Helping small business owners develop extraordinary businesses that really work for their customers, their employees, themselves and their families

Build your business with an Extraordinary Guarantee

One of the best ways to differentiate your business, justify premium prices and eliminate an obstacle to sales of your product or service is to provide an Extraordinary Guarantee.

Especially when dealing with a business they haven’t dealt with before, customers are afraid they are going to be disappointed with the outcome and won’t get the promised value for the money they pay.

Legal counsel will put “weasel out” terms in contracts or product disclosures, disclaiming any legal liability or risk of loss for the seller and shifting all of the risk to the buyer.

This risk of loss is an obstacle for a customer’s decision to make a purchase or to hire a service provider.

Some businesses have decided to overcome this objection by reversing the risk and offering guarantees to their customers. If the business sells an excellent product or service, the resulting increase in sales usually far exceeds the cost of honoring the guarantee.

Before offering a guarantee, a business must have excellent systems in place to avoid disappointing a customer. It might be appropriate to have employee bonuses for (1) trouble-free performance and (2) going “beyond the call of duty” to provide excellent service, including honoring the company’s guarantee without hassling the customer.

Honoring a guarantee also can create some favorable “buzz”. Customers talk it when what could have been a bad experience becomes a good experience.

There are two kinds of guarantees a business can offer to its customers: (1) a specific (conditional) guarantee and (2) an unconditional guarantee. I suggest a company should offer both.

As an example of a specific guarantee, “Bugs” Burger Bug Killers, Inc. offers “The B.B.B.K. Guarantee.”


  1. You do not pay our initial charges until we Totally Eliminate every roach, rat or mouse nesting on your premises.
  2. If you are ever dissatisfied with our results and want to cancel our service due to a re-infestation of roaches, rates or mice, we will – A. Refund up to one year’s service charge and … B. Pay the cost of another exterminator of your choice for up to one year.
  3. Should a roach or rodent be seen by one of your guests, we will PAY THEIR BILL, send them a letter of apology and invite them back as our guest.

If you owned a restaurant, needed an exterminator and knew about The B.B.B.K. Guarantee, would you hire any other exterminator? Would you be willing to pay more to hire B.B.B.K. than another exterminator that didn’t offer a similar guarantee? (Nobody else does!)

Domino’s Pizza is currently promoting a Carryout Insurance guarantee. “If damage occurs to your carryout order after you leave the store, just bring it back and we’ll remake it for free.”

What if your industry prohibits guarantees of this type, or it’s impractical to deliver?

You can guarantee an experience. “Unless a medical emergency calls your doctor away, when you come on time for an appointment at our medical practice and have to wait more than 15 minutes to see your doctor, we’ll buy dinner for you and your guest at Del Monico’s restaurant or a similar restaurant of your choice.”

If the doctor was late and bought you and your guest dinner, would you talk about it to your friends? What other doctor do you know who does that?

The unconditional guarantee is a satisfaction guarantee. “You must be 100% satisfied or your money back.”

As I understand it, an unconditional guarantee is required for mail order sales, including online sales. Ask your lawyer.

A consideration for an unconditional guarantee is the term. 30 days seems to be standard. Some businesses offer a lifetime guarantee. Studies have shown that, for most businesses, long guarantees work better. The customer doesn’t have to hurry to return the item and tends to forget about the guarantee over time.

Another consideration is, what will be the penalty if the customer exercises the guarantee? A straightforward option is the money-back guarantee. A double-your-money back guarantee is more interesting and more persuasive. A creative penalty, illustrated in the B.B.B.K. example above, creates buzz — especially when it’s honored! (It could be featured on the evening news!)

Should you argue with a customer who asks that a guarantee be honored? This is a big negative and a problem for many business owners, who want to respond, “I bet you didn’t do …” Much better: “I’m so sorry you had this problem. Here’s your money back. Now, would you mind telling me what happened so we can avoid having this happen again?”

What about cheaters?

Michael Leven, a hotel executive, said, “Too often management spends its time worrying about the 1% of people who might cheat the company instead of the 99% who don’t.” (Harvard Business Review, July, 1988, “The Power of Unconditional Service Guarantees” by Christopher W. Hart.)

The business should track who exercises the guarantee. If the same person does it repeatedly, that person should be invited to do business elsewhere.

Would you like my help incorporating a guarantee into a promotion for your business? For a complementary initial discussion, please send an email to

Free Email Updates
Get the latest content first.
We respect your privacy.
Helping small business owners develop extraordinary businesses that really work for their customers, their employees, themselves and their families