Use the Power Guarantee to tackle all "naysayers” and boost your sales

"Never take no for an answer." That's what my angel investors, mentors, and board members kept telling me when I was co-founding my SaaS startup, Xpenditure (now Rydoo) more than 10 years ago. It’s easy to say, but how do you actually do it? How do you turn objections into opportunities? Today I still hear the same challenge quite often when mentoring portfolio startups for Pitchdrive.  

For corporates, innovation seems to always be the key driver to do business with young startups, but at the same time you immediately feel their aversion to risk as soon as the first meeting starts. Now if there's one thing that doesn't fit, it's innovation without taking any risk. So how did we flip a NO into a YES for that type of customers ? Well, in the early days of our startup life, we introduced Power Guarantees. With Power Guarantees, we switched roles and took over all downsides for the corporate, so it was almost impossible to say NO anymore.

Using guarantees as sales booster

Guarantees are a really compelling tool that SaaS startups can use to grow their customer base. By offering a guarantee, startups can reduce the perceived risk for potential customers and make it easier for them to say yes to a subscription.

Here are a few ways how guarantees can help SaaS startups in the sales process:

• Increase conversion rates: When potential customers know that they have a safety net in place, they are more likely to take the risk of trying a new product or service. Studies show that conversion rates can increase by up to 38% when a guarantee is offered.
• Reduce objections: One of the most common objections that salespeople hear is "I need more time to think about it." By offering a money-back guarantee, startups can remove this objection and make it easier to close the deal.
• Build trust: Guarantees show potential customers that you are confident in your product or service and that you are willing to stand behind it. This can help to build trust and make customers more likely to buy from you.
• Create Momentum: You can use special guarantees to push customers to a certain closing date which creates a momentum for your sales people. (Also read: The Power Of Reverse Thinking: A real sales booster for early stage startups)

To be effective, a guarantee needs to be clear, concise, and easy to understand. It should also be realistic and achievable. For example, a startup that offers a software product should not guarantee that it will solve all of a customer's problems. Instead, it should focus on guaranteeing a high-impact specific outcome, such as increased sales or reduced costs.

Here are a few examples of classic guarantees that SaaS startups can use in their sales process:

• Money-back guarantee: This is the most common type of guarantee, and it offers customers a full refund if they are not satisfied with the product or service.
• Performance guarantee: This type of guarantee pledges that the product or service will deliver a specific result, such as increasing sales by 10% or reducing costs by 20%.
• Free trial: This type of guarantee offers customers a chance to try the product or service for free for a certain period of time. If they are not satisfied, they can cancel their subscription without any penalty.

Take it to the next level with Power Guarantees

At Xpenditure/Rydoo  we were very confident in our digital expense management product and the direct wins it could deliver to companies, especially those still using Excel and shoeboxes with receipts. We knew that once they started using our product, they would be hooked. Not only top-level management, but all employees would become addicted, and going back to their old ways would be very difficult. 

So we launched the more aggressive form of guarantee: the Power Guarantee. In the three years we used it, we only had to pay out in 5% of cases. That means 95% of our customers were sold and happy. This method really boosted sales in the early days and helped us build up our first important logo reference customers.

The Power Guarantee is a type of guarantee that goes beyond a standard money-back guarantee. It offers customers a refund of their purchase price, plus an additional amount, if they are not satisfied with the product or service. By offering a power guarantee, startups can show potential customers that they are highly confident in their product or service and that they are willing to back it up with their money.

There are a few different ways that SaaS startups can structure their power guarantee. One common approach is to offer an extra refund, on top of the money back, if the customer does not achieve a specific outcome, such as increasing sales by 10% or reducing customer churn by 5%. Another and more aggressive approach is to offer a double refund if the customer is not satisfied with the product or service overall.

Here are a few tips for SaaS startups that are considering offering a Power Guarantee:

• Make sure that your guarantee is realistic. Don't set your customers up for failure by promising results that are too good to be true.
• Be clear about the terms and conditions of your guarantee. Make sure that customers know exactly what they need to do to qualify for a refund.
• Make sure you have a product/service that will be loved by everyone in the corporate using it; this will lead to more bottom up sales.  Extremely good UI & UX are crucial here to win the hearts of the employees and operators.
• Track the results of your guarantee: keep track of how many customers redeem your guarantee and why. The unhappy customers have the most valuable feedback. This information can help you to improve your product or service and to make your guarantee more effective.
• Onboard project per project so you mitigate risks and learn. Always be prepared to back up your guarantee. If a customer does redeem their power guarantee, process the refund quickly and efficiently.

To conclude, Guarantees can be a powerful tool for SaaS startups to use in their sales process. By offering a clear, concise, and easy-to-understand guarantee, you can reduce the perceived risk for potential customers and make it easier to say yes to a subscription. We were able to drastically increase our sales success rates, and I hope you can do it too using this technique and turn any NO into a YES.