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Guarantees
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I was recently speaking at a trade association, and we were discussing value billing and adding features to your services that will allow you to raise fees and get paid up front.
In that presentation, I said, “One thing you can do to raise fees and get paid up front is provide an unconditional, money-back guarantee on the quality of your work.”
When I made that statement, I saw several heads shake in disagreement, and heard whispers of disbelief. And one attendee said out loud, “There’s no way!”
Here’s the deal. The vast majority of us are already providing an unconditional, money-back guarantee, because we’re small-business owners and don’t have unlimited funds to defend lawsuits. I mean, if you do a bad enough job that your client wants his or her money back, do you really think that client will hesitate to call an attorney? Can you afford to defend a lawsuit if this occurs, or would it be cheaper to just write the check and move on?
So, since you’re technically providing a money-back guarantee anyway, why not use that as a feature to set yourself apart and to ease your clients’ fears of paying you up front?
I’m sure your next question is something like, “But how can I take the chance that a client will have me work for six months and then ask for the money back?”
The solution is to build periodic reviews into your agreement with the client. For instance, on a project I once did, the agreement read:
The fee for this project is $48,000. Half of the fee is due upon execution of this proposal, and the remaining half will be due two weeks after the project begins.
At any time during the first two weeks, if [Company Name] is not satisfied with the competence or level of service delivered, it can end the contract and receive a full refund on the fee.
At the two-week point, I said to my client, “Well, it’s been two weeks. This is the point where you either write me another check or kick me out and ask for your money back. Which do you want to do?”
(Note: The guarantee was the deciding factor that secured this project, and we did not get kicked out!)
In the long run, you’re already providing a money-back guarantee, so leverage that feature to your advantage.
Have a great week!
Gill
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