Sent by Jonathan Stark on November 7th, 2019
Long-time reader and friend of the list Maciej “Magic” Sarna wrote in with this example of a driving school that used a guarantee to set prices dramatically higher than their competition (shared with permission, lightly edited for clarity):
Hi Jonathan, I just found out that in my home town there is a driving school that gives a warranty of passing the exam. How simple is that? If you don’t pass the first time they pay for your next takes. If you pass - your instructor gets a bonus. If you feel this could help, you can take your instructor with you to sit on the back seat while you drive your exam. They charge 2x as other schools. They are booked solid. —Magic
Yup, this makes total sense to me. Offering a guarantee is a quick way to differentiate yourself from your competitors, demonstrate confidence in your area of expertise, and to dramatically increase your prices.
I know the idea scares the pants off of most people, so I’ve written about guarantees from time to time to give folks some ideas about why they’re important for your pricing and how to offer one without losing your shirt.
Here’s the thing…
If you’re not happy with your income and/or you’re sick of losing clients to low-priced amateurs, offering guarantees could be a quick solution.