Wednesday, June 23, 2010

Why Guarantees Work

This week, I've written about how a guarantee can grow your business and that, whether you realize it or not, you already have a guarantee.

Today, let's talk about the psychology of guarantees. 

Why do they work?

Answer: risk removal.

Whenever any two parties meet to transact business, there’s a risk. Money and products are changing hands, and one side might get burned. In most cases, it’s the customer who assumes all the risk. Without a guarantee, if the product or service doesn’t perform, the customer is out his or her money.

Risk makes people wary ... and less likely to buy.

But what if a business removed all of the risk involved in buying? More sales and higher profits would result.

When you stand behind your work with the strongest guarantee possible, you put customers in control of the buying process. Which puts them at ease. Which makes them more likely to lower their guard, relax and listen to your offer.

But don’t believe me ...

Look at any catalog from Land’s End, Damark, SkyMall, or any successful mail-order firm. Visit or (which paid a fortune to buy Zappos!)

What you’ll find -- prominently displayed -- is some sort of money-back guarantee. Why? Because buying something long-distance or online from a person you’ll never meet is scary. By making strong guarantees, smart businesses eliminate risk and open a floodgate on sales.

It’s worth repeating: you already have a guarantee. 

If an unhappy customer called with a problem, you’d fix it, replace it or refund part (or all) of their purchase price. If not, your reputation would get trashed on, Angie's List, or someplace else. Or you'd hear from your credit card processor or Paypal.

In other words, if you refuse to fix problems or refund customers, you won’t be in business for long.

So, why not make your guarantee central in your marketing efforts?

Your opportunity is in aggressively telling the world about your guarantee. To the extent that you do, you’ll enjoy a competitive advantage over all other companies in your industry. Your business courage will pay you back with tremendous long-term dividends.

You'll find more ideas like these in my Free Report, Guaranteed Marketing.

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