Should You Provide a Guarantee for Your Freelancing Work?
Posted March 29, 2011 in Managing Clients
As a marketing consultant, I advise my clients to always provide a money-back guarantee. It’s a proven way to increase sales without a lot of cost or risk.
Would I give the same advice to my fellow freelancers?
The Case for Money-Back Guarantees
Having a money-back guarantee is good marketing. It takes the risk away from prospective customers. It shows how much confidence you have in your product or service.
For example, these past few months I’ve spent hundreds of dollars on various creams and other treatments for my son’s worsening eczema. So when I saw yet another “magic” cream at the natural health store, I was understandably skeptical.
However, the store owner said it came with a money-back guarantee. As long as I kept my receipt, if the cream didn’t improve my son’s skin after a couple of weeks, then I could have my money back. Of course, I bought it (and, yes, it worked along with other things).
Guarantees increase sales, and the additional sales far outweigh the refunds.
One of the most successful copywriters on Elance is a guy who promises a money back guarantee. Based on Elance’s statistics, he gets plenty of clients on the site. I’m pretty sure his guarantee is one of the reasons.
I’ve also talked to a business coach who offers guarantees on her coaching programs. So far, none of her clients has asked for a guarantee.
Does this mean freelancers should offer guarantees on our work?
The Case Against Guaranteeing Your Work
My own conclusion is that freelancers should not give money-back guarantees. Here’s why.
The risk and cost of money-back guarantees are much higher for freelancers than other entrepreneurs.
Those who sell physical products get the actual product returned to them before they issue the refund. More often than not, the customer even has to pay to ship the product back.
That means, even if the business owner may have lost some money in the transaction, they haven’t lost everything. They may still be able to resell the item, either at full price (if it hasn’t been opened) or at a discount. Either way, they can still cut their losses.
Those who sell digital products lose even less. After the digital product is created, it costs very little to reproduce them and deliver them to customers. This is why you can refund a digital product and not have to return it.
On the other hand, we freelancers put in our time, energy, and expertise in every project. Time, unlike money, is irretrievable once it’s spent. You can always make money, lose it, and make it again. However, time, once it has passed, is gone forever. You cannot “make up for lost time.”
Besides this, every work we create is customized to our clients’ needs and demands. We can’t turn around and sell a completed project to somebody else.
It wouldn’t be so terrible if the client were really dissatisfied. The problem is, sometimes people ask for refunds even if they ARE satisfied. For instance, in my two years of selling infoproducts, I’ve only had to make two refunds. One was because “It wasn’t what I expected.” The other was because “Your product was great, but I need the money.”
If you’re a freelancer, you simply cannot afford to return a client’s money for flimsy reasons like this. This is why I don’t believe freelancers should provide money-back guarantees.
I’ve even asked a couple of experienced and highly successful copywriters about this. None of them give guarantees on their work. The main reason for this is that the success of a marketing piece is a result of many factors:
- How targeted the audience is
- The design and lay-out of the piece
- The actual offer
- The timing
It would be foolish for a copywriter to guarantee a certain conversion rate, while being unable to control all of these factors.
At best, these copywriters promise a specific number of revisions–within the original scope of the project–to produce copy to their clients’ satisfaction. I use this approach myself.
What Do You Think?
What are your thoughts on guaranteeing your work? Do you do it, or not? If you don’t have a money-back guarantee, how do you reduce the risk for your clients?
Let us know what you think in the comments below. And if you liked this post, share it by liking, digging, retweeting, stumbling and other ways of spreading the love. We’ve placed buttons under this post to make it easy for you.
Image by christianhaugen
Related posts:
- How To Provide Excellent Customer Service
- How to Get Clients to Absolutely Love Your Freelancing Work
- Insider Secrets: Freelancing Shortcuts That Really Work
- How to Partner with Others to Work on Your Freelancing Project
- “Take Our Daughters and Sons to Work Day” for Freelancing Parents
About the author: Lexi Rodrigo is the creator of The Savvy Freelancer, a blog that's all about achieving creative and financial freedom through freelancing. Check out Lexi's free guide, 31 Days to Start Your Freelancing Business (or Make Yours A Better One).
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37 Comments
Stephan
March 29th, 2011 at 9:18 amGreat argument against offering a money-back guarantee. However, your point about it increasing sales is valid, and with such a competitive marketplace freelancers can use a guarantee to elevate themselves above the rest.
