In the world of business, there's a powerful tool that often goes underutilized: the written guarantee. As a business owner, you might have thought guarantees were risky or unnecessary, but today, we're here to debunk that myth.
Written guarantees are not only an essential component of modern commerce but can also be a game-changer for your business, let’s look at two examples of powerful guarantees, one for an IT company and one for wedding photographer.
The Computer Supply Company's Transformation
Let's begin with the story of a computer supply company. This firm operated in a fiercely competitive market where customers relentlessly compared prices. When clients asked for quotes, they often used them as bargaining chips to secure lower prices elsewhere. The company's profit margins were shrinking, and the future looked bleak.
However, one day, the owner had a visionary idea: offer a lifetime guarantee on the computers they built. This guarantee meant that no matter how long a customer owned their computer, the company would stand behind it. Initially, clients were skeptical – after all, how could anyone guarantee the lifespan of a computer?
The genius behind this guarantee lay in its simplicity. There were just two conditions: customers had to bring their computers in for service every 12 months, and they couldn't tamper with the hardware themselves. This not only instilled the importance of regular maintenance but also prevented customers from voiding the guarantee through DIY fixes. The result was astonishing. Customers stopped obsessing over price comparisons. They realized they were not just buying a computer; they were investing in peace of mind. The focus shifted from cost to quality and reliability. As a result, the company's average net profit per system nearly tripled, and referrals flooded in, becoming a significant source of new business.
The Wedding Photographer's Bold Guarantee
Now, let's turn our attention to the wedding photographer who took the concept of guarantees to new heights. In the competitive world of wedding photography, capturing the perfect moments is crucial. Yet, there's always that lingering fear: what if something goes wrong with the photos?
This wedding photographer decided to tackle this fear head-on. Their guarantee was audacious: if they messed up the formal photographs, they would pay to reshoot the entire wedding. You might think this guarantee was too risky, but consider this – reshooting a wedding isn't as daunting as it sounds.
To achieve this, all that was needed was to rehire the limousine for 30 minutes to one hour, allowing a number of photos of the bride getting in and out.
The reception didn't require another extravagant party; only photographs of the cake were necessary. The investment to fulfill this guarantee was a fraction of the cost of losing a disgruntled client.
The photographer's unique guarantee quickly became a selling point. Couples were drawn to the promise of flawless photos, and the fear of photography mishaps vanished. The guarantee not only attracted more clients but also justified a higher price point. It showcased the photographer's confidence in their skills, and that confidence was contagious.
Defining the Power of Guarantees
Let's break down the essence of a guarantee: it's all about risk reversal. A well-crafted guarantee reassures your customers that they won't lose out if they choose your product or service. In essence, it's about instilling confidence. Think of it as an invitation, a promise to your potential customers that says, "Try us, and if you're not satisfied, we've got you covered."
In the world of business, confidence is a currency, and written guarantees are your secret weapon to acquire it. Think about it – why should someone hesitate to attend your workshop or buy your product if they know there's no risk involved? A guarantee eliminates the perceived downside for your customers, making their decision-making process a breeze.
Examples of Impactful Guarantees
Take, for example, the multi-story building company that rewrote the rules of their industry. By offering a unique guarantee, they transformed their business into a well-oiled machine. Their multi step program ensured quality and consistency at every stage of construction. This guarantee was not just a statement but a testament to their dedication to excellence.
Another remarkable guarantee was offered by a home builder. Imagine buying a house, and if you're unhappy with it, they'll buy it back from you at the original price. While it might sound audacious, it's also brilliant. The builder knew the real estate market, and in most cases, this guarantee was a win-win.
Simple Yet Powerful Guarantees
Guarantees need not be complex to be effective. A high-end kitchen company, for example, guaranteed installation within seven days of measuring the kitchen. No fine print, no complicated clauses. Just a straightforward promise that instilled trust and removed the fear of delays.
Boosting Conversion Rates through Guarantees
Now, let's delve into how guarantees impact conversion rates, something every business owner should be keenly interested in. The example of the computer supplier business is a shining illustration of this phenomenon. Before introducing the lifetime guarantee, this business was embroiled in price wars, with customers constantly haggling for lower prices.
The lifetime guarantee turned the tables. It shifted the focus from price comparisons to the incredible value of the guarantee itself. Customers were not just buying a computer; they were buying peace of mind. The result? Average net profit per system increased dramatically, and referrals poured in, becoming a significant source of new business.
The Logic Behind Emotional Purchases
Humans often make emotional buying decisions and seek logical justifications afterward. For instance, when you buy a luxury car like a Lexus, the logical reason might be the free car washes. Similarly, a written guarantee provides a logical reason to support the emotional desire to make a purchase. It helps customers justify their choice to themselves and others.
The Conversion Rate Differentiator
In the end, the decision for customers often boils down to which business they choose. Guarantees play a pivotal role in this decision-making process. When faced with options, customers gravitate towards the business that offers a compelling Unique Selling Proposition (USP), a robust guarantee, and a risk reversal strategy. These factors build confidence and boost conversion rates, making your business the preferred choice.
In conclusion, written guarantees are not just legal obligations but potent tools for enhancing your business. They instill confidence, differentiate your business from competitors, and significantly impact conversion rates. So, take a page from the playbook of successful businesses we've discussed, and consider how a well-crafted guarantee can transform your business into a customer-centric powerhouse.
Remember, it's not just about what you guarantee; it's about the promise you make and the trust you build with your customers. So, go ahead, embrace the power of guarantees, and watch your business soar to new heights.