How to Use Guarantees to Increase Sales
If you offer a product or service without a guarantee, you
are potentially losing a great percentage of sales. Scams on
the Internet are rampant and, since there is no "official" police
or watchdog, we would even venture as to say that millions
of dollars are lost to these scamsters each month.
Guarantees Increase Sales
While there are many regionally accredited entities and watch
groups, it doesn't stop many a crafty entrepreneur to bypass
the system by going through some obscure country/site to sell
their snake oils. In fact, on the news ("CBC Radio Canada
was reported a scheme in which a weight-loss drug, not yet
approved in Canada, has been bought by a company and sold in
Canada on the Internet. The matter is currently under investigation
by the pharmaceutical manufacturer and Canadian health officials.
Nevertheless, because of these tricksters and the multitude
of challenges presented on the Web, people are leery and will
increasingly seek out more secure means to benefit from offers
on the Internet. Guarantees are therefore powerful tools for
the prosperity-seeking cyber marketer and can do two very important
things that will help grow one's profits: Increase sales and
When you offer a guarantee, you reduce the skepticism around
the purchase of your product or service. Consumers are cautious
of making a purchase on the Web and guarantees give you almost
instant credibility with potential customers. If you have a
professionally-looking Web site, an ethical sales approach,
and a proven product or service, the lack of a guarantee will
still, particularly on the Internet, cause some visitors to
perceive your offer as questionable in the very least.
Guarantees Increase Perceived Value
Chris Ayers, an Internet Marketer and publisher gives an astonishing
real-life example. Writes Ayers, "One of my first direct
mail products years ago was a self-study program that I marketed
to engineers preparing for a certification exam. (...) When
I first offered the program in a trade magazine, my sales weren't
even enough to cover the cost of the ad."
He continues: "I changed my ad and sales letter to include
a guarantee and the results were amazing! The number of responses
to the same ad increased by a factor of 20. And my conversion
rate from my sales letter rose from 10% to almost 40%... Just
by adding a guarantee!"
Take for instance the story of the Monaghan brothers. The
two ran a pizzeria in order to pay their way through college.
While one worked the day shift in order to attend school at
night, the other did the converse. After about a year in the
money-losing venture, one of the brothers sold his share of
the business for a beat-up old car "and drove into the
sunset." The other, however, with a good dose of stick-to-it-iveness,
decided to make something of his fledgeling pizzeria.
According to some interviews he recently gave, Tom Monaghan
said that, at the time, he wasn't quite sure that his decision
to put a guarantee on his pizza delivery would change much.
But obviously, history tells us that his decision was the greatest
one he ever made. By simply marketing the strength of a guarantee,
i.e., "Pizza delivered fresh in 30 minutes or it's free," Domino's
Pizza became the multimillion dollar franchise operation we
Guarantees Reduce Returns
Guarantees will increase sales. And the stronger the guarantee,
the larger the sale increase. To many marketers, one of the
most important benefits of using a guarantee is the fact that
it can actually reduce returns. According to certain successful
cyber marketers such as Ayers, a strong guarantee results in
fewer returns. For instance, Ayers got fewer returns with a
90 day guarantee than he did with a 30 day guarantee. Others
got fewer returns when they offered to let clients keep some
bonus items if the product was returned.
People order from the Web, mainly because of the convenience
it offers, a site that offers a no-hassle return policy (or
risk-free promise) adds to the convenience factor and instills
a greater confidence in the buyer's psyche.
If you offer a product or service, find ways to offer a guarantee
along with it. Rather than taking a risk by removing it from
your potential clients' decisions, you will likely be decreasing