How? Only guarantee that which you can control. Spell it out so there are no surprises and you keep the abusers to a minimum. “Money back” probably isn’t the best form of guarantee for all the reasons Lexi states, but “satisfaction” or “limited” guarantees for certain parts of your service mix can be huge. Think of the things that you do best compared to others, and what common challenges you’re confident you can overcome. When someone is comparing your services against others’ and sees that you’re guaranteeing the identical things they’re most concerned about, the job is yours. Best part, your guarantee isn’t risk to you, this is how you already do business.
We offer a guarantee that website updates will be completed within 2 business days or they’re free (we also spell out the terms to be totally clear about the expectations). Our business model has to sell the value of outsourcing your website updates versus doing it yourself, so providing a guarantee dispels the age-old perception of “waiting forever for my web guy to get the job done.” Even if the job includes a CMS, the client knows we aren’t wiping our hands clean of the job. The minute we bring this up in a prospect conversation, we put the client at ease and usually get the job.
It also goes without saying that the better you are at communicating and managing the relationship, the more confident you’ll sound; and confidence in yourself and your services is an unspoken guarantee that will resonate with your customers.
Stephan
March 29th, 2011 at 9:28 amGuarantees instill confidence as Lexi says. So why not just use the parts of your service model that already instill confidence in your customers as “guaranteed?” A money-back guarantee doesn’t make sense, but satisfaction or completion guarantees can work very well for people in the service business.
we offer a completion guarantee on website updates, because our business model sells the value of outsourcing your website management versus DIY solutions (you have better things to do than be a webmaster, like running your business). But there’s a stigma toward webmasters that they take forever, so our guarantee puts the client at ease and gives them the confidence in us to buy into our service model. Even if there’s a CMS on the website, we will still honor the guarantee. The terms are spelled out quite accurately on our website, so there are clear expectations, and we never feel like we’re being taken advantage of.
Bottom line: only guarantee that which you can control, and use guarantees to ease common concerns for your industry to win yourself more business.
[sorry if this double-posted, my browser froze]
Steve Vitek
March 29th, 2011 at 10:06 amI am a technical translator who translate mostly Japanese, German and French patents to English. I don’t have a money back guarantee and here is why:
Let’s say I have a money back guarantee. I have just finished a translation for an agency that costs one thousand dollars and the agency (a broker) just sold my translation to a patent law firm for one thousand eight hundred dollars. Their profit is now eight hundred dollars.
If I have a money back guarantee, all they have to do is say that they will not pay my invoice because they are not happy with my work for some reason.
Their profit is now one thousand and eight hundred dollars and since I have a money back guarantee on my website, there is nothing I can do about it. The agency can go to another translator next time and do the same thing again if the other translator also has a money back guarantee to increase their profit.
Superscriptor
March 29th, 2011 at 10:18 amI think that the “money back guaranteed” label should not be the reason that actually convinces the prospective client to hire you.
If you don’t offer something valuable, if you don’t market yourself in other ways than slapping a guarantee on your offer, you risk of effectively choosing the worst kind of clients. I am talking about people who don’t care if you’re good at what they need, they only care that they risk no money by hiring you.
And when things go wrong, even a little, they feel fully entitled to ask their money back.
Some Design Blog
March 29th, 2011 at 10:40 amAs Lexi said, providing a guarantee can lower the “barrier to entry” for hiring you. In some cases, a small risk can be worth it to gain customers, but I think the kind of service you offer makes a big difference. A website can be easily taken down, but a service that is mainly consulting or process-based cannot be undone, meaning the client can ask for their money back and still see the benefits of the work.
If it is a service where the results can be measured with a reasonable degree of accuracy, then the risk is mitigated to some extent because you can base your guarantee on measurable success, rather that on customer whim. A result-based guarantee shows that you take accountability for your work, but unfortunately, it is impossible to truly measure the results of most creative work.
Kimberly
March 29th, 2011 at 11:30 amI’ve seen writers offer this type of guarantee, but in the end I chose not to mainly because as Lexi stated my time is valuable and I put a lot of time, energy and effort into learning everything I can about a project, the client’s expectations, their competition and target market before I begin writing. I can never get that time back so I work extra hard to make sure that I understand the client’s objective, get all of the information I need before and throughout the duration of a project. It’s a collaborative process – it’s up to me to get the information I need to complete a project and it’s up to the client to cooperate and provide said information as needed.
Like Lexi, I offer clients a fixed number of revisions (NOT rewrites) and a deadline for completing them. Steve also brought up a good point – what’s to keep a client from refusing to pay because he is unhappy with the final product? Most clients are on the up and up, but this could turn into an issue as well.
