Give Your Guarantees TEETH and Eat Filet Mignon More Often…
I live in Kansas City, and here we are privileged to have some of the BEST steakhouses in the country.
While my friend Michel Fortin is proud of his recent “conversion” to a vegetarian lifestyle, I’m a dyed in the wool carnivore. A proud meat eater!
I just LOVE a good high quality steak. (In fact I’m so picky about my cuts of beef, James Brausch referred to me on our recent cruise as a ”Steak Snob“!)
Well, about a year ago I tested a single variable, on just one of my websites that increased sales by 5 figures per month. That’s a WHOLE LOT of Filet Mignon!
I’ll explain the exact variable in just a second…
When I consult with my clients or conduct website evaluations one of the areas I usually make several recommendations about is improving the websites guarantee.
And for some reason I frequently get resistance from my clients in this area.
The two most common fears express about improving guarantees are…
“I’m afraid that my refund rates will increase.”
“If I offer a stronger guarantee, won’t people take advantage of me and rip me off?”
But one client summed both of these fears up perfectly when she said:
“If I change my guarantee like your telling me to, it will put all of the risk in the sale on my shoulders.”
EXACTLY!
While, she was expressing this as an objection to strengthening her guarantee, in reality she explaining the precise reason you should make your guarantees stronger.
A good guarantee transfers the risk in the transaction from the buyer to the seller.
For example on my Conversion Booster Website Evaluations service, I don’t just offer a money back guarantee or satisfaction guarantee. Nope. I offer a RESULTS guarantee!
If you order an evaluation from me and my testing recommendations don’t improve conversion rates, I give you $250 out of my own pocket.
Now THAT’S a guarantee with teeth! Either I boost your sales or I lose money. By offering such a strong guarantee, I am putting ALL of the risk in the transaction on MY shoulders.
(In fact I’ve had a few very smart and savvy clients email me saying, “with your guarantee the only way I can see someone losing money is by NOT investing in an evaluation. Either conversion rates go up and I make money, or you pay me $250, and I make money!”)
When I began testing my $250 “Performance Guarantee” my conversion rates (which were already pretty good to begin with) doubled.
Simply giving some TEETH to my guarantee and making it a REAL risk reversal added 5 figures each month to the income that’s generated by that particular website.
Now, to address those main 2 questions I mentioned above…
“I’m afraid that my refund rates will increase.”
Sometimes the will and sometimes they won’t. In many cases I actually see a drop in refund rates when the guarantee length/return window is increased.
This is for a number of reasons, most of which I’ve covered at length in this blog already.
See the following posts for additional details:
http://www.conversiondoctor.com/conversion-blog/2007/raise-your-price-and-reduce-your-refunds/
But the bottom line is… Well, your bottom line! Even if your refund rate DOES go up, you conversion rate will usually go up even higher. So even if you get 1 or 2 extra returns or refunds, you will probably see 5 or 10 extra sales for every extra refund request.
As for the other objection…
“If I offer a stronger guarantee, won’t people take advantage of me and rip me off?”
As long as you’re offering a quality product or service that delivers (or better yet, over-delivers) on the promises you make in your sales copy, this fear is usually unfounded.
And again, for every 1 person you have that does try and rip you off, the stronger risk reversal will produce multiple additional sales to compensate for that “scum bag” factor.
If you’re overly concerned about testing a “double your money back” guarantee or some other risk reversal with real teeth, you can test making the guarantee conditional on the customer taking some kind of action.
For example in my $250 cash in your pocket guarantee, I at least ask that clients actually TEST my recommendations. (And I’ve yet to have ANYONE who has actually tested my conversion boosting recommendations ask for a refund!)
If you don’t have enough faith in the ability of your product or service to produce results for you buyers, that you would be comfortable offering a strong risk reversal with real teeth in it, then you need to go back and improve your product or service.
Don’t just give some lame “100% Satisfaction Guarantee”. Satisfaction is EXPECTED! It shouldn’t be something that you have to guarantee.
Your customers are not buying from you for satisfaction. They are buying from you for RESULTS!
So go ahead and test giving your guarantee some results based TEETH and see what happens.
In fact if you give your guarantee TEETH and it doesn’t improve response, come visit me in Kansas City and I’ll buy you a REAL steak just for giving it a test!
Happy Testing!
Eric Graham,
“The Conversion Doctor”
P.S. ““ Speaking of “TEETH” my buddy James Brausch just posted to his blog about his teeth. (Yep, a whole blog post about teeth!)
You really should read the post. I can speak from experience that James has a “Hollywood Caliber” smile. (His teeth probably aren’t as “pretty” as his pedicured toes… But they’re close!)
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June 19th, 2007 at 9:24 pm
Great Post here… will definitely use it in my next site.
June 29th, 2007 at 1:16 am
[…] Give Your Guarantees Teeth And Eat Filet Mignon More Often […]
June 29th, 2007 at 1:35 pm
I think the confusion is in what the guarantee’s actual purpose is. It isn’t to ensure people will return the product, it’s to ensure that your readers trust you and feel comfortable buying from you. It’s to demonstrate the confidence you have in the product.
Thanks for the insight,
Katie