Guaranteed Brand Success

Ashutosh Wakankar March 12, 2017

Marks & Spencers (M&S) introduced its ‘No Quibbles Refund’ policy over six decades ago. The store refunds or exchanges non-perishable goods by customers after any amount of time and trusts the customers’ word for it. This signature policy became a hallmark of M&S’ commitment to customer satisfaction. Wachovia and Walmart created the ‘Sundown Rule,’ guaranteeing the handling of all customer queries before the end of the day.

A signature policy is a powerful but under-utilized tool and in the highly competitive service environment, offers some great opportunities to magnify a brand’s commitment.

Many professional services firms have their last payment tied ultimately to client satisfaction with the outcome. Recently, we came across a consulting firm that guaranteed the entire payment against satisfaction. It was a ONE day workshop priced at a steep $5000, but their commitment was: If you don’t like the workshop, don’t pay for it.

Policies can work very well in categories that require significant effort from the customer to generate the desired outcome. Fitness programmes or financial services companies often guarantee generous refunds against weight-loss or timely repayment of loans, to incentivise desired behaviours. However, in some of these categories, these have become par for the course and thus, have lost some of their power as branding ideas.

One of the most creative uses of signature policies in recent times was in 2009 by Hyundai in the US. At the peak of the recession, when auto sales were at their lowest in decades, the brand promised a full refund for the car in case of layoff within one year. It won many a heart with its sensitivity to the uncertainty faced by many well-meaning customers who wanted to buy a car but were unsure about the future. It significantly changed the perceptions of the brand in the US, where Korean cars were considered low-brow compared to the Japanese and the American brands. According to CNN Money, Hyundai sold 435,000 vehicles that year, an 8% increase at a time when almost all other automakers were posting sharp declines.

However, brands tend to occasionally use these guarantees as pure publicity devices and try to wriggle out of their commitment when they need to walk the talk on the promise. It could be a 30-minute pizza delivery guarantee or a lifetime warranty on your exterior paint, some of these assurances have acquired an air of false promises.

Policies that are clear, bold and generous tend to capture people’s imagination and reduce perceived risks. They are particularly useful for service brands where the outcome is uncertain. If done well, they can be an excellent source of buzz.

They can strengthen the core focus of a company by encouraging desired behaviours, signal a service breakdown well in advance and, if handled with speed and generosity, can become important style statements for the way a brand responds to extraordinary circumstances.