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 International") 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 reduce returns.

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 know today.

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 it.