Should you offer a guarantee?

Guarantee2 You probably already do, implicitedly. 

After all, if a customer is very unhappy with your service or product aren’t you going to do something — fix it, replace it, return it, repeat it, refund it– to make them happy?

Offering a guarantee is just merchandising and marketing your unspoken policy.  But, the difference between letting it just be assumed and using it as a marketing advantage can be notable.  Here are some of the advantages:

  • It reassures the first time buyer that they have a safety net
  • It sets the bar for your employees
  • It gives you a platform to have a "here’s what we expect" conversation with your sub-contractors
  • It clearly communicates your confidence in your product/service
  • It allows you to define the terms of how you satisfy an unhappy client up front

You’re going to make it right anyway — so why not use it as a point of difference?

What experiences have you had with a guarantee — either as the customer or the company?  Do you have a nightmare to share?  Has it ever saved a customer relationship for you?

Flickr photo courtesy of mrshawn.

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11 comments on “Should you offer a guarantee?

  1. David Reich says:

    Drew, as a PR consultant, I’ve had clients or potential clients ask me if I can guarantee them a specific placement.

    Several years ago, I had mace it past the marketing VP at a leading fractional jet ownership company, and I was in a meeting with the founder/CEO. He asked if I could guarantee him the cover of Business Week.

    I told him I thought he had a good stoiry to tell, and that he might have a good shot at getting an article in Business Week. But the decision of who is on the cover is the editor’s, not mine. I told him I couldn’t guarantee the cover, but I could guarantee him my best effort in trying.

    I didn’t get the assignment, but I did maintain my integrity. I guaranteed him only what I could.

  2. Fran says:

    Sometimes it’s embarrassing to know that your guarantee didn’t work out with your friend. I once told a friend about the great customer service offered by a certain beauty parlor. I recomemded and guaranteed it. Later that day, she told me that it didn’t went well. It turned out that her worste enemy was the new manager. What can I say? Bad timing?

  3. David,

    You make a very valid and ethical point. You should only attach the guarantee to what you can actually deliver.

    PR is one of those things that many clients struggle to get. I pay X dollars and might not get what I want?

    But, I do believe that you too have an implicit guarantee of some kind. If a client wasn’t happy with their media coverage — what would you do? Another couple phone calls? Sending out additional info? Discounting service fees?

    A discount on the next project?

    What would you do to make them happy again?

    Drew

  4. Fran,

    Yup — making a guarantee when you don’t control the outcome (i.e. through another vendor) is risky business.

    I think I’d recommend that you keep your guarantees closer to home — on work that you can influence or control.

    How did you make good to your friend?

    Drew

  5. Dan says:

    I like to keep the guarantees implicit, but stronger than anything that could be expressed.

    In other words, if I tell you that I completely, totally, absolutely guarantee that I’ll provide you an enjoyable refreshment, that may make you feel very secure at the moment, and may persuade you to accept my offer.

    But I haven’t provided you with any service yet. I’ve lubricated the sale, but I haven’t delivered the product: I’ve established an expectation of great satisfaction.

    If I meet it, great.

    If, however, instead of the expected, refreshing lemonade, I bring your alternative, 2nd favorite drink, say, a tumbler of rice wine mixed with crushed elderberries, we’ve got trouble.

    I promised refreshment, I delivered refreshment, you maybe even enjoyed the refreshment. But I set you up for more than that. It is possible to deliver quality, acceptable work but for it to nevertheless underdeliver on an overstated promise.

    My question is this: how much sales lubricant does a guarantee provide? If, out of 10 prospects, I may sell 3 units without a guarantee, I’ll be reluctant to offer a guarantee if it only bumps my sales up to four: I’ve gained a client but placed the 3 I would have had anyway (without a guarantee) at the risk of underdelivering on an overpromise.

    If a guarantee will give me 5+ sales versus my unguaranteed 3, I’ll pretty happily run the risk of 1 or 2 of the original three having a slightly disappointing taste (of rice wine and elderberries) in their mouths.

    But I’m risk averse.

    This one comes down to opportunity cost: at what point will I risk the total satisfaction of the proverbial bird in the hand in order to entice the two in the bush? For me, that point is a pretty high threshold.

  6. David Reich says:

    Thank goodness, it hasn’t happened too often that a client is dissatisfied with publicity results.

    When it did happen about three years ago, I agreed to make another round of contacts with target media and continue our efforts for two more months, at no additional fee. But it was an unusual situation, where my shop had been recommended by an ad agency friend for one of their clients. I didn’t want to put the ad agency in an uncomfortable position with its client, which is why I did the extra work at no charge. In reality, we had done everything properly and publicity was in the pipeline. But the client wanted faster results, refusing to understand that trade punblications often work with a 3 – 4 month lead time. We had explained this when we started, but it had fallen on deaf ears.

  7. John says:

    Fran
    I agree with Drew. We should keep our guarantees on things that are under our control. It was a risky thing, especially if done in business and having no contacts with the company you guaranteed to a client.

  8. Dan,

    You raise some valid points and questions. In the end…if you had the implicit guarantee and served me the rice wine and I told you I didn’t like it — wouldn’t you go get me the lemonade for free? Or at least at a reduced cost?

    I guess my point is — don’t we already have a guarantee in place? We just don’t quantify it, right?

    Or am I all wet here?

    Drew

  9. David — ahh, good point. Our clients seldom come to us with “no strings attached.” in some way or another.

    They’re either a big player or influential in our market, or as in your case — a referral of someone we also have a relationship with.

    Does that strengthen the argument for offering guarantees, do you think? Or make them even riskier?

    Drew

  10. Dan says:

    Drew,

    Bingo! IF you didn’t like the rice wine/elderberry concoction, I’d absolutely get you the lemonade for free.

    However, if, before hand, I offer a guarantee of, for example, a personal ideal, I’ve set up both the customer and me for failure!

    I’m not concerned about a disatisfied client: that I can deal with in a pretty straightforward way (free lemonade). What I don’t want to inspire is potential disappointment on what [b]otherwise[/b] would have been a satisfactory experience.

    Let me put it this way: If I give a presentation that everyone likes, but, after it is done, I, out of insecurity, critique my own talk with something like: “Hey, did any of you notice that I had the logo upside down on slide 13?”

    What is the client takeaway: a great presentation or an upside down logo? I sabotaged myself!

    I think an explicit guarantee [i]can[/i] set up a potential “upside down logo” [i]in advance[/i]. I’m not worried about the client who doesn’t like crushed berry rice wine – I’m worried about the client who likes it fine, and would be perfectly satisfied with it, but only IF I hadn’t oversold the experience in advance with an explicit guarantee.

  11. Dan,

    So, if I am understanding you correctly — you believe that raising the issue of dissatisfaction increases the odds of having a dissatisfied client?

    Sort of the power of suggestion?

    Drew

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