Gold
March 29th, 2011 at 11:36 amA “money back guaranteed” is a good idea for some things. It doesn’t sound good if you are trying to fulfill the clients idea which comes from the client’s head or mind.
Have you ever loss seeing the cursor on your monitor’s screen. The question is why did it take you so long to find it since it since was always there in the first place???
Claire Wagner
March 29th, 2011 at 11:53 amI go pretty far in the opposite direction from a guarantee. I work very hard and have a lot of knowledge about my clients’ products and services (for the most part), but every proposal I write says that they are ultimately responsible for the accuracy and completeness of each piece. I also offer a fixed number of revisions. If for some reason – and I can’t think of when this has happened – they just don’t like my style, then we don’t work together the next time.
Arevik
March 29th, 2011 at 12:36 pmI don’t have the money back guarantee. I am a translator who deals with English to Russian or Ukrainian and vise versa translations. I think that there are at least some versions of interpreting the source text into its target language. In a way, it is a ,atter of creativity. So I cannot guarantee that my customer would love the exact way I translated, i.e. the words I chose. I didn’t have such incidents to be true, but I always discuss the terms my customer would like me to use, since from my practice I know that different companies may have different terms for the same conceptions.
Christina
March 29th, 2011 at 12:57 pmI find that graphic design clients tend to be very flaky. They normally don’t know what they want much less liking junk design. So giving a money back guarantee for something that costs over $1000 (logos, ads, websites) isn’t conducive to conducting a profitable business. Mainly because you can’t legally write them off as losses.
What happens if you order 1000 business cards and the client approves them but you gave a $ back guarantee? It’s just not something a designer has the time to do.
I really do like Stephan’s idea about adding value for the client to want to hire you.
If a client buys my $660 logo, it’s not written on my website, but I do a focus group for my logo designs to help the client determine which logo will be more beneficial to their market. I just started doing this in the fall and it’s been popular. I streamline my focus groups based on the type of company and the client receives the nots and occupation of each focus group member.
Great article…it really makes you think about how good you feel about your work.
Christina
March 29th, 2011 at 12:58 pmI have a typo above ‘nots’ s/b ‘notes’.
Rakesh Kumar
March 29th, 2011 at 1:01 pmStill i haven’t provide any product or services in which i have to give guarantee but thanks Lexi for suggestion. It is better to keep them in future.
Sponsi
March 29th, 2011 at 3:35 pmI give another type of guarantee because in Poland people are used to cheap students using pirated software or big agencies where everything costs hard money. I give “my personal guarantee” at the end of my offers. It’s as follows: “As a modern and committed designer, respecting hard work and aware of latest trends and technologies, I would like to state a guarantee concerning my work.
- I use only legal software and materials used by me are taken or bought from legal sources.
- All the designs and content prepared by me do not bear any features of plagiarism, that is conscious copying of other people’s work.
- I work according to modern standards and trends of webdesign and coding. Just a note that I prepare Internet Explorer 6-compatible websites only on demand and it can include 20% to 33% higher fee for creating a website.
- The highest quality of my work is guaranteed by the fact that I still improve my skills through self-education, attending conferences, taking part in online discussions and exchanging ideas and views with the online webdevelopment community.
- I work in an atmosphere of respect, cooperation and division of responsibilities between those fulfilled by me and those which are on the part of the customer as well as third parties (e.g. preparing materials, responding to my questions, contacting printing companies, etc.).
That should be enough. I don’t think offering a guarantee is a proper thing to do in our business (design, etc.). I just can’t imagine that. We are not plumbers – and even they don’t provide clear terms of guarantee, it’s just “we’ll see how it works.”
Christina
March 29th, 2011 at 4:09 pm@Sponsi….. beautiful statement. I can’t even begin to say how many times I’ve had to explain to a new client that the logo they just paid $1000 for is clipart and cannot be trademarked or copyrighted. So your statement sums it up completely.
Lucian
March 29th, 2011 at 10:18 pmNah. You have a portfolio, a blog where you showcase articles with your experience and clients should hire you based on that as they already know what to expect.
I think that having money back guarantee proves incompetence and under-confidence. You will also look cheap so please don’t do it.
