A guarantee can be a great way to win new customers…
But if you weave them into the very fabric of your organisation, they will also be a very powerful strategy for customer retention. And as we all know, customer retention is 1 of the major things we all crave, and it’s also a fantastic way of ‘saving money’ for your organisation.
Depending what study or research you read (according to the Harvard Business Review) acquiring a new customer can cost you, anywhere between, 5 & 25 times more than retaining an existing 1.
As an example: If retaining an existing customer costs you £100, and if you where to lose this customer (for whatever reason), to replace them it could cost you anywhere between £500 – £2,500 (depending on your specialism).
But the debate about retaining customers goes even deeper, research done by Frederick Reichheld of Bain & Company (the inventor of the net promoter score) shows, increasing customer retention rates by just 5% increases profits by a massive 25% to 95%.
So why wouldn’t you use guarantees to help you retain customers and not just win new ones?
Why do customers buy products and services with an implied guarantee anyway. Because they want to know that their purchase will be backed and guaranteed to give them what they expected, right?
Guarantees communicate the company’s commitment to stand behind the product or service they provide, and it’s important that each of your products and/or service has some kind of guarantee, enabling both new and existing customer to feel comfortable buying and using them.
If your like us, you’ll have a database of your existing customers, and know the products and/or services that they are purchasing from you. And you’ll probably have another list of your other products and/or services that they are not currently purchasing, but which could also help them in some way.
Well, 1 of the easiest ways to get them to try your other things, is a guarantee. It might be a try before you buy, a money back guarantee or even some-kind of price promise guarantee.
You could communicate with a sign stating the written guarantee in your waiting room (if you have 1), or you may write them in an informational pamphlet or you could incorporate them in to each product or service area on your website. No matter the format, it is important to provide a written guarantee so both existing & new customers have a comfort level in using your products or services.
Here are some examples of product & service guarantees, which we either use ourselves, or we have come across other organisations using them:
1) The ‘we’ll be on time’ guarantee
Promise: We’ll deliver your pizza with-in 30 minutes
If we don’t deliver: You’ll get your order for free!
2) The ‘beat the basket‘ guarantee
Promise: To beat the basket price of your most commonly purchased items.
If we don’t deliver: We’ll give you £50 to spend with us.
3) The ’30-day money back’ guarantee
Promise: Try our unlimited ink printing service, Infinity, it comes with a 30-day money back guarantee
If we don’t deliver: If you’re not satisfied with your new Infinity service during the first 30 days, we’ll refund your money. No questions asked!
4) The ‘price promise‘ guarantee
Promise: We’ll never increase your agreement price
If we don’t deliver: You can cancel the agreement immediately, without penalty.
5) The ‘price match’ guarantee
Promise: We’ll always provide our products at a competitive price.
If we don’t deliver: If you can buy the same product for less, we’ll match the price. No questions asked.
6) The ‘satisfaction’ guarantee
Promise: 100% satisfaction.
If we don’t deliver: your money back.
7) The ‘clean up’ guarantee
Promise: We’ll clean up after ourselves every time.
If we don’t deliver: you can have that job for free.
8) The ‘same day’ guarantee
Promise: Any stocked item delivered same-day, if ordered before 11am
If we don’t deliver: you can have it for free
9) The ‘service call’ guarantee
Promise: Our technicians will contact you within 8 working hours
If we don’t deliver: A £10 voucher for a store of your choice
10) The ‘quality’ guarantee
Promise: You’ll be 100% satisfied with the quality
If we don’t deliver: We’ll swap it for a like for like product or give you your money back
These examples vary by industry and depth. But the key thing is, by taking the time to offer a product and/or service guarantee and posting it on your website, you will improve a new customer’s interest in doing business with you. And you will keep more of your existing customers for longer (saving you money), whilst increasing the amount of products and/or services they currently buy from you.