Friggin’ guarantee your product already, okay?! Not only is it the right thing to do for your customers, it will make you more profits.
“If you can’t guarantee your product, you shouldn’t be selling it.”
I firmly believe it. And I have, for a long time.
At my first marketing job, selling IT training, it drove me nuts. The owner wouldn’t guarantee his product. Even though if someone would call in and complain loud enough and long enough, he’d give in and give them their money back. He was scared he was going to get ripped off if he put the guarantee in writing.
Here’s why refusing to guarantee your product is a totally idiotic way of thinking…
First, if you deliver products sight-unseen — via mail, online, etc. — you are legally required in the US and most other countries to offer a refund if customers are dissatisfied. I believe the period in the US is 30 days. Which means that by law, you’re guaranteeing a product whether you like it or not.
Second, if you’re going to get ripped off, you’re going to get ripped off. The number of folks who will rip you off — even in more unscrupulous markets — is less than you think. And those who want to will find a way, even if you don’t offer a guarantee.
Third, you’re leaving a ton of money on the table if you don’t offer a guarantee. Shoppers have come to expect a satisfaction guarantee, for at least a limited period. Even Walmart will give you back your money if you’re dissatisfied. Sometimes Amazon will even give you your money back without asking you to ship back the product. Everybody offers it so if you don’t, customers question your ethics and integrity, and will choose not to do business with you on those grounds.
Further, the math of guarantees is strongly in favor of being generous, even if it dramatically increases refunds…
Let’s do a little bit of ludicrous math here, to show what can happen if you offer a confidence-boosting satisfaction guarantee.
I’m going to use some nice round numbers to make this easy.
Let’s say your current marketing campaign costs $2,000 to run, and brings in 200 orders at $20 each. That’s $4,000 revenue, $2,000 profits.
Now let’s say that even though you don’t guarantee your product, 1 in every 200 people are dissatisfied enough that they give you grief until you’re forced to give them a refund. That means that you actually end up with 199 completed orders at $20 each, for $3,980 in revenue. And $1,980 in profits.
Okay, now let’s imagine for a moment that you write a bold, compelling, strong, confidence-boosting guarantee (using some of what I’m going to tell you in a moment).
With that guarantee, let’s say you boost response to the ad by 50%, and your return rate shoots up by 20X to 10%. That means you end up with 300 initial orders, but only 270 after all the refunds are processed. My trusty calculator tells me that’s $5,400 in net revenue from the campaign. From the same $2,000 investment. Yielding $3,400 in profits.
Now let me do a little bit more math here…
The 50% increase in sales and 20X increase in refunds actually netted you…
Drum roll…
Almost 72% greater profits from the same advertising cost!
You gave people much more confidence in buying from you, knowing you were willing to shoulder the risk of the transaction. As a result, more did buy. And even though many more either felt comfortable refunding or simply took advantage of you… You STILL made ton more profits!
This is why the great Gary Halbert, among others, proclaimed that direct marketing was in large part a MATH business, as much as anything else.
Because when you understand the math, the dumb fear and insecurity of someone taking advantage of you flies out the window in the face of the higher profits something like this can generate.
And get this…
If you go from NO GUARANTEE to a BOLD GUARANTEE…
It’s likely you’re going to boost sales by more than that 50%. You could double sales or better (from the same advertising expense).
Not only that, as long as you’re selling a great product and customer experience, your refunds will likely never come close to that 10% level. Sure, you hear about sleaze-bag internet marketers who sell crap products and end up with 50% or higher refund rates. But if you have enough integrity to put together a good product in the first place, and hold your customer’s best interests at heart enough to deliver a quality customer experience, your refunds will almost definitely be somewhere in the 2% to 8% range. And toward the bottom end of that if you’re actually delivering physical product.
And so the math will work out even further in your favor!
Now, here are the important points about structuring your guarantee…
First off, longer is better than shorter…
If you give someone 7 days to try a product, they’re going to be counting down to the deadline to get their money back. Give them 30 days, and they may put it on their calendar. Give them 90 days, 12 months, or a similarly long period, and they’re apt to forget about it.
