Consider this fundamental point in business; whenever a customer makes a purchase, they take a risk that the product or service will work. It’s happened to all of us: you buy an awesome string vest that you think is going to look great the next time you hit the gym. Then you try it on again when you get home and…not so much. It’s those bloody trick mirrors they use in the shop! Sorry, personal experience.

When you think about it logically, the fact that they’re taking a risk must hamper the decision-making process. In a lot of cases, it must put off the decision. The product or service never gets bought by that customer.

So fundamentally then, we’re suggesting that when a business removes the risk from the customer (that is, when it’s clear there is absolutely no risk to the customer in investing in the product or service) the business will gain more customers.

That is a simple proposition, isn’t it? As we all know, Business – Risk = Xtreme £££, right?

But simple as it actually is, it raises all sorts of questions. Questions like:

  • how do you articulate the guarantee?
  • how do you develop systems to cope with it?
  • won’t clients or customers take advantage of the guarantee?
  • exactly what should you guarantee?
  • why didn’t we put an “e” in the word extreme back there?

Most guarantees you see in the marketplace have little power. They have what one person called “weasel wording.” They don’t work. They do nothing.

(The preceding was not meant to offend weasels in any way.)

How you articulate guarantees can have an enormous effect on their power. Consider this as an example — a standard guarantee might be to offer customers their money back if they return the product within 30 days. A stronger guarantee would be to let them try your product for free, billing them only after 30 days has expired.

Now before you raise your hands up in the air and say, “We couldn’t do that!”, please calm down. It was just a hypothetical. Calmly lower your hands. Thank you. Let me also mention that you may not be able to do that. That’s not the point of our discussion here. The point of the discussion is to give you information in a particular way and then have you apply it in YOUR way to your business and in a DIFFERENT way perhaps for your selected clients. GOT IT??? Good.

Will customers take advantage of you when you offer a strong guarantee? A few will, but the money you lose on those customers is a tiny fraction of the increased sales you’ll experience by offering the guarantee in the first place.

You can go even further than simply “removing the risk” (remember? the title of this article?) by having what’s called a “better-than-risk-free” guarantee.

This is one of the most powerful forms of guarantees lifting market share. For years, it was kept under wraps, as it was too powerful for mortal hands. Or so the legend goes.
Here’s how it works:

In addition to the usual money-back guarantee, the customer is offered free bonuses, which they’ll receive along with the product. Ideally, these bonuses cost very little, but have high perceived value (for example, special reports).

The “better-than-risk-free” offer is this: The customer gets to keep the bonuses even if they return the product.

“Wait, what?”, you may ask. Once again, please calm down. And lower your hands. We’re keeping an eye on you.

Such a guarantee could be phrased like this: “These bonuses are worth more than £££, so even if you decide to get your money back, you’ll be £££ ahead just for trying our product.”

Stated that way, it’s almost irresistible, isn’t it?

The answer is yes. But we would also accept “yeah”, “yup” and “yeeeeeeehaww!!!!”

Guarantees have the power to attract attention in the marketplace and that’s particularly true when you link guarantees with key frustrations.
Consider the case of this international freight forwarding company. Clearly, the marketplace is crowded and many people are undercutting their competitors. The typical sales call is, “Who are you using? What are you paying? I’ll beat their price.”

But, the company did it differently and became incredibly successful. The owner of the company discovered (not surprisingly) that clients’ key frustrations were that promises of delivery dates were seldom met.

So her offer became this — your package will arrive when we say it will. If it doesn’t, we will see it as our fault even if it may be caused by circumstances out of our control (like pirates). We’ll apologise AND carry the next three months freight for you free of charge. And we’ll record an hour-long voicemail message of our entire staff saying “we’re sorry” over and over again. OK, maybe not that last one.

And, in case you’re thinking they’d go broke, think again. Their business is booming. They’ve got big offices with executive washrooms that use those really fancy soaps.

Did they offer this guarantee to all their customers? No. They used it powerfully to attract those potential customers that would have a significant lifetime value to the company. They used the guarantee as an offer knowing a) that they could do it anyway, and b) that having the guarantee in place would force them to develop systems to make sure it worked.

Let’s look at the specific things a guarantee should have:

  1. It must be specific. That is, the customer must understand exactly what will happen if you don’t deliver on the promise you’ve made.
  2. It must be blatant — I would even say outrageously blatant. For example, a hotel put it this way: “If, when you get into your room, it isn’t the cleanest hotel room you’ve ever checked into, the first night’s stay is on us.”
  3. Link your guarantee into key frustrations. That doesn’t need any more explanation, right? Fine, we’ll explain a bit more.

Here are some additional thoughts you might want to consider in building your guarantee:

Unconditional: Guarantee everything under your control. By everything, we don’t mean the product necessarily. We mean the process. For example, you can guarantee timely delivery or some other part of the process, which may be important to the customer.

Unique: Promise customers something they don’t expect. For example, every builder guarantees their work. But, how many do you know who will guarantee arrival time? How many do you know who will guarantee prompt clean up? For example, a carpet cleaner should not guarantee clean carpet — the customer expects that. Maybe they could guarantee that the furniture will be rearranged to the customers’ total satisfaction. You see, that goes beyond what customers expect.

Financially meaningful: Although full refunds may not be practical, you must still build a meaningful guarantee with commitment.

Simple: Ideally, the guarantee should be simple to understand. For instance, “speedy service” means nothing. A guarantee like, “Your meal will be on your table in ten minutes or it’s on us,” is so much better. Or “your meal will be delivered by a person singing Adele covers to you”. Actually, go with the ten minutes option. Now, if you’ll excuse us, all this talk of meals is getting us hungry. Let’s wrap this up and get some macros in me.

Easy and Quick: It should be easy for the customer to collect. They should not have to beg or otherwise prove to you that you were wrong. Pay-out should be immediate. OK, that wraps it up. Lunch time!

For more information contact Danny Evans at or on 0161 703 2500.