Art
Siegel

I Guarantee This Is The Best Sales Article You Have Ever Read!

Throw away all of those sales books and magazines. Skip that sales training program you were about to attend. You really don't need them anymore; you are certain to achieve new sales heights without any of those things. The reason, you see, is that I Guarantee This Is The Best Article You Have Ever Read!

What were you thinking when you clicked on the link to read this article?

Do you really believe this will be the best sales article you have ever read? Not likely. Claims of being the "best" anything are usually untrue.

There are two reasons I can think of to explain why you chose to read this article:

• Most article headlines provide clues to the article contents. Since this headline was vague, it aroused your curiosity to find out what it was about.
  
  
• Although your good judgment tells you there is a very low probability of this article being the best, the claim is so bold that you felt compelled to at least check it out.

Whichever of these explanations is true for you, I guarantee that the SalesMBA site statistics will prove this to be one of the more widely read articles on the site. Why? It's the power of the guarantee.

What Is A Guarantee Anyway?

Most guarantees, like the headline of this article, are meaningless. They imply a promise of satisfaction, but they offer no recourse if you are not satisfied.

One of my favorite guarantee statements comes from the owner of a men's discount clothing store who comes on TV, shows row-after-row of suits and says: "We have thousands of suits, in every color and style, and none for more than $400. I personally guarantee it." So what exactly did he guarantee? That he sells his suits for $400 or less. Big deal! Everyone sells something for an advertised price, and the law requires that they honor the advertised price. Why add the assurance from the owner that he guarantees the price? Because the word "guarantee" sells.

But a "guarantee," which is usually a vague statement, has considerably less impact on most buyers than a "warranty," which makes specific promises to the buyer.

The U.S. and many other governments have stringent rules defining guarantees and warranties. The term "limited" as part of a U.S. warranty statement reflects manufacturers' concerns about liabilities extending beyond the cost of the product itself.

Why Use A Warranty?

For most any purchase, if the customer dawdles over the buying decision, it is usually out of fear that the product will not measure up to its promise: "What if I buy this widget, and it doesn't work? Can I return it or will I be stuck with it?"

The purpose of a warranty is to put the buyer's mind to rest by communicating: "We believe our product to be excellent, and we hope you will as well. But if it doesn't meet your expectations, we will do some things to make it right for you." For a major purchase such as an automobile, the warranty usually promises to fix defects. For a lesser product, return for a refund or exchange is the more common remedy.

But to have any value to the buyer, the remedy must be perceived as reasonable. One classic warranty described by Consumer Reports a few years ago was for a candy bar offered by one of the most popular brands. The offer was very generous on the surface: if you were dissatisfied for any reason, you could return the candy bar for a full refund. The catch, of course, was that the cost of postage to mail a candy bar to the company exceeded the original purchase price. Other warranties we see all the time call for such exhaustive record-keeping or labor, that few people take advantage of them. Or they are written in a negative tone that implies the buyer is stupid or responsible for anything that goes wrong.

What Makes A Good Warranty?

If the purpose of a warranty is to put the customer's mind at ease about the purchase, it needs to be written in the most positive tone. Let's take a look at an example of a good warranty, that provided by Terk Technologies for its FAM AM/FM powered stereo antennas:

Terk Technologies Corp. ("TERK") provides a warranty against defects in the materials or workmanship of this product. Repair or replacement will be made without charge. Of course, this warranty cannot cover damage due to commercial use, accidents, modification, misuse, abuse or negligence.

Repair or replacement as provided under this warranty is the exclusive remedy of the consumer. Terk shall not be liable for any incidental or consequential damage for breach of an express or implied warranty on this product. Except to the extent provided by this warranty or prohibited by applicable law, there are no implied or expressed warranties of merchantability or fitness for a particular purpose on this product.

The A.C. Power Adapter included with the FAM has a 1-year limited warranty against defects in materials or workmanship. Should you require replacement after the warranty has expired, you can order it directly from Terk Technologies. Merely send $5 (N.Y. State residents please add sales tax) to the address below. Shipping and handling is included.

