, if your products or services are mediocre then you need to focus your attention on raising the bar first.

Do you have an invisible guarantee?

If you don’t offer a guarantee at the moment, what happens when a customer complains? Do you ignore them or do you listen and fix the problem. Most businesses will do what they can to fix the problem. Isn’t this the same as having a guarantee, only you haven’t told your customer about it? I can’t imagine for one minute you would simply turn your back on a customer and leave them with bad feelings and allow them to spread bad news about your business. So, by fixing the problem you have demonstrated you already have an invisible guarantee.

Summary

It seems obvious, but if you already have an invisible guarantee then why not improve it and make it public as part of your marketing? As I said earlier, this has the benefit of providing a greater degree of trust towards your business above the competition.

Take a good look at the market and decide how you can provide a guarantee that sets your business head and shoulders above the competition. How are you going to convey this to the market so it stands out? Make your team aware and ensure they are fully trained to reduce the chances of a customer calling on the guarantee. If and when they do, act fast and amaze them. This kind of service always tips the balance in your favour.

In my next article I’ll be sharing with you ways to build a rock-solid guarantee.

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