Darren Dahl

6 Questions to Ask Before Creating a Warranty

 


5. What happens if you sell another company's products: can you offer your own warranty on top of theirs?

Offering extended warranties on top of existing ones issues by a manufacturer can be another great way to differentiate yourself from the competition, especially in a sector like retail, says Talaga.

Mike Faith, the CEO of Headsets.com, says that he offers extended warranties to his customers on the headsets he resells from manufacturers. "Why not?" he asks. "Stand out. Manufacturers aren't marketers, they run scared while marketers set the pace." Faith says that he also will make good on any warranty claim, regardless of the timeline of when it is submitted. "Your warranty is a minimum obligation, not a policy with which to alienate your customers," he says.

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6. Are warranties just for products or can you offer them for services as well?

Don't forget that even if you sell a service, you can still offer a warranty. Consider examples where hotel chains commonly offer satisfaction guaranteed offers; car mechanics may guarantee their work for 90 days or longer; or a company like H&R Block may offer a form of warranty in that they will support you should they make a mistake in your taxes.

The difficulty in offering warranties for services is that by their very nature, services involve a greater or lesser degree of custom production, says Talaga. "This lack of mass production means that there's a large number of variables that can influence a customers use of products and hence their level of satisfaction," he says.

Case in point: Dale Furtwengler, a consultant in High Ridge, Missouri, says that's he's often asked by his clients, "Do you guarantee the results?" "My answer is, 'No,'" he says, "Because I can't guarantee that a client is going to implement the solutions I suggest. I guarantee that I'll do everything I agreed to in the agreement and that it will work if you employ my advice, but I can't guarantee that you're going to take the necessary action to get the result."

Shaefer at Traverse Legal, on the other hand, says that he offers all his clients a money-back guarantee for any work he does as a way to win the confidence of his customers. At the same time, he's not worried about droves of them taking him up on the offer as his goal is to win repeat customers by offering the best possible service. If a client isn't a good fit, he's happy to give them their money back. "The truth is that most customers never take follow up on warranties," he says. "And in our case, we've had one person ask for a refund in six years and we were happy to give it to him. We just didn't have good chemistry."

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