Why customer satisfaction guarantees are important
While you’ll almost certainly have encountered customer satisfaction guarantees as a consumer, many newcomers to retail don’t think about guarantees apart from the usual money back guarantees – but that is the bare minimum really, especially in the UK. Customers are looking for more from retailers, and competition is fierce. That means to win customers over, you need to offer something extra, which is where the customer satisfaction guarantees come in.
Why putting the customer first is essential
If you’re already working in retail, you can probably list any number of additional reasons that putting the customer first is the right thing to do. But when you’re doing your best to win over customers in the world of eCommerce, you need that edge. Showing your customers that you have their interests at heart doesn’t just benefit them, it benefits you too.
Boosts customer confidence
With so many retailers available for customers to choose from – especially on marketplaces like Amazon and eBay that customers know will back them if something goes wrong – it makes sense that customers will go to a retailer that they can have confidence in. Building customer confidence is a tricky thing, especially for new businesses. A guarantee shows potential customers the evidence that they can have confidence in buying from your business.
Increases good reviews
Your customer satisfaction guarantee is not only going to increase the confidence of your customers in making their first purchase from you, but in many cases, will lead to your existing customers actively sharing their experience with others. Good reviews are essential to building the trust that you want new customers to find, and when people share a great experience – whether that is with friends and family, or to hundreds of people on your listings, your social media, or on review websites like Trustpilot.
Heightens the chance of purchase
Increased customer confidence, and good reviews both add up to a much bigger chance that potential customers will convert to paying for your product – which is exactly what you want.
What types of customer satisfaction guarantees are there?
Most of us are aware of the first type of guarantee – getting our money back. The other types of customer satisfaction guarantees are less popular, but they are definitely worth knowing about, and considering whether they might be right for your business. While most retailers will choose just one type of guarantee to apply to their products, there can be occasions where more than one might be applicable to a business. In this case, rather than applying more than one, it is better to think strategically about what your customers want, and what is the most sustainable option for your business.
Money back guarantee
If you were to ask your customers what a guarantee looks like, this is the one that most would mention. It is as simple as, if the customer is unsatisfied with their order, they can return it and get a complete refund.
In the UK, the law states that:
You must offer a refund to customers if they’ve told you within 14 days of receiving their goods that they want to cancel. They have another 14 days to return the goods once they’ve told you. You must refund the customer within 14 days of receiving the goods back. They do not have to provide a reason.
There are some exceptions to this – but most customers know their rights, and so to mention this type of guarantee on your website just makes sense.
There are some companies that are offering their customers an incredible guarantee for the lifetime of their products – so they promise to repair, or replace for free, no matter what, for the whole of the lifetime of the product. Examples of companies that offer this service include clothing brand Patagonia, luggage brand Osprey, and hardware company Stanley.
Of course, offering a lifetime guarantee is not something that you can undertake without serious thought and planning – and if your business doesn’t manufacture your own products, then there is huge potential to end up out of pocket if your supplier doesn’t provide the best possible quality of products, or changes their methods of manufacture.
Try before you buy guarantee
For many customers, one of the biggest challenges of shopping online is not being able to try on clothing before they make a decision – and there is a huge a risk that they end up with items that need to be returned. That can be a huge hassle for some customers, which is why there are more businesses that are providing a try before you buy guarantee. This allows customers to try the item at home before they need to pay for them – with the exception of shipping.
Even Amazon have got in on this type of guarantee, with their Prime Wardrobe offering. It is super simple, you order up to six items of clothing, and then try them at home, before checking out or returning within seven days. Not all items of clothing are available on this guarantee – although we have no doubt that they are working on making more options available.
Perfect fit guarantee
Similar to the try before you buy guarantee, the perfect fit guarantee allows customers to be absolutely certain that the items that they have chosen are right for them before they make their decision. However, with the perfect fit guarantee, the length of time that customers usually have to try out their product is longer – it might be 30 days, 60 days, or even longer.
Typically the companies that are offering these types of guarantees are offering tailored clothing, but clothing isn’t the only product that customers want to try out at home before they commit to their purchase. There are a number of mattress manufacturers that are providing a perfect fit guarantee with up to 365 night trials, and so on.
