Using Guarantees To Sell
Guaranteed to reduce risk and boost sales.
In my previous article, I discussed how to build trust through print advertising. I referenced a study that asked the question, “In general, which types of advertising channels do you trust when you want to making a purchasing decision?” Print topped the list at 82%, digital was down at 61% and Facebook languished at 42%. The take home message from this is that print is a great vehicle to build brand and purchase intent.
In this article, I will focus on risk. A consumer’s buying behaviour is heavily dependent on the perceived risk. By risk I mean will they receive the product or service they expect and, if they don’t, is there a means to recover their loss? A consumer’s behaviour to risk is also a function of what they invest in making the purchase. A purchaser will be more cautious if they are buying something expensive, untested, personal or requires a significant commitment.
You may have a brilliant product or offer an awesome service, you may have flashy brochures and produce great adverts, but if the buyer believes the risk of purchase is too great, the buying cycle stalls and eventually grows cold. The greater the buyer’s commitment, the harder you must work to reduce the risk.
Bricks and Mortar
People like to buy when they know the business is supported by a physical presence. While this is changing as consumers grow more accustomed to shopping online, it is still true to say consumers are more reluctant to transact with a business they don’t know (hence the importance of brand). Where this is the case, validation is sort by ensuring the company is legitimate. An address is one indication of this.
Some years ago, I ran an advert in a national newspaper on two separate weekends. On the first weekend, I listed a mobile number only and no address on the second weekend, the same advert was published but with a landline. The leads generated were 300% greater through the second advert. The lesson is about perceptions. Where an advert displays only a mobile number, consumers think small business or sole trader. They process this to mean a higher risk of doing business. If you only have a mobile phone number, consider investing in a call answering service or diverting calls from a land line.
Locals like doing business with locals. I want to be able to touch and feel the product, to ask questions and compare models. If I am not completely satisfied, I can drive to the premises and return the goods or vent my frustration. I feel good because I’m keeping business local and I feel comfortable with the risk I am taking on through the purchase.
This is the big ticket item. If we are talking reducing risk, then guarantees go a long way to achieving this. A guarantee has the consumer feel they are in charge and confident that if there is an issue they are protected. It removes or reduces any doubts associated with the purchase. It sends a strong signal that the company offering the guarantee believes in their product or service and is willing to stand by it. The stronger the guarantee, the more comfortable the consumer feels and the less hesitant they are at making the purchase.
So what type of guarantee should I offer?
There are many forms of guarantees, but remember that with a guarantee comes risk, risk that it will be abused. So think carefully when you construct your guarantee. Here’s a few examples to get you thinking.
1. If you are not completely satisfied simply return the purchase within 30 days and we’ll refund you in full, no questions asked.
2. If we are more than 20 minutes late for a scheduled service call, the cost of the service call will be free.
3. Worried you might make the wrong decision? We guarantee a 10-day cooling off period. If within this time you decide we’re not right for you, we tear up the contract.
4. Try before you buy. You receive 30 days absolutely free.
5. If the employee we recruited for you leaves within 90 days, we’ll replace them free of charge.
6. All our products are backed by a 10-year repair or replace guarantee.
7. If you find a cheaper price of an identical product, we’ll beat it by 10%.
Guarantees are about reducing risk. They should never be designed to be deceptive or difficult to invoke. When you construct yours, run it past the following
1. Is your guarantee unconditional or with as few conditions as possible?
2. Is it easy to understand and simple to communicate?
3. Will it negate the perception of risk?
4. Is it painless to invoke?
5. Is your guarantee easy to collect on?
Using guarantees is a sure-fire way of improving sales.