Issa @ Ajeva
March 29th, 2011 at 10:34 pmThe very idea of a money-back guarantee feels cheap already and it sounds like you can’t deliver great work in the first place so you’re offering this safety net. I’d say NO to that. You can however come up with a certain scope of free revisions if the client don’t like what you produced, but to have someone hire you because of the guarantee may be an open invitation for exploitation. When someone bids for an antique cartograph at Christies or Sotheby’s, the buyers don’t get a money back guarantee when they see slight yellowing or spots made by the passing of time; they simply pay for the ‘value’ of the item.
Kay Ross
March 29th, 2011 at 10:35 pmI agree; a money-back guarantee doesn’t seem to work if you offer an intangible service – you can’t get the work or the time back once you’ve given it to your client. I’m a marketing consultant, copywriter and editor. I’ve always felt that I can’t guarantee the results that a client will get – I might write a brilliant brochure or website, but I have no control over how effectively a client uses that material after I’ve delivered it. Their salespeople and their delivery systems might be dreadful. And “satisfaction” is such a subjective thing. How do you measure it?
Angie
March 29th, 2011 at 10:44 pmMoney back guarantee? No way. My contract states that there’s a non-refundable kill fee, so I let them know that on first contact. And then I let them know – if they don’t already – why they’re going to love what I give them.
Satisfaction guarantee? Sure – if they’re waffling, I’ll mention that I’ll do up to two revisions. I don’t say “rewrite” because that puts it into the client’s head that a) they may need me to rewrite something and b) that I’m not confident enough in my abilities to know that I’ll give them what they need the first time.
facebook profile pics
March 30th, 2011 at 1:04 amwell, guarantee is important in some work where we don’t have to deliver something to the buyer.
Morgan
March 30th, 2011 at 11:29 amGuarantees in the service industry wouldn’t go over so well.
I do voice overs and because of this, I can guarantee that I’ll do my very best to redo it over and over again until I get it to their exact specifications. But as far as giving a ‘money back’ guarantee, they come to me for my services and not a product. They liked my demos and decided to solicit me for a job.
If I were offering a product, I would do it. But I don’t do it for services, since the client can easily ask for changes.
Awesome article, though, really got us thinking!
Courtney Ramirez
March 30th, 2011 at 1:17 pmYou can easily offer a guarantee of service! It makes the client feel confident in your company – and it’s simple to do. Rather than guarantee outcome, which you really don’t have any control over (because of all the other factors surrounding your work), you can guarantee your service – that you’ll deliver exactly what you promised, when you promise it.
Kay Ross
April 1st, 2011 at 12:49 am@Courtney – you wrote “you can guarantee your service – that you’ll deliver exactly what you promised, when you promise it”. But doesn’t that go without saying? Isn’t that the bare minimum that any client expects from a service provider? Lexi’s question was more specifically about offering a MONEY-BACK guarantee. Do you offer a money-back guarantee if you don’t “deliver exactly what you promised, when you promise it”?
Steve Vitek
April 1st, 2011 at 10:12 am@Courtney – you wrote “you can guarantee your service – that you’ll deliver exactly what you promised, when you promise it”. But doesn’t that go without saying?
That was my thought too. “To deliver exactly what I promised?”
As opposed to not delivering what I promised?
Wow, what a guarantee.
Courtney Ramirez
April 1st, 2011 at 11:23 am@Kay In the two times in my career that there’s been a delay on my end due to circumstances, I’ve offered a discount on the final payment. So I guess one could term that a money back guarantee.
In this business, there are so many people that drop the ball, guaranteeing your standard of service (not only delivering on time but all the other little touches that make your service unique) can set you apart from the pack.
JF Garsula
April 9th, 2011 at 9:30 pmI gave a money back guarantee to my client before and he paid 50% of the whole project price. After giving mock up designs and even completing the whole theme files of his site, all I need is login credentials of his website to set everything up, he suddenly disappeared. A couple of months after he reappeared asking for a refund.
Should I give him a refund?
Steve Vitek
April 10th, 2011 at 7:03 amShould I give him a refund?
Yes, you gave him a money back guarantee.
That’s why money back guarantee makes no sense to me.
Olatunji
May 21st, 2011 at 12:25 pmNice write up, but i would suggest that instead of giving a customer a 100% money back guarantee.we can include a 25 % returnable fee in the signed agreement in case if the client is not happy with the end product.That has really been working for me.I think the remaining 25% will cover our meeting and transaction expenses.say for example i agreed to design a Logo for a client for a fee of $100. collecting a down payment of $50 is a nice idea.then in case of If the client is not satisfied i will refund $25.
Martin
July 9th, 2011 at 6:06 pmThat’s why money back guarantee makes no sense to me!!
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