A few months ago I phoned a number of builders and renovators to research some upcoming magazine articles. Many were gracious enough to spend 5 or 10 minutes answering some questions (I always appreciate that).
One question I asked was "do you guarantee any part of your service, over and above any industry warranty program?"
The interesting thing was the responses fell into two main, but vastly different, categories:
1) "Yes we do, and here it is."
and
2) "Sure we do...well, it's kind of like a reputation-thing...we don't really put it in writing but, if something goes wrong, we'll deal with it."
Now, here's the really interesting part -- only one person fell into the first category...everyone else fell into the second.
Pretty striking, isn't it? Of all the builders and renovators I spoke with, only one had a guarantee over-and-above industry standard, in writing. Everyone else were basically saying "trust us, we'll take care of it."
Now, if you're spending tens of thousands, or hundreds of thousands, of dollars (or more), which are you going to respond more favorably to -- "just trust us" or "trust us, and here it is in writing"?
The Miracles of Guarantees
There is a lot of good in guarantees, and not just for the consumer. As a business, you can really benefit, and differentiate yourself, with guarantees.
Here's three reasons why you should consider them.
REASON #1: No One Else is Doing It
There is no better way to differentiate yourself than by doing something no one else will do. And why isn't anyone else offering guarantees in writing? Simple...for the same reason you're probably not: they're afraid everyone will take advantage of the guarantee and drive their business into the ground.
This is the #1 reasons most businesses don't use guarantees, and it's completely unfounded -- it fact, the exact opposite is true...and here's why...
REASON #2: You Attract More Business
Most builders and renovators don't want to grow their business but, rather, just get more from it. But whether you're growing your business, or trying to make more from it, the strategy is the same: attract more so you can have your choice of projects.
What if a hundred people banged on your door Monday morning and said "we want you to do our next build / renovation." Would you turn them away and say, "sorry...too many people" or would you say, "great...tell me what you want done, and I'll pick the five (or ten, or thirty) that I most want to work with."
A guarantee helps you do that.
REASON #3: You Can Charge More
The biggie! Who else is sick and tired of low profits? Who has to fight just to get a good price (and a good margin) for a project, only to see the already low profit potential decrease as the problems pile up, and the costs mount (if the low-bidders didn't steal the project from you in the first place)?
I believe the vast majority of professional builders and renovators don't charge enough to compensate for the value they deliver in the first place...let alone all the extra pressures that push their prices (and profits) down.
The single easiest way to increase profits is to increase price...and the single easiest way to do that is to increase the value.
One way to do that is offer a "take-it-to-the-bank, get-it-in-writing" guarantee.
If there's a second reason why most businesses don't include guarantees it's because "I can't afford it." Well, you can afford it if you charge for it.
If someone is renovating and decides to have low-grade windows put in, they should be charged for low-grade windows, right? If, however, they decide to have high-end, sturdy, energy-efficiency windows put in, they should be charged for high-end windows...right?
So why would it be any different in any other aspect of your business? If you're adding value, and people want that value, people will pay for it. This includes the protection, and peace of mind, guarantees give.
Set Yourself Apart...Attract More Business to Choose From While Increasing Your Profits!
Guarantees are a great way to put your prospects at ease, knowing that you'll do the job right, and take care of them if problems should arise. But although every single builder / renovator I spoke with was "guaranteed" their work...only one was willing to put it in writing and earn the trust of their prospects.
The secret is to make sure:
. you can, and will, honour it (that should go without saying)
. know the potential cost, and frequency of the guaranteed work, so you can charge appropriately (this will be refined with time, but even if you're just starting you can make a decent stab at it.)
and
. let your market know you guarantee your work where others don't...you'll become the first choice to do business with (and let the rest of the competition take on the business you don't want).
You either do quality work or you don't...right? So guarantee what you know you can, and let the competition wonder how you can 'afford' it -- 'cause, when it comes from differentiating yourself and being able to defend your higher prices, you can't afford not to.
Brett Martinson is a professional coach and consultant to the home building and renovation industry. Builders and renovators can sign up for a FREE subscription to his Successful Home Builders' Newsletter AND receive his free, bonus 5-Part eBook, "5 Profit-Draining Mistakes Builders and Renovators Make...and How to Fix Them" at http://www.SuccessfulHomeBuilders.com