Is there a place for guarantees in spa retailing? Absolutely. Experts argue that guaranteed marketing has a place in every business. Just ask FedEx or L.L.Bean, who both recognized huge success after making unprecedented promises to their customers.

Perhaps “Bug’s” Burger Bug Killers, Inc. from Australia serves as the best example of a guarantee with their comprehensive and benefits-rich declaration:

“You don’t owe one cent until all pests on your premises have been wiped out. If you’re ever dissatisfied with BBBK’s services, you will receive a refund for up to 12 months of the company’s services…PLUS fees for another exterminator of your choice for the next year. AND, if a guest spots a pest on your premises, BBBK will pay for the guest’s meal or room, send an apology, AND pay for a future stay. AND if your facility is ever closed down due to the presence of roaches or rodents, BBBK will pay any fines, as well as all lost profits PLUS $5,000.”

What difference did this move make? BBBK became a $30-million-a-year business and captured 80% of their market while using this guarantee. And they were able to charge 10 times as much as their competitors did.

Guarantee marketing is defined as this: When you make it risk-free to buy from you and tell the world about it, more people will buy.

By making it less threatening for people to consider your offer, you lower the barriers that prevent people from doing business with you.

 

The aim is to eliminate all danger from the buying transaction for your customers. By making it less threatening for people to consider your offer, you lower the barriers that prevent people from doing business with you. You give them a compelling reason to buy today without fear of regretting it tomorrow.

 

Benefits to Your Business

Here are some of the real benefits of offering—and publicizing—the strongest guarantee possible.

Quality will increase. Hang your guarantee on the wall. There, it will remind your customers and employees of your very real commitment to quality.

Customers will trust you. Because you’re going out on a limb with your guarantee, you’re removing the risk from every transaction. People will sense your willingness to solve their problems and commitment to customer satisfaction.

Clients won’t go away mad. As a retailer in today’s environment of social media, your goal should be zero unsatisfied clients. A guarantee of satisfaction can make that goal a reality.

You’ll leapfrog the competition. Your guarantee can position your spa business in a class all its own. And first is often best in the mind of your customer. FedEx was first to offer a money-back guarantee. So was Domino’s. Today these companies still lead the pack.

You’ll create word of mouth advertising. When you guarantee results, customers are more likely to refer their friends and relatives to you. Why? Worst-case scenario, you’ll refund the money of any unhappy customers, or else do something else to make it right. This means that nobody will ever look bad by sending a new customer your way.

You’ll save money on marketing! Don’t overlook the fact that it costs you NOTHING to create a powerful guarantee. Forget the thousands of dollars you might want to invest in traditional media and online ads. Your only cost here is time.

 

Get Over the Guarantee Phobia

Strong guarantees and quality products are an unbeatable combination. Yet, guarantees frighten many small business owners. If you’re like most hot tub retailers, it might only take five or six refunds in a year to spell financial disaster. What if your clients called their friends and all started asking for refunds at once? What if word got out around town that your business was an easy target for crooked people who could take your product and then take back their money?

The reality is, at most, only about 1-2% of your customers ever ask for their money back...

 

The reality is, at most, only about 1-2% of your customers ever ask for their money back if offered a refund, so guarantees are a safe, calculated risk. If your customers are mostly satisfied now, there’s nothing to worry about. By offering a risk-free guarantee, you’ll simply call more attention to the quality you already have in place.

Let’s look at a worst-case scenario to see how much you’d really lose if a customer asked for a refund or replacement. In terms of selling service, all you’ve lost is the time it took to do the work. Since an element of the work was not done satisfactorily, you’ve learned a valuable lesson — how NOT to perform your service. As long as you don’t repeat the error, this lesson will put you one step closer to perfection. Which can lead to bigger profits down the road as you outperform your less-than-perfect competitors. A small price to pay.

If you sell a spa and the customer wants a refund or replacement, subtract your markup to find the real cost to you. Say you sell an $8,000 hot tub that costs $4,500 wholesale. Replacing the hot tub would cost you $9,000. But the customer would receive $16,000 in perceived value by getting it twice. If you give a refund, you’re out even less—just $4,500. In either case, if that customer is satisfied after taking advantage of your guarantee, you’ll generate word of mouth, which is far more valuable tomorrow than the cost of replacing an item today.

