November 18, 2018

The Virtuous Cycle Of Strong Guarantees

A quick way to set yourself apart from the competition - and therefore, to justify premium prices - is to offer a guarantee.

But offering guarantees for the first time can be pretty scary so people have a tendency to add a lot of fine print the first time out.

Things like only honoring the guarantee for a very short time period, or limiting it to certain pieces of the engagement, or excluding expenses like travel and lodging.

Think about you how you react to guarantees that have an asterisk.

For example:

“$30 per month for unlimited* bandwidth!”

Don’t you immediately roll your eyes? Doesn’t it make you wonder what the catch is? Doesn’t it undermine the excitement that it would have otherwise built?

if you’re going to offer a guarantee, I suggest making it as unconditional as you possibly can.

Here’s the big picture:

The more unconditional the guarantee, the more persuasive it will be.

The more persuasive the guarantee is, the more leads you’ll get.

The more leads you get, the more deals you’ll close.

The more deals you close, the higher you can raise your prices.

The higher your prices, the more profit you will retain.

The more profit you retain, the more you can afford to refund money to a dissatisfied client.

The more refunds you give, the better you’ll get at delivering results.

The better you get at delivering results, the fewer refunds you’ll have to give.

Offering strong guarantees creates a virtuous cycle. The more unconditional the guarantee, the faster the cycle will turn.