Category Archives: Business Model Secrets

Extraordinary Guarantees and Your Business Model

I am a big fan of by Dr. Christopher Hart’s book, “Extraordinary Guarantees: A New Way to Build Quality Throughout Your Company & Ensure Satisfaction for Your Customers.” In the book Dr. Hart lays out a blueprint for improving margins and sales via exceptional guarantees. He offers several examples including a powerful one of a New York company that captured a 60% share of their market with a product priced at double the normal rate.

I could not agree more with Dr. Hart’s commentary on guarantees as a powerful business model tactic. However, the business landscape is currently cluttered with guarantees that are anything but extraordinary. Here’s my personal hate list of lousy guarantees:


  • Price matching. Please-- you try to get away with overcharging me then offer me the same price I could have gotten elsewhere if I only would have been smart enough to go there first?


  • 110% price matching. This is a slightly less horrible option. I overpay at your store and now I can stand in line at customer service and duke it out for $3.44. Here’s the math. I buy an item for $53.12 but find it for $49.99 elsewhere. I get the $3.13 difference plus a whopping 10% bonus of $0.31. This is well worth my headache standing in line at customer service……right. I am guessing you, like me, have never taken anyone up on one of these unless it was over $50 or $100….if at all. So what’s the point of having the guarantee, to attract the hyper-price sensitive customers that are willing to stand in line for $3? It reminds me of the movie Christmas Vacation when the out-of-touch Grandmother offers the grandson a quarter to rub her bunions. She felt like a quarter was a nice reward. The grandson felt differently. This type guarantee offers too little reward for too much work.


  • Warranting an item for a period of time less than it should function problem free. I just bought a washer and dryer from a major manufacturer. Most of the machine is warrantied for a year. Whoopee! I fully expect a major branded appliance to last a year without breaking. That’s not a guarantee, that’s honoring your defects.


  • Scam-type guarantees. These guarantees seem too good to be true….and they are. Free toothpaste for life if you don’t love our new flavor. This sounds great until you realize you have to travel to Uruguay to visit the prescribed dentist to check you out prior to receiving your “free” toothpaste. A guarantee should make the customer more comfortable with the offering and quality of the product, not less.


Here’s an example of a guarantee done right. I recently stayed in a Crowne Plaza hotel and found the sign below by my alarm clock. We will wake you at your set time or your stay is free. No excuses or yabuts; no exceptions or *’s; and enough skin in the game to make it interesting and worth my while.


More companies need to leverage the power of extraordinary guarantees like Crowne Plaza. Dr. Hart suggests in his book that these guarantees increase customer satisfaction, allow for increased pricing, and force operational improvements (Crowne Plaza cannot afford to give away too many free nights so I am guessing they tightened up their wake up system).

What cool ideas have you seen companies use for extraordinary guarantees?