Hey there Rainmaker, today is Part 2 (of 2) on how to create and write a guarantee that will boost your sales and profits…
Yesterday’s post went into detail on guarantees… How they can actually increase your sales and profits… The fact that in most countries, you’re actually legally obligated to provide a refund, even if you don’t make a guarantee in your marketing… The trend that good products usually have low refund rates (despite what many business owners are scared of)… And the math behind how guarantees can dramatically boost profits, even if they only increase sales a little bit but increase refunds a lot more.
I also promised that I’d show you how to make guarantees on things like professional services that can be hard to guarantee — or, in some cases, it’s downright illegal.
Let’s dive in…
Risk removal vs. Risk reversal.
The psychology of guarantees is incredibly important. In fact, this is why guarantees work so well.
When you refuse to offer a guarantee on your product, you are subconsciously communicating to your customer that you want them to shoulder the risk of the transaction.
You’re saying, “I want you to give me your money for my product, and if the product turns out to be junk or you don’t like it, screw you.”
You may believe in your product. You may know it’s great. But your customer doesn’t know. They know the value of their money. But they don’t know if it matches up to the value they’ll get from your product.
The transaction is a risk.
If you want to make maximum sales, you need to take away the risk of the transaction. Make it as easy as possible for them to say yes.
And so when you’re guaranteeing your product for 60 days, you’re essentially saying that you’re willing to take on the risk of the transaction for the customer’s first 60 days of ownership.
They get to try out your product or service, and see how it works for them. They have a full 60 day to make sure it works like they were hoping — that it provides value to them on par with or in excess of the money they gave you.
This makes it easy for the customer to say yes, because even in buying your product today, they don’t feel like they’re taking on the risk of the transaction. They put down their money today, but it’s not officially yours until they’re satisfied.
One step above this risk removal is risk reversal.
This is rare, but can be extremely powerful. This is where you offer MORE than their money back, if they’re dissatisfied.
You’re not just agreeing to negate the customer’s risk in the transaction, you’re reversing it completely to say that you believe in your product so much, you will take on the risk of selling it to them.
If the customer is dissatisfied, they’ll get their money back, and then some.
This is common in the seminar market. The guarantee is that you can attend the first day of my multi-day seminar, and if you’re not satisfied I’ll give you your money back. But not just your money back. Rather, if you’re so dissatisfied, I’ll pay for your airfare and hotel, so you’re out nothing for coming. In fact, you got a free trip out of the deal.
There are other ways to offer this guarantee. The idea is that the customer actually comes out ahead if they’re not happy with you.
It takes chutzpa to offer a guarantee like this. But it radiates such extreme confidence in your offering, that it’s very hard for qualified prospects to say no. That’s why it’s such a powerful marketing and selling tool. And for marketers who’ve tested it, it almost always becomes a secret weapon.
Types of guarantees.
There are three main types of guarantees…
Time-based guarantees.
A time-based guarantee is what it says. You have a set length of time to try the product, at no cost. You’re probably very familiar with this. It is the standard way to present a guarantee, and is the lowest common denominator when it comes to including one with your offer.
The general rule with time-based guarantees is that longer guarantees make sales go up and refunds go down. This is counter-intuitive, so I’ll make it clear.
When you offer a guarantee for a longer period of time, you’re communicating more confidence in your product. This means, usually, sales go up. A 60-day guarantee will often increase sales over a 30-day guarantee. A 365-day guarantee will often beat a 60-day. And a lifetime guarantee usually trumps all.
But here’s the part most folks wouldn’t expect. Basic logic suggests that if you give people more time to ask for a refund, more of them will ask for a refund. But human behavior isn’t always too logical.
In most cases, a longer guarantee will lead to less refunds than a shorter one.
Here’s the thinking on this. Most likely, someone who is predisposed to asking for their money back will write the date of a 30-day guarantee on their calendar, to make sure they don’t miss it. Give them a year, and they’re far less likely to write it on their calendar. And if they forget it, their satisfaction with your product was at a high enough level. Give them a lifetime to ask for their money back, and they’re even less likely to try to fit in a refund before they forget about it.
Satisfaction guarantees.
These are also common and in a sense are usually another dimension of time-based guarantees.
The customer’s ability to ask for a refund hinges completely on their subjective satisfaction with your product or service.
If they’re happy, you keep the money. If they’re not happy, they can get their money back.
This is the bare minimum you should have, in most cases.
I don’t have much else to say about this, except that it’s best understood in relation to our next guarantee type.
Performance guarantees.
Here’s where things get interesting — and can get extremely powerful.
Base your guarantee on a result or outcome related to your product or service.
Since most good products solve a problem, the idea is that you will solve their problem or they get their money back.
Gary Bencivenga wrote a very famous ad when he was a partner in a direct response ad agency, just before going out on his own as a freelancer. The headline of the ad read (from memory, at least)…
“Announcing a direct response ad agency that will guarantee to outpull your best ad.”
It went on to describe how they were so confident in their approach, that if they didn’t beat your control ad by 10%, they would not only give you their fee back, but they would pay for their half of the test. This is total risk-reversal, and it was incredibly powerful at putting their agency on the map. (It even got a letter of admiration from David Ogilvy!)