 

How to Create Your Guarantee

There’s an old advertising adage that nobody goes into a hardware store to buy a drill bit. They go to buy the hole that the drill bit makes. Hot tub customers are no different. When it comes to creating a guarantee, the trick is to separate what you’re selling from what your customers are buying. Then guarantee that they will get it from you.

Marketing experts have known this for decades. In 1925, advertising legend Bruce Barton told the American Petroleum Institute that they were selling gasoline as a bad smelling liquid. Instead, he told them they were selling “the juice of the fountain of eternal youth.” He explained that fuel enables people to experience travel, romance, and even health.

...the trick is to separate what you’re selling from what your customers are buying.

 

Another example: a restaurant owner is not in the business of selling food. They’re selling the laughter and good times that come when friends and family gather to share a meal. (Does this sound similar to the last Olive Garden commercial you saw?)

And typically, the more outrageous a guarantee, the more powerful the effect.

Here’s a step-by-step method for creating your guarantee and using it to supercharge your marketing efforts.

  1. Look at your competitors. Go through the local home magazine mailers. Search the Internet. What patterns do you see? What kind did you find? Guarantees of specific performance? Or the more common, dull-as-dishwater, “Satisfaction Guaranteed” variety?
  1. Look at your strengths. What area of your business is a strong point for you? Do your products/services produce consistently outstanding results? Do you have the widest selection in town? Do you save money for your customers?
  1. Guarantee results. Think about what specific results a customer wants when he or she does business with you. What good things happen when customers use your spa products or service? Write down the answer in specific detail, then guarantee that outcome. Do NOT simply guarantee “satisfaction.” Guarantee in detail what that satisfaction will look like to your customer.
  1. Choose a payback. Ideally, you want to create an attractive payback that won’t cost you much but will have a high perceived value. A hassle-free money-back guarantee is a good place to start. But try to dress it up a bit. Yours should exceed customer expectations and be memorable. Examples: A dealer could offer a replacement—and a free maintenance visit. In order for your guarantee to work, the payback must be fast and easy for customers to get. A late refund, for example, or a complicated refund that forces customers to jump through hoops, is almost as bad as none at all. (See below.)
  1. Start small, test, and track your results. This is vital! You must know how well your guarantee is performing before you make it a permanent part of your marketing. How? You might promote the guarantee in only one of the publications you advertise in. Or you mention it on your telephone message. Or in a letter that you send to a small segment of your customer base. Then track the results. How much have sales increased over your previous totals, before you had a guarantee? Be sure to test at least two combinations of your guarantee to find the one that works best for you. (Longer guarantees generally work better.)

 

Beware of Guarantees that DO NOT WORK

Don’t fall into the trap of creating a wishy-washy guarantee for your business. This is as bad as having no guarantee at all. In some cases, it may be worse.

Case in point: the “guarantees” below are guaranteed to do only one thing — repel clients. They’re half-hearted, vague and found on the back pages of brochures (in microscopic print). Not surprisingly, at least one of the companies that used these guarantees is no longer in business.

“All Work 100% Guaranteed. We Continue Working Until You Are Completely Satisfied.” (This is no guarantee — any company should be expected to work until the client is completely satisfied. And it’s buried on the third page of this firm’s brochure. If it’s a real guarantee, it should be out front where you can see it.)

“Our service is guaranteed.” (The lack of specifics sinks this claim. If a company is this timid about their guarantee, it implies that they’re not that serious about backing it up. It also implies that their work isn’t very good. You must spell out EXACTLY what you guarantee, for how long and how you will fix any problems.)

 

Next Steps: Get the Word Out

Once you’ve tested and found the strongest guarantee you can live up to, publicize it! Feature your full guarantee on all marketing materials. Put it in your ads, on your website, letterhead, brochures, and business cards.

Don’t hesitate to make the guarantee a focal point in your marketing efforts. Your opportunity lies in how aggressively you’re willing to tell the world about it. To the extent that you do, you’ll enjoy an advantage over all other hot tub competitors. Your willingness to stand behind your business can pay tremendous long-term dividends.