From the April 1998 issue of Entrepreneur

How many times have you heard or read the phrase "satisfaction guaranteed"? This phrase has been so overused and underdelivered that most of us automatically disregard it when we see it. But what if you took this old-fashioned notion and gave it some teeth? How would that affect your bottom line?

A guarantee is a written assurance that something is of specified quality or that it will perform satisfactorily for a given time period. A money-back guarantee states that if your product doesn't perform properly or you don't deliver satisfactory service, your customer gets a full refund.

Big companies might seem to have an advantage when it comes to guarantees because of their depth of resources. But small businesses can actually make good on their guarantees more effectively because they can act more quickly, customizing their responses and controlling the quality of their products or services.


Leann Anderson is the owner of Anderson Business Resources, a Greeley, Colorado, company specializing in customer service, marketing and business etiquette. E-mail her at landerson@ctos.com

At Your Service

The important part of any guarantee is not so much that it serves as a marketing tool but that it represents your philosophy regarding customer service. Sure, an emphatic guarantee can do a lot to promote your product or service, but at the heart of it is your fundamental desire to serve your customers. That's what ultimately builds loyalty and long-term relationships.

With this in mind, your attempts to develop a guarantee should not be overshadowed by trying to figure out how to hedge your bets or make it foolproof. By building in conditions or exclusionary terms, you'll dilute the effectiveness of the guarantee. This may leave your customers with the impression that they were tricked.

Here are a few tips for developing an effective guarantee:

  • Review your past performance. If you've had few problems satisfying customers, then you're facing a low risk level--all the more reason to offer a guarantee. You're backing a winner. On the other hand, if you're experiencing a loss of market share or often receive customer complaints or lose sales, fix the problem before you think about a guarantee. Spiff up your business practices and get your systems in order so your guarantee is a symbol of your commitment to serving your customers.
  • Make your guarantee direct and sincere. What you guarantee should be spelled out--but not to the point of minutia. When the print gets too small to be read even under an electron microscope, you've gone too far. Your goal to be accurate and specific should not come from a defensive standpoint but from a genuine desire to satisfy your customers. Your guarantee should include those things most important to your customers.
  • Make your guarantee easy to implement. Consult your employees before you write your guarantee. This way, you get the benefit of their experience and insight, and you inform them of what will be happening.
  • Promote your guarantee. Hang it in a prominent place. Put it in your brochure and on your packaging or invoices. Instruct your employees or salespeople in its fine points, and have them emphasize that your company stands behind its product.

We Guarantee It

While there will always be instances when people abuse your goodwill and service standards by taking advantage of your guarantee, most situations are grounded in misunderstanding or lack of information. You can try to minimize unhappy returns by seeking out the best suppliers or vendors, by hiring the best people, and by taking note of and correcting every complaint or slip-up to keep them from happening again. Exercise as much control as possible over what you offer and how it's delivered so your chances of seeing disgruntled customers or losing sales are decreased--and, in a perfect world, eliminated.