There are several ways to get and to keep customers, and one of them, which many companies use, is the satisfaction guarantee.
There are many types of guarantees, and it is worth the effort to consider which ones are best suited to you and to your clientele.
Here is a brief overview:
(1) Subjective Satisfaction Guarantee
When you think of this one, imagine making the broadest possible promise to your customer, and then having to live up to it. Sometimes the subjective guarantee is stated this way:
“If, for any reason, you aren’t happy, we’ll give you your money back—no questions asked!?br />
You could wake up, look at your toaster, and say, “I’m not happy with anything in my life right now, and that includes you, little toaster, so you’re going back.?br />
The part about “no questions asked,?in my estimation, is dumb for a few reasons. As a distributor of toasters, I would like to know how and why this one let you down, but if I’ve promised not to ask, I’ll have no way of knowing.
Also, it encourages customers to act capriciously and impulsively in deciding to undo agreements with us. But please note, even without this phrase, customers have the right to be as bizarre as they wish, because a subjective satisfaction guarantee enables them to act any way they want, and that includes, unreasonably.
Companies should be careful about what they and their salespeople tell customers. The statement, “We stand behind our products!?sounds good to the buyer, but what does it mean? Are you intending to offer a subjective guarantee? Whether you intend it or not, this may be exactly what you’re doing by using these words.
(2) Limited Guarantees
Take the same guarantee as that which appears above, in (1), and attach a time frame to it, such as “within 30 days,?and you have a limited guarantee. It would read this way:
“If, for any reason, within the first 30 days, you aren’t happy, we’ll give you your money back—no questions asked!?br />
It still sounds good, but you can’t say your toaster offends your redecorated kitchen colors, ten years later and expect to get your money back.
Car manufacturers often offer limited guarantees to the “power train, only.?So, if your door handles fly off you can’t expect to have them reattached for free.
(3) Guarantees Imposed By Law
There are implied warranties that come along with every product. They’re invisible. These are implied in the law, and they protect consumers.
One implied warranty is for “fitness and use.?For example, if you buy a coffee mug at Starbuck’s, and it leaks, that item has flunked a basic fitness and use test. Is it fit for the purpose for which it was made and offered to the public? Can it “hold?liquid? No, so you can expect to return it to Starbuck’s and get your money back.
You cannot use the cup for target practice, shoot it full of holes, and then get your money back because it leaks. In other words, you have to show it doesn’t serve its intended or reasonably related purpose.
Sellers might get around implied warranties by selling their items on an “as is?basis. Or, they can explicitly state “no refunds or exchanges?at the point of purchase.
These notifications should set off the alarm bells for sensible consumers, however. They say, “You’re buying junk.?br />
Guarantees will generally enable you to make more sales that you would if you didn’t offer them, because they reduce or eliminate the risk in buying. But if the wording of the guarantee is too guarded, too limited, it can backfire and sound strikingly similar to a disclaimer of responsibility.
Also, companies need to thoroughly brief their associates about the parameters of their guarantees. Customer service personnel, especially, should be up to speed with them so there is no confusion when customers try to invoke them.
In a separate article, I’ll discuss the ins and outs of offering guarantees when you sell a service.
Dr. Gary S. Goodman, President of Customersatisfaction.com, is a popular keynote speaker, management consultant, and seminar leader and the best-selling author of 12 books, including Reach Out & Sell Someone?and Monitoring, Measuring & Managing Customer Service. He is a frequent guest on radio and television, worldwide. A Ph.D. from USC's Annenberg School, Gary offers programs through UCLA Extension and numerous universities, trade associations, and other organizations in the United States and abroad. He is headquartered in Glendale, California, and he can be reached at (818) 243-7338 or at: gary@customersatisfaction.com.