Don’t take a dump in a box and mark it guaranteed

By Scott Sambucci | March 20, 2015

I was talking with the sales rep from a telephony company yesterday. She said:

“We have 100% guaranteed up time. For every 10 minutes we’re down, we refund you 1% of you monthly bill.”

Then her line went dead…

I had someone this week ask me, that as a startup, would it help find prospects get off the fence by offering a guarantee?

No. It won’t. You’re a startup. If your product doesn’t work, you’re going out of business and the guarantee won’t matter anyway.

Moreover, there are the switching costs your customers incurs. It might take days or weeks or months or more to completely implement your software or product depending on the complexity. The president of a very large mortgage lender told me that it took five (5!!!) years to fully implement a loan origination software system. Five years. Five F&*CKING YEARS! He can’t go to his Board and say – “Yeah, but don’t worry if it doesn’t work out, we get our money back…”

The telephony company with their 100% up-time guarantee and 1% refund policy… They charge ~$100/month for their service. If a call goes dead when I’m in the early stages of a $100k sales opportunity, I don’t care about the $1.00 refund for their six minutes of downtime. I care about the $100k deal and $10k commission I lost before the deal ever got started.

Retail companies like to say things like – “If you find the same item at a lower price within 30 days, we’ll refund you the difference.” Yeah, sounds good. But am I going to drive 15 miles back to Best Buy in the hopes that they’ll give me the $20 price difference between the camcorder I bought there and Fry’s new advertisement? Unlikely. (Not to mention all of the stipulations.) Don’t pretend you care about your customers with a guarantee. It’s a lie. You know and they know it, and they know that you know that they know it…

Instead of guarantees, make implementation planning part of your sales process. Give your prospective customer a reason to trust you. Show them early in the sales process what you’d do the first minute the contract is signed. Then the first hour. What would be accomplished by the end of the day and in the first week – setting up logins, working with the customers IT team, delivering onsite training, measuring the impact of your software against the very same metrics you’ve been selling on.

If you tell your customer they’ll be 28% more efficient with your product, show how you track this metric starting on week one, and what you’ll do by the end of week two if they’re not starting to see those gains.

If you tell your customer they’ll reduce costs by 75% over 12 months, show them how they are on track to reach those cost savings at the end of first month, and what you’ll do to remediate if they’re not on track.

Tell that that you will sit side-by-side with their users every day for the first week to make sure everything is working perfectly.

Skip the guarantee and show you’re customer how much you will love them.