Have you ever finalized a purchase decision because there was a no-risk guarantee? Sometimes it's hard to know if a certain purchase is going to be right or not, but when the merchant is willing to reduce the risk with a guarantee, it makes the sales process a lot less stressful. Stores like Nordstrom for example, build their whole reputation on it. Their customers pay a premium price for premium quality goods, but also know they're getting premium customer service. It's all very elegant.

I was talking with another coach, and she asked if I had thought about offering a money-back guarantee on my services as a way to make the purchase decision easier for new clients. It's an engaging thought, and a bold one at that, because it's hardly ever done in the consulting world. Most service business owners will usually do whatever it takes to make the customer happy, but rarely do I see a money-back guarantee. I had to think it through before deciding.

As a small business owner, offering a money-back guarantee on services does come with risks. In fact, that's what it's about: being willing to absorb all the risk so that your customers don't have to. Some of the risks you'd have to be willing to bear include:

time spent on the service itself
wages paid to you or your staff
credit card transaction fees (sale AND return)
materials or supplies used
bookkeeping or banking difficulties

If you're a sole-proprietor, even one client refund could be burdensome. It's like offering Nordstrom- quality service, without Nordstrom-like stockholders to back up the loss. If you've got an expensive pre-paid service package to refund, it might throw your budget into a tizzy.

Then I thought about it from my potential customer's point of view. In my case, they're small business owners too. They've usually got limited funds and need to spend their business development dollars wisely. Often times, my clients have never even hired a coach before, so it's an act of faith (and a good introductory consultation) that makes them sign a contract with me. So there's risk there, and that can slow down the sales process. If I can make it easier for them to hire me, that seems smart.

My deciding "ah-ha" moment came when I realized that there is one thing that removes most of the risk of the money-back guarantee for me: I know my own track record for client results. I'm willing to bet on myself. If I do a good job of client selection, and they follow through on their end of the agreement, I know that my coaching will usually pay for itself within the 1st month. With that change in perspective, I got on board with offering a money- back guarantee on my services and make that very clear on my website now.

So now I want to pass the idea on to you. If you don't offer a service guarantee, under what conditions would you consider it? If you already offer one, do you tell your customers? Do you advertise it? Here are the parameters to think about when creating a service guarantee:

1. What are you actually promising:

Overall customer satisfaction, or specific results?

2. How long is the guarantee in place:

Is it after the first service, the first month, or forever?

3. How do you back up the guarantee:

Refund, exchange, or re-do the service until the customer is satisfied?

One side benefit I've noticed from offering the guarantee in a very obvious way is that I'm already more discerning about who I'll work with. There's even more investment on my part to make sure I partner well, and extra incentive to help those clients produce results.

Does this sound like something that would be willing to take a stand for in your service business? If so, I'd like to leave you with a self-inquiry coaching request:

Are you willing to offer a service guarantee?
If so, what are the terms you can agree to?

I recommend that you enlist someone you trust to help you implement your guarantee policy and before you announce it to your customers, ask for some honest feedback. Naturally, Id recommend a business coach.