Best price guarantee
This is another guarantee that is exactly what it sounds like – the company promises that they ensure they have the lowest price on their products at the time of their purchase, or within a certain amount of time of the purchase.
This can work well for businesses such as travel companies, but for online retailers and ecommerce businesses, this is almost impossible to sustain. You don’t have to be an experienced retailer for this to be obvious – because on marketplaces such as Amazon, it seems like there is always a lower price to be found, for almost every single product out there.
If you have absolute confidence that the products you’re selling are amazing and that your customers are definitely going to love them, then you might decide to offer a results guarantee. This type of guarantee means that customers will be able to claim their money back if they don’t get the results that you’re claiming they will experience – meaning customers understand they have absolutely nothing to lose by giving it a go. You often see these types of guarantees where there is a health claim associated – so, for slimming products, sleeping products, and for gym memberships.
For businesses that need to be able to build confidence in a particular product, this type of guarantee is the right one. Generally it will include money back, and free repairs if it stops working – so you see this with technology manufacturers, but historically, with luxury car manufacturers that wanted to keep their reputation intact.
Money back guarantees are pretty standard for many businesses, so for businesses that want to create a real impact, offering extra money back on top of a refund can seal the deal for many customers. Typically, we see this type of refund as a ‘double your money back’ type of offering, and it can work well. However, businesses have to be super confident in their product to be able to offer this type of guarantee, because if customers start to claim on the guarantee, it can start to get expensive and hit their profit margins really quickly.
What cost do customer satisfaction guarantees have?
If one or more of your customers have an issue, as a retail business with a customer satisfaction guarantee, you’re going to encounter a cost – whether that is a financial cost, a time cost, a cost to your reputation – or all of the above. However, the benefits of having a customer satisfaction guarantee dramatically outweigh the costs, assuming that you’re providing the right levels of service, and great products.
To be able to sustain a great customer satisfaction guarantee as an online retail business, you’ll be doing everything you were already aiming to deliver:
- Fast delivery times
- High quality products
- Great customer service with prompt response times
- Excellent returns policy
With that in mind, you’ll certainly want to do significant research before you start to develop your customer satisfaction guarantee. You’ll need to know costs, but you’ll also need to establish the likelihood of customers wanting to make a claim on your guarantee, and decide on the business processes that will need to be in place when customers do make a claim.
Can customer satisfaction guarantees be used with DropShipping businesses?
They can, but they aren’t something that you can just apply to your business without some serious thought. As we’ve already mentioned, customer satisfactions guarantees can’t be just hollow words – you need to be prepared to stand by whatever you’re promising your customers. If you don’t, those negative reviews start to roll in, then potential customers start to look at alternative businesses to buy from, sales drop… and this is a spiral that is really hard to get out of.
When your business relies on DropShipping – whether completely, or in part – then you need to ensure that your suppliers are prepared to provide the same levels of quality and service that you want for your customers. You’re likely to have done this when you were selecting your suppliers by doing test purchases, but when you’re providing a customer satisfaction guarantee, then it is even more important. And if you’re potentially thinking about offering an extended returns window, you’ll need to decide whether you can absorb those returns yourself, or whether you will need your supplier to be prepared to offer you those extended terms as well.
For businesses that already provide a customer service guarantee, and that want to scale their business by incorporating inventory from DropShipping suppliers, this is even more important. Depending on the types of products that you want to DropShip, you may need to be prepared to absorb the cost of returns or refunds on items that customers make a claim on your customer satisfaction guarantee, rather than passing back to your supplier. If you’ve got an amazing supplier and some great products, this may not be an issue, but one that you’ll need to consider before you make your decision.
Although customers generally know their rights, it can be a useful marketing tool to have an additional guarantee to encourage them to make their purchase with you, rather than another business. However, your guarantees cannot just be a marketing tool – you have to be ready to stand by your guarantee. If you try and wriggle out of providing the refund (or whichever other offering you’ve chosen), the potential PR disaster is enormous – and if the customer decides to pursue you through the courts, the costs can be phenomenal, and kill your business entirely.
If you’re fully confident in your product offering though, and you have the means to cover the cost of any potential refunds, having a customer guarantee can increase trust in your product and your business, and in turn increase your profits.