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THE ARCHIVES!

The Successful Home Builders' Newsletter Archives...your library to profit-building articles.

We Guarantee Our Work...Sort of
REMEMBRANCE DAY

I'm heading downtown to Ottawa's War Memorial with my daughter for the Remembrance Day ceremonies. I think the least I can do is add my applause to the other thousands of people gathered as the veterans parade through the streets.

I hope you'll find a few minutes today to show your consideration for what these men and women fought, and died, for.
When's a Guarantee Not A Guarantee?
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."

What was interesting about the responses were they fell into two different categories:
  1. "Yes we do, and here it is."

    2. 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 one of the above categories...every one else fell into the other one.

Pretty striking, isn't it? What's even more striking is what you've probably already guessed -- only ONE person fell into category #1. That is, of all the builders and renovators I spoke with, only one had a guarantee over-and-above industry standard, in writing. Everyone else, God bless 'em, 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 is going to be more attractive: "just trust us" or "trust us, and here it is in writing"?
The Miracles of Guarantees
There's a lot of good about 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
No better way to differentiate yourself than by doing something no one else will do. And why isn't anyone doing it? Well, for the same reason you're probably not: they're afraid everyone will take advantage of the guarantee and drive the 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
Ok, I know 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 / reno." 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 want to work with.

Guarantees can help you do that.

REASON #3: You Can Charge More
Alright, the biggie. Who's 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?

Well, as you probably know, I don't think builders and renovators charge enough to compensate for the value they deliver to begin with...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 VALUE (and make sure your market knows your value vs. your competition).

Adding a guarantee means you can CHARGE FOR IT!

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 don't charge properly for it.

If I'm having a reno done and decide to have one window put in, I should be charged the cost + markup to have one window bought and installed, shouldn't I? Then, if I decided to change that to two windows, I should be charged the cost + markup to have TWO windows bought and installed...right?

Why would it be any different for any other aspect of your business? If you're adding value, and value that people WANT, people will pay for it.
Set Yourself Apart...Attract More Business to Choose From
and Increase 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...where others aren't willing to take the same 'chance' with their work.

(Look, 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 we both know most can't afford not to.)

The secret is to make sure:
  • you can, and will, honour it (that SHOULD go without saying)

  • know the potential cost, and frequency of guaranteed work, so you can charge appropriately (this will be refined with time)

  • and LET YOUR MARKET KNOW you've got it...so you become the first choice to do business with (and let the rest of the competition take on the business you don't want).
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