Tips for Customer Satisfaction Guarantees!

Everyone has a guarantee. Sadly, many have no benefit to the consumer. Businesses are reluctant to "give away the farm" with their guarantee but they also don't realize that giving away too little can drive customers away. In this article we talk about why you need to have a guarantee "with teeth".

I was idly flipping through a science magazine over the winter holidays. In the back was a small advertisement that read something like,

“For $100 you can reserve a room on a space hotel in 2010. Guaranteed!”

The small ad guaranteed that you’d be relaxing in an orbiting space station hotel in 2010 or your money back. It was a serious ad and I wondered about the poor people who would have responded to it. When the hotel doesn’t get built, are they just thrilled to get their $100 back (because of the guarantee), without realizing that someone has had their money interest-free for the past 4 years?

And yet, the guarantee would likely sway many people to put their money into an oddball reservation like that. That one powerful word transformed the ad from being a comedy sketch to being a (semi) legitimate business endeavor.

Conversely, I was shopping around for a fairly large item online recently and the guarantee offered by the company said that they would gladly refund the product’s purchase price less shipping and handling. I didn’t buy the product because I didn’t want to foot a large S&H bill should it break down.

A home renovation store nearby was offering a low-price guarantee of 110%, meaning, if you found the same item elsewhere for a lower price, they’d give you 110% of the difference in price. Big deal, I thought: If I bought something for $500 at one store and saw it for $450 elsewhere, getting $55 back (instead of $50 like many businesses do now) wasn’t much more of a guarantee. At least they were trying.

E-book sellers through are required to offer a guarantee, but their guarantees (at least the ones I’ve seen) are fairly weak: you can return the book and get a full refund in 45 days if you jump through a series of impossible hoops to prove that the book was not valuable to you.

Businesses that offer a “full refund in store credit only” is a guarantee that infuriates a friend of mine so much he won’t shop at stores that offer that.

Do you have a guarantee? Nearly every business offers a guarantee of some kind. Unfortunately, few guarantees are really worth anything. Why? Because many business owners know that only a mere percentage of unsatisfied customers return the product. The guarantee provided may often be just enough to get some prospects to buy, but not enough of a guarantee to break the bank when a few customers return the product.

My advice? Offer a better guarantee. Offer a guarantee “with teeth” that really means business. Here’s why:

  • You will get more customers because (like that advertisement in the magazine) people will feel that they can trust you because you have a powerful guarantee.
  • Customers will be happier with your product. Surprisingly, a customer’s satisfaction level can rise simply because they know that if it breaks they can send it back easily.
  • Customers will perceive a higher value for your product because you are valuing it so high with your guarantee.
  • Customers will be willing to pay more for your product if they value the guarantee more highly.

What do I mean by a guarantee “with teeth”? Offer a lot more than the customer was expecting. This is a way that you can provide great value to your customers without spending a lot. For example, if you’re going to be the low-cost provider, mean what you say and offer a 150% discount (rather than 110% discount in the example above). Don’t offer store credit, offer a full cash refund. Don’t expect a dissatisfied customer to pay for shipping. These are simple and inexpensive choices to make when developing a guarantee, one that you mean!

And they will win you satisfied customers. I guarantee it!

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