Increase Sales By Offering Guarantee To Customers!
Why Don't People Shop and How Can We Avoid It? What are the 3 Essential Elements of Warranty and Types of Warranty? By answering these questions, we will aim to increase sales.
When you buy something, it feels like a good kick to your shin. It sounds strange, isn't it? But the truth is that a similar reaction takes place in our brains. That's why we get bored a little when we spend money.
At this point, your job as a tradesman or entrepreneur who wants to sell something to people is to remove the guilt that people feel when spending money. To achieve this, you must have a correct and successful guarantee strategy. In this way, you can increase your sales by 21% to 300%.
In summary, in this article, we will provide useful and detailed information on how to increase your sales by examining the types of guarantees and guarantees you need to offer to customers.
Why People Don't Shop
A study by Carnegie Mellon and Stanford University scientists found that pain sensations and shopping motivation activate the same point in the brain.
In the experiment, participants were shown a product and then the price of the product was shown. They were then asked to decide whether to buy the product or not.
When the participants saw the price, the area in their brains called "insular" became active. This activation was more pronounced in people who did not want to buy the product than those who wanted to buy the product.
So the conclusion to be drawn from here is that people don't just have money for a product or they don't like the product; they also do not buy because they feel some kind of spending pain while shopping.
So why does spending cause "pain"?
Because when customers buy a product, they take a certain risk. This risk is caused by fears such as the product breaking down quickly and losing its function. If you offer a certain guarantee and guarantee to the customer, you can positively affect the purchasing motivation of the customers.
How to Eliminate This Pain?
You need to remove hesitation in people's purchases. This happens with a solid warranty policy. Because the warranty greatly reduces the question marks in the customer's mind. But what kind of guarantee should be applied. It should not be mentioned as a guarantee, because it also has many types.
Let's take a look at what types of guarantees and guarantees you can offer to your customers as a seller.
3 Essential Elements of Warranty
There are 3 basic elements in every successful guarantee policy.
1. Duration: How long the warranty will be valid. (Usually 2 years.)
2. Result: What if the customer is not satisfied with the product and returns the product? Will he get his money back or will another product be sent? We can name the answers to these questions as results.
3. Conditions: We can also say what kind of situations must occur in order for the product to be covered by the warranty. For example, a clear answer should be given to the question of how the screen of the phone is broken at the end of an event, the product will enter the warranty coverage.
Types of Warranty
In this section, we will talk about many warranty methods. If you're ready, let's start…
If the customer wants to return the product for any reason, this method of guarantee is to receive the product from the customer within 30, 60 or 90 days and return the money to himself.
Here, the long period for the refund (ie 90 days rather than 30 days) can be an important factor in increasing sales. In other words, you give people more time.
If you follow such a strategy, especially in an industry where refunds are not common, you can see a serious increase in your sales.
2. Long Term Refund
Here, too, we can talk about a longer period, for example 365 days. If the customer is not satisfied with the product within 1 year after receiving the product, a refund will be made.
For example, the website The Great Courses sells courses and training packages online. The site's money back commitment is as follows:
“We promise 100% satisfaction! If you are not satisfied with a course you purchased, you can return the course and purchase another course for free at any time. Or, if you want, you can get your money back for a lesson that you are not satisfied with within a year. We offer you lifelong satisfaction because we want you to be part of the lifelong learning process. ”
Let's make a footnote: If you are going to make a long-term refund, you need to have a certain amount of money in your account as a company. So if you cannot provide such a guarantee and then return the customer's money, you will face a serious reputational problem.
3. Higher Amount Refunds
Now put yourself in the customer's shoes.
You have purchased X product. However, you are not satisfied with this product. So you both spent money and left other products and bought this X product. In a sense, you have given up on other alternatives.
At this point, even if you get a refund, you are at a loss. Because you could not take advantage of other opportunities that would make you happy.
