Wednesday, July 7, 2010

Two Guarantees. Which is Better?

I write a lot about how guarantees can grow your business by removing the risk of buying from you. 

I learned about the power of guarantees working for FedEx as a Webmaster from 1995-1998. One key to the success of FedEx since its inception in 1973 is their money-back guarantee -- your package will get there on time, or it's on them.

Today, companies like Zappos are enjoying similar success using money-back guarantees.

But ... there's a right way and a wrong way to make a guarantee.

Below are two recent examples. Which works better, do you think?

First, the "Forever Guarantee" from Everett Bogue, who sells an ebook, called Minimalist Business ...


I think it's effective. The language is clear, non-salesy, reassuring. He goes the extra mile by going beyond Paypal's 60-day refund limit and promising to "send you a check if I have to." 

This guarantee should increase sales, though he could sell a LOT more if he included a real-world mailing address and phone number on his site, along with testimonials, to prove he's really real.

Now, the "125% Guarantee" from M.S. Rau Antiques ...

I think it falls short. It starts off in fine fashion, billing itself "The Strongest Antiques' Guarantee in the World!" and promising a duration of 5 years and a 5% annual return on investment.

But then the lawyers take over.

The second paragraph of weasel words (italicized, for harder reading!), while perhaps necessary, undermines the whole guarantee. (Never use the word "prorated" and expect it to boost sales, for example.) After reading paragraph two, I'm no longer impressed. Pity.

While I'm no lawyer, they could have said something like this: "Some reasonable conditions apply. Example: You can't buy a Queen Anne chair, toss it in the East River, and ask for a refund. Please contact us for details." Just because you have to make restrictions on a guarantee doesn't mean you have to include them all upfront, nor does it mean you can't have fun with them.

Final note: There's no limit to how bold and creative you can be in crafting a guarantee for your business.

Yes, offering to give your customers their money back may cost you a few bucks in refunds. But if your products or services are any good, that won't happen often -- people are more honest than we think. That's been my experience since 1996.

And if your sales go up 25%, 50%, 100% -- or more -- will you really care about refunding 1-3% of them?

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