Episode C.010 Selling With a Guarantee

Selling With a Guarantee - Overcoming the Risk Myth
   
Guaranteed Business Transactions. 

A Guaranteed Business Transaction is more than just offering a refund. It is a specific marketing strategy that swings the desired outcome massively in your favor. 

How does a Guaranteed Business Transaction work? Person A buys a product or service from Person B. Typically, the person in the Buying Role (Person A) takes all the risk. The extent to which you can shift the Risk from the purchaser (Person A)  to the Seller (Person B) will result in a very significant increase in sales.

Business Owner’s Resistance: What if I get ripped off?

One of the main psychological reasons a business owner won’t use a guarantee is the fear that they might lose revenue or get ripped off. 

1.  Avoid getting ripped off by offering a high quality product.  Honest people won’t have a reason to ask for a refund. Research shows that dishonest people are less likely to cheat when they’re actually satisfied.
2. Introduce conditions within your guarantee to discourage cheating and make your guarantee MORE credible.
3. People, in general, have integrity. It does not serve you to focus on your perceived risk regarding cheaters and unethical people because the risks are low that these people will show up and cheat you. 
4. Offering a guarantee shows a lot of confidence in your product or service, making it simple for people to overcome their doubts and buy from you. 

How to figure out your guarantee.

If you can’t figure out a guarantee for your product or service, find out what people hate about your industry and then not do it. 

1. Identify the perception your potential customers have about your industry to help you craft a guarantee that removes their pain point and makes the sale more likely. 
2. Ask your customers what they perceive the risks or customer’s pain points are with your industry if you are still unsure.  

The Psychology of the Guarantee.

People are programmed to respond in a certain way when being sold to. 
Sometimes they don’t believe the guarantee itself - especially if it’s a very powerful one.

1. MYTH: Many business owners put 100% of their focus of risk removal addressing perceived financial risk.
2. FACT: There are countless other things your potential customer actually worries about including but not limited to - wasted time, frustration, looking silly in front of others if a product or service doesn’t work.
3. Successful risk removal strategies are built to overcome customer’s greatest source of anxiety. What is the biggest obstacle keeping prospects from becoming customers? 
4. Remove the pain of spending by offering a compelling guarantee.
5. Offering a guarantee could boost sales anywhere from 21% to 300%.
6. Remove customers' buying pain by creating a bullet proof guarantee that transfers the risk from the customer to the seller. 

Types of Guarantees.

There are at least 40 types of guarantees you can use in your marketing strategy. Here are the top 10:

1. The Standard Money-Back Guarantee: Offer a 30, 60 or even 90 day money-back guarantee. 
2. The Extended Time Money-Back Guarantee: A guarantee extending longer than 90 days up to a lifetime .
3. The “I’ll Work With You” Guarantee: Your client puts in the work and goes through the process and you guarantee their results
4. The 100% Satisfaction Guarantee: More often than not, people don’t want a refund. They just want to know you’ll make it right IF there’s a real issue. 
5. The “One-Condition” Guarantee: Conditional guarantee that asks the customer a condition like telling the main reason they are unhappy with the product, so you have a chance to make it better.
6. The On-Time Guarantee: If you provide an in-person service, being on time is probably important to your customers. Make that your guarantee.
7. The Price Drop Guarantee: If the price drops after the purchase we refund the difference.
8. The No Contract Guarantee: The No Contract guarantee takes the fear of being locked in a long term contract. 
9. The Authenticity Guarantee: Guarantee your product is authentic. Good if you are selling pre-owned luxury goods, like watches, jewelry, clothes or handbags. 
10. The Emotional Guarantee: Works when it might not be practical to guarantee results with a money back guarantee (like in the case of a medical professional, consultant, real estate agent, accountant or lawyer for example).Give them “results in advance” – such as a free initial assessment or free service audit to reduce their fear in doing business with you and increase their confidence in.

Sometimes offering NO guarantee is the way to go. If you’re selling a very low priced item, or there’s simply no way you can offer a money-back guarantee on your service, rather than just ignoring the fact there’s no guarantee, you can highlight that you’re so CONFIDENT in your product, that you’re not offering a guarantee on purpose.

Make your guarantee more powerful.

You will want to make your guarantee as powerful as possible. Let’s look at the 3 basic elements every powerful guarantee considers. 

1. Length: The length is the amount of time the guarantee is valid. The longer the guarantee, the less you’ll have to worry about it. A 30-day guarantee will stay top of mind for your customer. A 1-year guarantee will probably be forgotten. If you offer a lifetime guarantee, there’s no pressure to claim it.
2. Payoff: The payoff is what your customers get when they call on the guarantee. Do they get a refund or something else? Do they get MORE back than the value of the offer? 
3. Conditions: A guarantee can have ZERO or any number of conditions. Spell out what satisfaction really means and the exact steps people need to take to get the full payoff. Make it one of your signatures. 

Common Mistakes.

Avoid these common mistakes. 

1. Don't hide your guarantee. Make sure your guarantee is seen and heard. Poor placement of your guarantee decreases the chances of visitors seeing it. 
2. Don't wait to introduce your guarantee. Introduce your guarantee early in the sales process. 
3. Don't use too much hype. Creating a really strong guarantee and failing to explain or justify it adequately can increase visitors’ perceived risk of doing business with you. Strike a balance between the strongest guarantee possible and something that doesn’t venture into “too good to be true.” 

Tying It All Together.

Risk removal is an essential component in the selling process. Offering a guarantee removed the buying risk for your customers. Most businesses understand this on a basic level, but they don’t get as many conversions as they could because they don’t give risk removal nearly as much attention as headlines, calls to action, and other elements.

These best practices will get you moving in the right direction. But the only way to optimize your risk-removal for conversions is through experimentation and testing.
Through testing and optimization, you can streamline your guarantees to build trust and win more customers.

Final Thought: The better the guarantee, the stronger the message to your customer telling them that you are so confident in your product/service, that you’re willing to stand behind it with an iron-clad guarantee.