As consumers, we have all been offered a money back guarantee at some point in our lives. Just look on the label of some everyday household food items or clothing brands and you’ll notice the small print offering you the option to receive a refund should you not be completely satisfied. But can this commonly used marketing technique be useful to your business? And if so, how?

Fascinatingly, the concept of a money back guarantee can be traced back to 1868 when door-to-door natural remedies salesman J.R Watkins offered his customers a full refund of the purchase price if they didn’t like the product. What he discovered (like many salespeople to follow) was that it created a sense of trust which ultimately pushed through a sale.

Let’s look at why that is.

Doubt causes hesitation. Hesitation kills sales

It doesn’t matter how good you are with words, or the quantity of persuasive sales copy you’re able to write. If you show your prospect that you have even an inkling of doubt about your product, they’ll hesitate. Hesitation will kill the sale, and so it’s critical that you believe in what you’re selling and ensure that this confidence translates. A money back guarantee can do this. It demonstrates that you are so sure about the quality of your product that the prospect won’t want their money back, even though you’re giving them this option.

Your guarantee should incorporate four things

To successfully integrate a money back guarantee into your sale, you only need to complete four actions. These are:

  • Use language that gives your prospect confidence that you believe in the quality of your product.
  • Consider the terms of the guarantee and relay these terms transparently to the prospect.
  • Give them a generous time period for evaluation.
  • Determine what you will do if they are dissatisfied and want their money back.

Here’s some well known examples of successful money back guarantees: 

Majestic Wine. Known as the ‘no quibble’ guarantee, Majestic allow you to open and taste their wine after purchase and, if you’re not satisfied, will recommend an alternative or give you your money back.

Premier Inn. Confident that each of their guests will experience a superior night’s sleep in one of their hotel rooms, Premier Inn offer a money back guarantee to anyone whose snooze was less than satisfactory!

Zappos. Well known shoe manufacturer Zappos not only offer a money back guarantee if you’re not satisfied with the shoes you purchase, but allow you to keep them for up to a year before sending them back.

Can you promise an error free service?

While some salespeople think that it’s impossible to provide an error free service at all times, and therefore foolish to promise one, it’s actually an incredibly smart idea for a number of reasons. Firstly, it’ll give your prospect the added confidence in your service and help them convert. Secondly, it’ll motivate you and your colleagues to work harder to deliver impeccable customer service. It also forces a company to look at their systems from possible failure points – an exercise that can be uncomfortable but ultimately strengthens your position.

Ultimately, whether you sell a product or a service, a money back guarantee can be applied in some way. If you’d like to learn more about how a money back guarantee can benefit your business, book an appointment with us today.

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