At this point, if the product purchased by the customer is 100 dolar, a refund of 200 dolar is also a preferable method.
For example, an internet company operating in South Africa called Afrihost applies this method as follows:
“We wish you the best and take all the risks. If you are not satisfied with your connection within 60 days after connecting the internet, we will refund 2 times the amount you have paid up to that day, unconditionally. "
However, it is recommended that you test this strategy with a certain number of people before implementing this method. So, it would be good if you learn about the general tendencies of people in advance.
4. Assistance Guarantee
There are other methods than refunds.
Lifelock, for example, provides security against people's identity information being stolen. If this service corresponds to your identity, bank information, etc. If it is stolen, you have bigger problems than refunds.
"If your credentials are stolen, we will hire the best experts for you, spending $ 1 million to recover that information and not be used against you."
In other words, if the company fails to keep its promise, it promises to raise the gear and compensate its customers.
5. Bonus Guarantee
For example, you sell an online course. Let's say you teach a 4-hour lesson on Y for free, as well as a 10-hour lesson on X topic. So you give some bonus to the customer.
At this point, if you have also given a money-back guarantee, people will not be very insistent on getting a refund for what you gave as a "bonus". In other words, this is a guarantee method focused on winning people's hearts.
6. Competition Guarantee
In the guarantee of competition, things work as follows: If you find a better one than us, we will both refund your money and pay the first installment of your purchase from the other company ...
For example, an English course offers the following guarantee:
"If you are not satisfied with us after the first lesson, we will both refund your money and send you to another language course and pay for the first lesson on your behalf."
However, be careful at this point: If this guarantee is abused, it will be very difficult to earn money.
7. 100% Satisfaction Guaranteed
Warranties are about 100% satisfaction. However, there are no conditions here.
The Hampton Inn hotel offers the following guarantee:
“Clean rooms, 24-hour room service and many more… However, if you are not satisfied, you do not have to pay. At Hampton Inn, it's our job to please you. ”
Looking at the details of Hampton Inn's warranty policy, it is seen that only 1% of the hotel's total earnings are spent to fulfill this guarantee. So people often need an official who can explain their grievances, rather than get their money back. If you win people's hearts right from the start, you won't have much trouble ...
8. Free Trial Guarantee
For example, let's say you are selling a digital product. You wrote the book and you will be selling it online. If you offer 30 pages of the 300-page book to people for free, the purchase rate of your book will be higher. As a result, people are deprived of the option of buying physical books by browsing through a bookstore while buying books online.
Therefore, a free trial, or in other words, the method of presenting samples can work especially for digital products and services.
9. No Questions, Returns Guarantee
There is another method similar to Nordstrom's.
Sean McGabe, who teaches typography, offers his clients the following commitment:
“I want you to both gain talent in typography and get your money's worth. However, if you are not satisfied with the lessons, I will refund your money within 30 days without any condition. "
Even if there is an abusive warranty method, it can still be applied because the product is in question.
10. One Condition Warranty
Digital marketer John Jantsch offers one conditional guarantee: Customers should give you feedback to get their money back.
“If you are not satisfied with the product for whatever reason, we will refund your money. However, you must tell us why you are not satisfied with the product. "
11. Compensation Guarantee
This is a method frequently used especially on betting sites.
For example, let's say you bet $ 100 on site X. Even if you lose the bet, you can still get some of your money back.
12. No-Use Guarantee
Here is the system: For example, you are a showroom selling cars. You sold the car to the customer and took out accident insurance for the customer for 2 years. If the customer does not have an accident and does not need this insurance within this period, the insurance fee is returned to the customer.
13. Special Support Guarantee
It is a method that can be used especially when technical products and services are sold.
Let's say you sell hosting and domains. So you sell website domains and website names to people. You can guarantee customers to call you 7-24 for any problems they encounter and to help them with any problem. Most hosting companies offer such a guarantee anyway.
If you are an online business owner, you will definitely need one of these types of guarantees.