The Sears catalog built its reputation on it. Rolls Royce has become legendary by offering it. Federal Express transformed it from a begrudging obligation to a powerful marketing tool.What is it? The extraordinary guarantee. And it just might be the key to substantially increasing your ability to woo and win clients.
One important book that should have changed the field of professional service firms and technology companies (but hasn’t, yet) is Extraordinary Guarantees by Christopher Hart, a former Harvard Business School professor and now president of a quality consulting firm. Hart’s first effort to explain the value of guarantees was his 1988 Harvard Business Review article, “The Power of Unconditional Service Guarantees,” which won the McKinsey Award for “Article of the Year.”
Hart’s book is a real eye opener. This is not just about Marriott Hotels and Domino’s Pizza. In the book, Hart reveals why service companies, which now account for 80 percent of the gross national product, have the greatest opportunity to differentiate themselves through offering a guarantee. He makes a strong case that extraordinary guarantees should be widespread for such professional service firms and technology companies as law offices, management consultancies, advertising agencies, software developers, information technology companies, and even investment bankers.
The vast majority of these firms, however, do not and will not guarantee client satisfaction. Why?
Service and technology firms generally perceive unwarranted risk in offering an extraordinary guarantee. Especially when they offer high-ticket services to a relatively small number of clients, even one client asking for its money back could be painful. And so, they refuse to guarantee their work. (As one humorist noted, sometimes the road less traveled is less traveled for a reason.)
“But there are reasons why guarantees can also be of exceptional benefit to these firms, especially in winning business of first-time buyers,” says Hart. An extraordinary guarantee, well designed and implemented, actually reduces risk and creates value for clients, and this is key when fees can sometimes run into the six figures. When a firm knows that its fees are on the line, commitment to service quality increases—a development that benefits everybody.
“The greater the client’s expected aggravation, expense, and time lost, the greater the power of the guarantee,” says Hart. As he points out, while bad service at a restaurant can ruin your evening, bad service from a law firm can ruin your life.
Most firms are afraid to offer complete satisfaction. So, a strong guarantee can differentiate you and help you stand out in the client’s mind.
But how do you make this work in practice? Find a way to fit the concept of a satisfaction guarantee into your own organization. What will you guarantee? Results? Process? On-time delivery? How will satisfaction be measured? At the end of the engagement? Monthly? Quarterly?
Our advice is guarantee satisfaction on a monthly basis. You do not want to get too far down the line and have the client run into a money problem. They will be tempted to suddenly decide they “aren’t satisfied” with your work so they get the money back (trust us, we have seen it happen more than once).
Here is the guarantee I offer at my Marketing With A Book Summit to be held November 13 and 14 2010. If you are not satisfied by the end of the first day, just ask for a full refund. We will give it to you without any hassles.
When I ghost write books for consultants I offer 100 percent satisfaction. How can you afford to do anything else?