Guarantee it for life — or even for future generations — and your likelihood of refunds just gets smaller! (This may be contrary to logic, but customer behavior is usually NOT a logical thing.)
Now none of this suggests that a long guarantee for a product short on value will save the day — your product still must deliver. But assuming that’s the case, in general offering a longer-term guarantee leads to lower refunds than a shorter-term guarantee.
Next, you should pretty much always guarantee satisfaction…
This is the bare minimum guarantee. You’ll be satisfied, or your money back.
You can also guarantee performance…
If appropriate to your product and your promise, you should also consider guaranteeing that the customer will experience the results you’ve offered.
This can be a conditional guarantee — you have to show me that you followed the directions, and if it didn’t work you’ll get your money back.
You can even guarantee the absurd…
I picked this up from the VSL guy, Jon Benson. He’ll often guarantee that you can even get you money back if you don’t like the tone of his voice, or the font he used in the ebook.
This is an emotional guarantee. It says, “I’m so dedicated to delivering you the best possible customer experience, that you can get your money back for ANYTHING.”
Don’t underestimate the power of the hidden message in this guarantee.
You should probably stack guarantees…
You can offer a 60-day satisfaction guarantee and a 1-year performance guarantee. “You have 60 days to decide if you see a fit for this in your life. If not, let us know… Even so, if you give it a real try (following steps A, B, and C) and you don’t see the results I’ve promised, let us know that any time up until 12 months from today… Either way, I’ll be happy to return today’s investment in full.”
You can even stack a satisfaction guarantee with a performance guarantee, with an absurd guarantee to boot. “Try it out for the next year. If you don’t like it, let us know. You’ll get your money back. If it doesn’t deliver results X, Y, and Z, let us know that. You’ll get your money back. Heck, if you decide 11 months and 29 days from now that you can no longer stand the sound of my voice, let us know. You’ll get your money back. No matter what, you’re covered for the next 12 months.”
Guarantees are a chance to reinforce expected results…
In that last passage, I demonstrated this. The offer in general, and the guarantee in particular, tend to get higher attention and readership. This is a good place to reinforce your core promise.
Guarantees should be personal…
There are a ton of ways to make it feel more personal. But the idea is that you, personally (or the voice of the promotion), are standing behind the product. You’re shouldering the risk because you believe in the product so much, and so the prospect doesn’t have to.
Guarantees can be the centerpiece of your sales pitch…
I’ve written entire promotions around a bold guarantee. If it’s noteworthy, it can work. But you have to be very bold in the guarantee, and the promise that’s being guaranteed has to be something the prospect really, really wants.
I also have a secret guarantee strategy I use in just about every promotion I write…
I covered this in detail at my Advanced Direct Response Copywriting Workshop. In essence, it’s telling the prospect that — thanks to the guarantee — today’s purchase is simply a risk-free trial. It works. It’s really effective. It’s something I picked up from Gene Schwartz, I think.
And finally, language matters…
If it’s truly “no questions asked,” say it. Will you “issue a refund” or will the prospect “receive a prompt and courteous full refund”?
Halbert’s “If your friends don’t accuse you of having a face lift, send back the jar for your money back” was incredibly powerful.
The Lazy Man’s Way To Riches ad featured a guarantee where the check wouldn’t even be cashed until after 21 days, meaning you didn’t even pay until the guarantee was up. That was a knock ‘em sock ‘em guarantee, and we all know the success of that book through direct response.
There’s a ton to know and learn and experiment with about guarantees, but know this…
I don’t even take on clients these days that don’t offer some form of guarantee on their products or services.
Yes, I realize that not every product and service can be guaranteed in the same way. But if you get creative, you can find a way to add a level of risk-reversal and guarantee to just about anything. And will just about always increase sales, because done well, it tears down a huge barrier of resistance to the sale.
Yours for bigger breakthroughs,
Roy Furr
Editor, Breakthrough Marketing Secrets
