I Guarantee It!

By Ron Rosenberg

I remember one of those TV “celebrity chefs” a while back named Justin Wilson. His nickname was “The Cookin’ Cajun” and he spoke with a very heavy Cajun accent. His trademark phrase was “I guarantee it!” Which sounded more like,  “I gah-ruhn-tee it.” (Click here to see for yourself!)

And while this was mostly part of his persona, there’s something to be said about guaranteeing any product or service that you offer, and we're going to take a closer look at the reasons why this is so important, and examine the different types of guarantees that you can provide.

Why Guarantees Work

It’s easy to say that guarantees work – there are countless examples of businesses that have increased sales by the simple addition of even the most basic guarantee. But let’s take a closer look at why this is.

Lower Resistance to Make the Sale - You'll generally find that most people will consider your offer, not with the intent of accepting it, but rather to find reasons to reject it. Everything you can do to overcome an objection removes yet another roadblock for them and ultimately leaves them a clear path to accept what you’re offering. Guarantees are the ultimate step in this process because they reassure the prospect that if you fail to deliver on your promise, they have some recourse that will be quick, easy, and painless.

Risk Reversal - Effective guarantees do one more truly important thing: they reverse the risk, meaning that you, as the supplier, have more at stake than the customer, client, or member actually making the purchase.

The Better-Than-Risk-Free Guarantee

A basic “risk-free” guarantee might say something like:

“If you’re not satisfied with your membership for any reason, we’ll make it right or give you a full refund.”

The problem with a guarantee like this one is that it’s really nothing more than what any business should offer. There’s nothing really special about it, except in regards to the “for any reason” part. From my customer-service background, I fully expect that if a vendor fails to deliver on their product or service, they should make it right or refund my money.

As an example, Best Buy, where I bought my laptop computer, offers a Platinum Service Plan. It’s fairly expensive, but guarantees a five-business-day turnaround on repairs and offers the option of dropping the computer off at a Best Buy store, or having a special box delivered to you overnight so you can send the computer from your home or office.

In the event Best Buy fails to make the specific advertised turnaround time, they send you a gift card for the difference between the Platinum plan and the normal plan, around $200. This seems fair…even to me!

But when you have to spend upwards of three hours trying to get the computer repaired – for the second time in ten days – and get misleading, conflicting, and incorrect information throughout the process, then there should be some additional compensation for your wasted time and effort.

The problem is that most companies, businesses, and associations put the responsibility on the customer or member, and only agree to do “something extra” when they have no other option.

Instead, think about how you can be proactive and offer some kind of outrageously generous guarantee where you appear to take all the risk for the transaction, not the prospective customer.

So what's better than a "risk-free guarantee"? How about something like...

“Double Your Money Back”

This is a better-than-risk-free guarantee frequently used in many supermarkets for their “private label” brands. You know, the Hannaford-brand canned pineapples instead of the DelMonte brand. Here is the actual guarantee from Hannaford:

“Our quality guarantee: you'll love all our store brand foods and products, or we'll double your money back!”

There may be some alarm bells going off in your head right now, particularly if you’re working out the numbers in your head. If so, you’re probably thinking about a scenario where a customer buys five cartloads of food for $1,000; goes out to the parking lot; and then goes right back into the store, claims dissatisfaction, and demands $2,000.

Fortunately, this almost never happens in practice, and we’ll explore this in more detail just ahead.

…Plus $$$ for Wasting Your Time

Another powerful guarantee is the “Full Refund, Plus…” type, where you offer not only a full refund of the purchase price, but something else of tangible value to thank the person for taking the risk.

As an example, most professional and trade associations hold an annual event of some kind. They may even promote several big events throughout the year, and maybe even a whole collection of smaller “niche” events depending on the size of the organization.

But registration to these events almost never comes with a guarantee.

So try this on for size: include a guarantee like this in your marketing communications for an upcoming event; let’s say it’s a three-day conference:

“Attend XYZ’s 30th Annual Conference & Expo in San Diego. If by noon of the second day you haven’t gotten at least five specific ideas that will help you grow your business, find any member of the XYZ team who will cheerfully refund your entire registration fee…and give you $150 to cover the cost of your airline’s change fee so you can go home early.”

I should point out that when I share this idea with audiences of association executives and staff, they always get very “panicky” looks on their faces – as if they’ve just seen a ghost. Normally one of them will blurt out, “Um, we could never do anything like that.” “Why not?” I ask. “Because we’d have to give back lots of refunds!”

My answer? “Then your conference sucks!”

After the predictable stages of shock and laughter, you'll see the final disturbing realization on their faces that I might actually be right.

Look if you can’t guarantee it, then you shouldn’t sell it. Whatever “it” is. Period. Membership in your association, products you produce, services you offer – if you can’t guarantee it, you shouldn’t sell it.

