Though it's not necessarily a customer retention device, many businesses have gained a lot of mileage with unusual guarantees. What's an unusual guarantee? It's anything out of the ordinary.
30 Minutes Guaranteed
Domino's Pizza was built on the 30-minute guarantee. At first, your pizza arrived within 30 minutes, or it was free. Was it a big promise? Hardly. The average pizza-delivery time when Domino's started the program was 27 minutes. Though it's improved dramatically since its inception, Domino's wasn't exactly considered to be the best pizza at the time. So we have a billion dollar company built with a lower than average product, and a below average guarantee. But, they did offer a guarantee when others weren't willing. That's the point.
Other companies were amazed at Domino's. Imagine giving away product. What fools! No, what brilliance! Domino's turned pizza delivery into a game. People used to call them at the busiest times for pizza delivery, just to see if they could get a free pizza. The kids would wait by the window, looking for the pizza delivery driver, checking the clock. When Domino's screwed up and got the pizza there late, the customer wasn't mad. He was thrilled. He won! And guess who got called for pizza from then on?
In the great scheme of things, Domino's gave away very few pizzas. What they did give away was factored into the cost of their pizza. Regardless, the PR value alone made up for any costs. And, they turned a negative (late delivery) into a positive (free pizza).
On Time Guaranteed
Spring Air Conditioning in South Florida offered scheduled appointments for air conditioning service. This wasn't done. No one in the air conditioning business scheduled appointments. No one told Spring Air.
Besides scheduling appointments, they guaranteed them. If the technician was more than 30 minutes late, the first 30 minutes of service was free! I don't know the angle Spring used, but I imagine they were giving away a 30 minute diagnostic or something equivalent that they were prepared to sacrifice. So what? They accomplished the same result as Domino's. They stepped up to the plate in a way none of their competitors dared to. Then they guaranteed it.
Holiday Mess Guarantee
There's a carpet cleaning company in Dallas that offers a guarantee every Thanksgiving. They come out and clean the carpets before the holiday, just in time for family. If anyone spills the cranberry sauce, they'll come out after the holiday and spot clean for free. It's their holiday mess guarantee.
In the air conditioning industry, oversizing furnaces and air conditioners is a common problem. A lot of new construction contractors take a "better safe than sorry" attitude because they don't know the number of occupants that will inhabit the house, or the way they will operate the system. So they bump the equipment up a size.
In the air conditioning company I ran, we faced a problem when we would quote a replacement for one of these oversized units. Since we went to the trouble to calculate the size of the system based on the heating or cooling requirements, we knew when the units were oversized. An oversized unit is not only less efficient, but can create a host of air quality problems. But try telling that to a consumer.
If anything, most consumers think they need bigger systems. Many contractors roll with the flow and don't try to sell the consumer the proper size. We wanted to sell the proper size, but encountered resistance. To overcome it, we started offering temperature guarantees. We would guarantee that a furnace would heat to 72F when it was such and such a temperature outside or we would upgrade to the next size free. Ditto for cooling. The outside temperature was the "design condition" that's published for each locality in the country. All we were really guaranteeing was that we could calculate the size of a system. No risk. We weren't really guaranteeing anything. Yet we put it in writing. We printed up nice certificates showing the guarantee and specifying the conditions.
It reassured the consumer. They felt comfortable buying the smaller unit that was the correct size. It also gave us a slight cost advantage since the smaller unit was usually a few dollars cheaper. More important, the competition was afraid of matching it. The consumer would ask, "Will you guarantee that you'll heat to 72F?" The competitor would look at them like they were crazy. He wondered what he stumbled into. A house full of lawyers?
"Of course, it will heat to 72F," the competitor dodged.
"But will you put it in writing?"
He'd hesitate. Sputter. Then he'd start specifying conditions and qualifications (which we had preprinted up on our certificate). He ended up sounding evasive. Maybe he'd agree to put in writing after he thought about it. Sorry. Too late. His hesitation was taken as a sign that he wasn't sure. Our sale.
Unconditional Money Back Guarantee
Another unusual guarantee we offered was an unconditional money back guarantee. Basically, it's a promise to come back if the customer wants during the first year, rip the unit out, and give them their money back. Now, there are lots of contractors that offer this. Most, however, are terrified of it.
"What if they get a better price next week?" they say. C'mon, be realistic. After going through an installation, how many consumers will put up with the hassle to save a few hundred dollars? How many people are that slimy that they can look you in the eye and say they aren't happy, when they know it's a lie? Not too many according to the statistics.
I've talked with air conditioning contractors all over the country that have offered an unconditional money back guarantee. Most can't recall removing a unit. And that's not something you forget. When some say they have had to pull the unit, they say they're isolated instances that stand alone amidst thousands of installations. In all cases, they told me probably would have pulled the unit and given them their money back even if there wasn't a guarantee. If you'd do it anyway, why not guarantee it in writing and get credit for it.
Build It Into Your Costs
Whatever kind of unusual guarantee you create, build it into your costs. We would bump our costs by a percent to cover the chance that one out of 100 consumers would treat us like chumps. It's actually less than one out of 2,000. Nevertheless, it stayed at 1%. After a year, the percent was transferred to the bottom line.
Create A Certificate
Make a big deal about your guarantee. Act like you're proud of it. Create a certificate to show you mean what you say. It's also your chance to specify the terms very clearly so there's no misunderstanding down the road. Remember, if you'll do it anyway, put it in writing and get credit for it.
|Matt Michel is president of the Service Roundtable (www.ServiceRoundtable.com), an organization dedicated to helping contractors prosper. Matt is also the publisher of Comanche Marketing, a free marketing e-zine. Subscriptions are available at www.ComancheMarketing.com. You can contact him directly at [email protected]. Or send your comments to Contracting Business at [email protected].|