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Last updated: June 2018
A guarantee can be powerful.
Like a chainsaw.
Used right, it can cut through customer objections.
Used wrong, it can cut through profits.
This case study reveals what’s possible when you do it right. It describes how we made Australia’s largest computer-repair service even larger. We have done many things to grow Geeks2U‘s profits. The following experiments describe the work we did on its guarantees, which alone grew sales by 49%.
Guarantees don’t always increase sales. To understand when a guarantee would help, consider the two major functions of a guarantee:
Function 1: A guarantee reduces the risk for the customer. If the company doesn’t fulfill the guarantee’s promise, the customer is compensated.
Function 2: A good guarantee self-evidently promises that your business will be harmed if you don’t honor your claims. It effectively says, “Our promise must be true. Otherwise we wouldn’t be in business.” It thus acts as a kind of proof.
Many people underestimate the importance of Function 2.
So guarantees are effective when…
A guarantee would not be effective for a hot-dog cart, because visitors aren’t nervous about wasting a few dollars on a hot dog. And hot-dog carts don’t make claims that make visitors skeptical.
However, if a hot-dog cart were to claim to sell “the best hot dog you’ve ever tasted,” then a guarantee would help to overcome the prospects’ natural skepticism. And if the cart were to increase the price of its hot dogs to $10, a guarantee (such as “$10 for the best hot dog you have ever tasted—or it’s free”) would help to reduce the customers’ risk, and therefore increase the sales.
We have more-than-doubled the sales of many companies. For each of them, we began by understanding the psychology of its visitors. On this project, the breakthrough came when we started to ask our Golden Questions to Geeks2U’s customers, using several tools including Qualaroo, FluidSurveys, and Hotjar.
Geeks2U’s customers said they loved the following aspects of Geeks2U’s service:
Plus, Geeks2U’s Net Promoter Score (a measure of customer satisfaction) was one of the highest we’ve seen.
There was no guarantee in writing, but in the rare instances when a customer was unhappy, Geeks2U would always do something about it.
So we created a guarantee—not out of thin air, but as a formalization of the great service that Geeks2U was already offering.
Our guarantee encapsulated those features of the service that we knew customers cared about. We A/B-tested the guarantee using Optimizely, and the page with the guarantee generated 11% more orders:
See how the guarantee is much more than a get-out clause. It’s a promise.
However, in the same test we included an alternative variation of the guarantee, one that was more specific and prominent. This version beat the one above, increasing sales by 21%:
The previous test confirmed that we were barking up the right tree. So we knew that the new guarantee was a “conversion lever.” Once you have found a “conversion lever,” pull it harder. (For further details about this, see “Mistake #2: The “Cinema Foyer Effect” in this article.)
So we iterated upon the guarantee, to make it even stronger.
The following heat map reveals one of the reasons why the guarantee worked: It was one of the most looked-at elements on the page.
We designed a new variation that distilled the previous winner into a single, powerful sentence, supported with a simple visual:
This new guarantee resulted in 24% more conversions—an overall improvement of 49% over the original “guarantee-less” page. Notice that the winning guarantee takes the form of a positive promise. It doesn’t say, “If you dislike our service…”; it says, “We guarantee that you’ll love our service.” The most common mistake with guarantees is to word the guarantee negatively—as a “get-out clause”—rather than in positive terms, as a promise.
Since we began working with Geeks2U, its sales have increased so much its call center has outgrown its premises.
Is your company hesitant to offer a bold guarantee? That’s understandable. A guarantee can do harm if it’s implemented badly. Also, with guarantees the feedback loop is long, because you can’t calculate the costs of invoked guarantees until after the guarantee period has expired.
The following workflow provides a low-risk way to implement a bold guarantee:
We’ve had wins from many types of guarantees: price-match guarantees, satisfaction guarantees, payment-deferral guarantees—even weather guarantees. The wins typically come from three activities:
If your business is suitable for a guarantee, those three activities are likely to be effective for you.
Here’s a short video in which Geeks2U’s Managing Director, David Hancock, briefly describes what it’s like to work with us.
Our methodology requires a team effort. And Geeks2U has one of the best teams we have ever worked with. The team members are willing to test everything (even a risky guarantee). They are fun to work with, and they are fast at implementing ideas.
While we are on the subject of guarantees, you might be interested to hear about the boldest guarantee we ever tested. It was for Mobal, a telecoms company that sells phones for international travel. Previously, using financial modeling, we had correctly identified that Mobal could make huge profits by selling each phone at a subsidized price, and then making all of its money from subsequent call charges. So each time we sold a phone, we made a significant short-term loss. Offering a guarantee on such an offer might have sounded reckless.
Because the stakes were so high, we carried out a scenario analysis. It forecast that a guarantee would be likely to increase the overall profits, even taking into account the costs of servicing the guarantee. (This is where it helps to have a Cambridge Ph.D. scientist on your team.)
Fortunately, our modeling paid off. We tested a 60-day satisfaction guarantee—which was even longer than the average customer’s trip. The conversion rate rose, and the return rate turned out to be much lower than our safeguards had allowed for—so the guarantee was a huge success. Before long, the conversion rate was so high, Mobal was able to invest profitably up to a quarter of a million dollars per month in offline advertising.
Here’s a short video in which Mobal’s Alistair Scott describes the impact we had on Mobal’s business:
If you would like to see more of our clients’ results, you can find a long list at our “Clients and Results” page.
1. If you’d like us to work on your website—to dramatically improve your conversion rate and profits (like we did for all these companies), then claim your FREE website strategy session. On this free phone consultation, one of our experts will discuss your conversion goals and suggest strategies to double your sales.
2. If you’d like to learn conversion for free, go to our “Learning Zone” page, where you can download templates of million-dollar winning pages. Or, if you’d like us to build your company’s in-house capabilities (not for free), then contact us and we’ll discuss your requirements.
3. If you’d like to work for us—or see why our team members love working for us—then see our “Careers” pages.
All of our articles are subject to our Testimonial Protocol, which is described here.
So far, we have helped to grow clients in 37 countries in 11 languages.
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Phone: 0800 043 2650 or
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Fax: 0870 838 1135
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