For warranty service, please send the product, proof of purchase and a description of the product (postage or freight prepaid) to the address below. Please pack carefully to avoid damage.

This is a very well written warranty:

• Right up front, Terk tells us in clear language the conditions under which we can claim the warranty, and what we have to do to receive the replacement.
  
  
• The second paragraph is mostly government-induced legalize. (I'd like to meet the person who could claim incidental or consequential damages for the use of a radio antenna.)
  
  
• The Terk folks are pretty generous in the terms of their warranty. They give their customers an unlimited amount of time to find defects in the antenna, and a year for problems with the power supply. And they will extend the warranty forever on the power adapter, the most likely component to fail. If and when the power supply breaks, you can send $5.00 to get it replaced.
  
  
• Finally, they make return simple, as long as you have kept your proof of purchase.

The government-induced language notwithstanding, this is as good a warranty as we have seen anywhere. If reduced to plain language, it says: "We're so confident about the quality of this product that we guarantee it will work forever. And if it doesn't, we will repair or replace it with minimum expense or hassle to you."

But What About The Liability?

Many companies offer warranties which are considerably more limited than that of Terk Technologies. 30 to 90 days is common. Some require return in the original packaging, or a service charge which approaches the price of the product. Companies that add these limitations believe they are limiting their exposure to returns or other claims. They're wrong. Numerous tests have shown that highly limiting warranties do not reduce claims; they reduce sales!

L.L. Bean became famous by offering a virtually unlimited warranty. In fact, a news story was written about how one of their customers wore a pair of L.L. Bean shorts for years, until they were worn out. The customer returned the shorts and was given a new pair free. He then told several other people, and they became confident buyers of L.L. Bean products..

How To Create A Great Warranty

Alas, you dare not write a warranty without running it by your attorney, because some phrases have subtle legal definitions which only an expert can help you sort out. That said, you have broad latitude in what you offer and the tone of your warranty. Below are ideas to make your warranty into a powerful tool for building sales:

1. Lead into the warranty with a positive statement
Prior to the actual offer, make the customer like you and want to stick with the product: "It is very important to all of us at XYZ Manufacturing that you be totally satisfied with your new Widget. But in case you are not fully satisfied, we offer you this warranty:"

2. Make the life span of the warranty at least a year
Contrary to common belief, the longer the term of the warranty, the fewer the claims. I once conducted a test for a software product that was sold by mail. Half the customers were offered a 30-day return period if not satisfied, and the other half were offered a one-year return period. Here's what happened:

• The one-year promotion resulted in 13% more sales than the 30-day. The longer warranty period apparently inspired more confidence in buyers.
• All customer returns -- for customers who received both promotions -- came within 25 days of purchase. If customers liked the product, they kept it. If they didn't like it, they returned it, no matter how much time they had to decide.
• Returns for the 30-day group totaled 7%. Returns for the one-year group totaled only 5%. Our theory is that since the one-year people knew they were in no hurry, some of them put off their returns until they had lost the paperwork or simply got past their initial dissatisfactions.

3. Minimize legal caveats and unnecessary terms and conditions
Requiring customers to return multiple pieces of paper, or otherwise jump through hoops to prove their purchase, is a big turnoff. Forget about cheats. They are a tiny percentage of your buyers. Focus on making the vast majority of your customers, who are honest people, feel good about your company.

4. Exceed your warranty
Legally, and to limit your liability, you must set limits in your written warranty. However, when faced with a customer who asks you to go beyond your warranty, do it if at all possible. The small cost of honoring invalid claims is more than offset by positive word of mouth. (I recently returned a boat autopilot to AutoHelm, a Raytheon company, asking them to fix it and bill me for the cost. Although the warranty expired three years ago, AutoHelm repaired it at no charge, because they found it had a defective computer chip. Guess which company I will buy marine electronics from in the future.)

In general, the more generous your warranty and the more gracious you are in honoring it, the greater your sales will be--with minimal additional expense.

SeaBird Associates Inc
3011 NE 7th Drive
Boca Raton, FL 33431
Phone: 561-750-9233
E-mail: Art Siegel

About Art Siegel