Today’s consumer is inundated with options. So.many.options. My local grocery store has 13 different brands of dry dog food in 50-pound bags (I buy in bulk). My favorite online retailer has 316 different king-size sheet sets. The color options are endless and do not even get me started about thread counts.
My point in sharing this information with you? Simple. Options are great. Today’s consumers can find products that they genuinely love and repeatedly buy. The downside is that so many options create hesitation, anxiety, and an inability to click the “purchase” button (or swipe the credit card, if that visual works better for you).
Ask yourself, honestly, how many times have you gone online to buy something only to shut your computer off and go watch Bird Box (or some other movie) on Netflix? To then probably just end up dumbfounded by all the options staring out at you from the screen. We all have.
So, how do growing small-to-medium businesses (SMBs) get potential customers to make a purchase? Offer a guarantee.
The problem with options is that your customers are afraid of three things:
In other words, your customer is worried about making the wrong decision and then not being able to recoup what they spent. And this leads to inertia. One great way to overcome that inertia is with a guarantee that will eliminate the risk (or at least decrease it a whole bunch).
Many SMBs hesitate to offer a guarantee. They feel that they are absorbing all the risk and cannot afford it. Well, if you’re confident in your firm’s product, offer a guarantee. Ask yourself how many customers have complained about your product or service in the last month or quarter. How many customers asked you to replace a product or redo a service? Once you put pen to paper (so to speak), you will probably be surprised at the answer.
The idea that the majority of your customers will take you up on your offer is not accurate. Studies have shown that less than 2 percent of customers will ever take you up on your guarantee. But if a customer knows that they have that safety net, (s)he will be much more likely to buy from you. In fact, they might be willing to pay more for that guarantee; 55 percent have said they would. Don’t believe me? Check out the price for shoes on Zappos or the cost of soap at Bath & Body Works, or the price of clothing at LL Bean. And let’s not even talk about Costco. They are the master of reducing all fear of spending money on a new couch or computer or 48-count bundle of toilet paper. And that leads us to the one big reason to offer a guarantee. More profitable sales (even with a 2 percent return rate) equals sustainable growth.
But the work is not done.
You probably already offer a guarantee. If a customer complains or requests a refund, do you refuse? Of course not. You have a guarantee; you are just not advertising it, and that should change. Make your full guarantee a part of your brand. Make it a component of all advertising and marketing efforts, add it to your website, make it part of your email signature. Get the word out. Soon, it will be part of your brand and your culture. And you do not have to be a Costco to be start leveraging a guarantee.
When an upstart overnight delivery company (we all know who I am talking about) was trying to establish itself as a major player in the 1970’s, an advertising slogan encapsulated their commitment. ”When it absolutely, positively has to be there overnight” defined their marketing efforts, and they backed it up in their business practices. By the early 1980s, they had outmaneuvered their competition (who resorted to competing solely on price), reaching $1 billion in revenue within one decade of their inception.