One way that you can cover your ass in a performance guarantee is ask your customers to provide some kind of evidence they’ve followed through in using your product. This is common in wealth, business, marketing, and other income products. You results are guaranteed, as long as you can show proof you followed our recommendations.
With that, let’s dive into…
The language of guarantees.
The conditions of a guarantee can be quite powerful in themselves. Having the right conditions, in fact, can go a long way to using a guarantee to dramatically increasing your response. For example, if you change your conditions from a 30-day to a 10-year guarantee, you might double response.
However, the language you use to convey your guarantee can be just as powerful — if not more so.
Going back to the psychology of guarantees, remember it’s not so much about the money. It’s about your confidence in your product, and the customer’s perceived risk.
So, the more you can do in presenting your guarantee to convey confidence and reduce perceived risk, the better off you’ll be.
Even if most of your ad isn’t in your personal voice, your guarantee should be. The ideas is, “I personally stand behind my product.”
Any kind of guarantee can be presented as a “zero-risk” guarantee. That’s a more powerful language choice than “satisfaction.”
Also, you can stack guarantees.
Maybe you have a 60-day, zero-risk, total satisfaction guarantee. But you can also have a 12-month, put-it-to-the-test-and-get-results-or-else performance guarantee.
Some folks even have followed Jon Benson’s VSL guarantee, where he offers a ludicrous guarantee. “Even if you’re listening to these instructional videos and you decide you hate my voice, go ahead and ask for your money back.”
Pay as much attention to how you present your guarantee as to how you structure it.
Another tip. Try to avoid “negative thought packets.” This is where you’re unintentionally planting negative thoughts in your prospect’s head. You can almost always re-spin these to be positively-focused.
Example: “If you’re not happy for any reason, call and ask for a refund.” You’re planting the idea they’re not going to be happy. The better approach would be, “I’m confident you’ll be 100% completely satisfied, and if not, you’ll get a prompt and courteous refund.”
Another example, from “The Prince of Print,” Sir Gary Halbert? This was selling Tova Borgnine’s face-lift-in-a-jar product. “Use the entire jar. If your friends don’t actually accuse you of having had a face-lift, send the empty jar back, and get a 100% refund.” That is the epitome of a results-based guarantee, and something to aspire to in presenting yours.
Oh yeah, and here’s one of my guarantee secret weapons, borrowed from Gene Schwartz.
I like to position my guarantee as a trial.
Yes, you have to put down the full investment (note the language) today, to start your trial. But that’s all it is, unless you’re totally and completely satisfied. Try our product for the next 90 days, and if you’re not so satisfied you’d continue on after the trial, don’t. Instead, let us know. You’ll get a prompt and courteous full refund of every penny you paid! (There’s a lot of good language there!)
I could go on in terms of writing copy around your guarantee, but I won’t for time’s sake…
Guarantees as a competitive advantage.
Here’s what you need to know about big, bold guarantees.
If they scare you, they’ll scare your competitors even more. When you make a really good, powerful guarantee, your competitors will call you crazy. They’ll assume it will put you out of business.
I once heard a story of an industrial valve manufacturer. They make big custom valves for industrial and manufacturing applications. $10,000 is a cheap price tag in this market.
Well, the owner of the company was asked how confident he was in his valves. How long should they last, under normal use?
Forever.
And so he was urged to offer a lifetime guarantee. He did it, and every one of his competitors thought he was crazy for it. None would dare match it.
Only one of his valves ever turned into a replacement (which he offered in lieu of a refund). And that was because someone had backed a fork-lift into it. He could have told the customer no, because backing a fork lift into a valve is not “normal use.” But he replaced it anyway, and got a great marketing story out of it.
By being big and bold with your guarantees, you will not only sell more… You’ll end up stealing customers from more timid competitors who are too scared to match your offer.
Finally…
How to guarantee things you can’t.
Let’s say you’re in the real estate business. You can’t necessarily guarantee to buy someone’s house back from them if they’re dissatisfied. But you can guarantee that you’ll always be on time for your appointment. You can guarantee that you’ll fight for every negotiating point they consider to be top priority. You can guarantee that you’ll connect them with a network of top service providers when they buy their new house. The list goes on…
Or if you’re a doctor. Doctor’s can’t guarantee satisfaction or service. But they could guarantee that nobody waits for more than 10 minutes after their appointment time to be seen.
If you’re a copywriter, maybe you can’t guarantee response, but you could guarantee to keep writing new leads as long as the client keeps testing.
The idea is that if you can’t guarantee satisfaction or even performance, you can probably find SOMETHING to guarantee.
Make that the core of your guarantee, and you’ll still enjoy a marketing and competitive advantage.
Guarantees are incredibly important, and one of those “little hinges that swing big doors.”
It’s worth studying guarantees, in-depth, to improve yours, or your clients’.
This is time that will be repaid back in spades when you start counting the results of your selling efforts.
Yours for bigger breakthroughs,
Roy Furr
Editor, Breakthrough Marketing Secrets