While we’re on the topic of guaranteeing events, I personally know of several non-association businesses that promote “boot-camp” type events and have guarantees like these:

“Attend the event through the end of Day 2. If you don’t think this is without exception the best opportunity you’ll ever have to learn the hidden secrets of making money in the X business, we’ll refund your money on the spot and you get to keep all the program materials – including the giant 500-page manual!”

“If at the end of this two-day seminar you don’t have ideas that you know will make you at least $50,000 in the next 12 months, we’ll refund your entire registration fee and reimburse you for all your hotel and travel expenses up to $1,000. We’re that confident in our outstanding lineup of industry experts!”

And you can apply this strategy to virtually any aspect of your business ; you’re limited only by your imagination. And one other thing…

The Economics of Guarantees

There are two sides to viewing the economics of these kinds of guarantees. The worst-case scenario goes something like this:

“We have 3,500 people at our event who all paid $595 to be here. If they all leave after the second day, and we have to refund all that money, we’ll be out over $2,000,000! And if we offer them all $100 to change their airline ticket, that’s another $350,000 – you’re just out of your mind to even suggest this!!!”

Imagine that this is accompanied by the same panic-stricken face I described earlier. The second way to view this is the practical way.

You Should Almost Never Have to Pay Up

Let’s go back to the supermarket's “double your money back” guarantee. Clearly if every person who came into Hannaford loaded up on groceries and then returned them all for twice what they paid, the company would be out of business in a matter of weeks.

But the fact that they’re still in business – and doing quite well, thank you – demonstrates that this is not the case. In fact, they actively promote their guarantee as part of their brand identity.

And if your offerings are high-quality – if you deliver exceptional value – then you should have nothing to worry about either. If, on the other hand, you and your customers have a difficult time understanding exactly what it is you bring to the table, then you probably shouldn’t be in business anyway, and powerful marketing techniques will only lead to having more dissatisfied members than you already have.

In addition to the fact that no one should want to exercise their rights under the guarantee because you’ve held up your end of the deal, there are two additional reasons that people don’t take advantage of guarantees.

  1. They Forget - Let’s say an association offers new members a complete refund of their annual membership after 12 months if they’re not satisfied for any reason or if they don’t clearly see the value of their membership. The real likelihood is that when 12 months come and go, they probably will have forgotten about the guarantee. If they’re disappointed in any way, they’ll simply refuse to renew.
  2. They’re Too Busy - For people to take advantage of a particular guarantee, they have to take action. The sad fact is that most people don’t do this. And I’m not talking only about guarantees. They don’t take action to quit smoking. They don’t take action to improve their health. They don’t take action to perform better at work. It’s just human nature for most people to think about doing something, talk about doing something, even decide to do something…but never actually do it!
    And this will be no exception. They may think about it. They may talk with their co-worker or boss about it. But in the final analysis, it will require effort on their part, and most simply won’t make the effort.

But Isn’t This a Bit Manipulative?

Well, yes. And no. In the final analysis, effective marketing is 50% behavioral psychology and 50% mathematics. This falls under the “behavioral psychology” heading.

Marketing is designed to get quality products and services into the hands of people who will benefit from them; to meet or exceed the claims they make; and to behave in a responsible manner, consistent with high ethical standards.

Anyone who requests a refund or related action as part of a guarantee or claim you’ve made should be treated respectfully, and receive the promised action or compensation as quickly as possible.

If people are disappointed with their purchase decision, then it’s incumbent upon them to take action. And if they’re truly unhappy with their purchase, they will take action. And that’s really all you can do. You can’t and shouldn’t hold yourself responsible if they don’t take you up on a guarantee that is clearly designed to be beneficial to them.

Will People Take Advantage of Me?

Okay, so you’re not taking advantage of anybody. But won’t people take advantage of you? The sad truth is that yes, some people will take advantage of a better-than-risk-free guarantee. You might get one or even two people who deliberately register for an event with the full intent of staying for the first day and a half, getting a refund, and then accepting your $150 “airline change fee” bonus.

The worst of them will actually have booked their return flights for the afternoon of the second day so they can pocket the additional $150. I’d say that’s truly unethical and manipulative!

There are things you can do to help prevent this. You can subtly discourage anyone who might be thinking of this approach by “guilt-ing” them in advance. If you feel this might be an issue with your audience, you might include a statement like this somewhere in your guarantee:

“This guarantee is for the 99% who are interested, yet skeptical - not the 1% who will take advantage of me…”

But the simple truth is that even though you might have a few people take advantage of the guarantee, in almost all cases, the strength of the guarantee will generate new sales far in excess of any loss the guarantee may cause.

Guarantees are extremely powerful, and you should include them as a part of your marketing arsenal whenever it's appropriate.