A lifetime warranty is something that is generally misunderstood, and you won’t find too many businesses who offer it today. Generally, that is most likely because businesses are afraid of it and assume they may end up dishing out free products to all of their customers, when that really isn’t much of a huge concern if you offer it.
We’re going to briefly get into the virtue of a lifetime warranty here, to give you a bit more information about why you would want to offer it for your customers.
It Doesn’t Seem to Make Good Business Sense
Chances are, if you’re a fairly new small business, you’re probably not financially secure enough to offer a warranty at all, but it’s not outside the realm of possibility that you would want to offer it one day. It’s something you usually only find in large companies.
You might think, how can it be advantageous in any way for a business to offer a product warranty for life? There doesn’t seem to be an obvious benefit for a company, since you only pay out without any revenue coming back in. It makes a lifetime seem like a very long time.
So, why would you ever do this? It doesn’t seem to make sense, but the concept actually does make a lot of sense because the idea is not to just give away a bunch of free product–the idea is to make your customers love you.
A Lifetime Warranty Isn’t Likely to Put You Out of Business
As a business owner, the words, “warranty” and “lifetime” together don’t naturally give you a whole lot of comfort. For the owners who decide to do it, however, it’s not a big concern for two reasons.
One, they’re banking on the fact that their product is so good that it will never need to be replaced, and if someone did capitalize on the warranty, the business can put some limitations on it so the offer isn’t abused.
Secondly, if it starts to blow out their bottom line, they can always rescind it and switch to a time-limited warranty. Though it’s pretty rare as it is, you would never see a lifetime warranty at all if those companies thought it would put them out of business.
Instilling Trust in the Customer is Paramount
The primary goal of offering a lifetime warranty is to let customers know that you stand behind your product. In a nutshell, you’re saying to your customers, “We’re so confident in our product’s quality that we promise to replace it anytime if something is wrong with it.” It’s the same idea behind the policy, “Guaranteed, or your money back.”
Incidentally, it isn’t meant to be an insurance policy. A lifetime warranty is more of a marketing strategy than a replacement plan. Furthermore, you want your customers to know that if anything does go wrong, that your company will be there for them.
One of the most infuriating things for a customer that you can do is, when they have a problem with your product or service, to basically tell them, “Sorry, you’re on your own.”
Whether you offer a lifetime warranty or not, it’s extremely important to establish goodwill with your customers, and to show goodwill whenever you have the opportunity. Establishing goodwill is one of those things that easily sets you apart from competitors and inspires really good word-of-mouth, as well.
It’s Important to Start with a Quality Product
Even though the goal is mainly to inspire trust with customers, you do want to make sure that what you’re selling is actually trustworthy. If you were to promise to replace your product and it’s of a low quality, then you could end up dropping a good chunk of change on replacements.
The idea is to have such a quality product that it rarely, if ever needs to be replaced. That’s how you can succeed with a lifetime warranty because you:
- Promise to give customers a quality product
- Fulfill that promise
- Replace it if needed, as promised
If you can achieve that, then there’s not much risk of losing a significant amount of money. Customers are only occasionally going to claim the warranty because they won’t need it, nowhere near enough claims to shut down your business.
What if People Abuse the Warranty?
There is always the chance that someone is going to take advantage of the warranty when they don’t really need it, but what you can do to avoid that is to make your lifetime warranty abuse-proof by adding minor limitations to it.
Some companies will actually make this a frustrating process for the customer, which we’ve all seen before. Have you ever mailed a product back to a company, and they responded by saying that your particular item is not covered by the warranty for some ridiculous discrepancy? That’s when the whole goodwill thing goes out the window.
What you want to do is only limit the warranty just enough to weed out people who are trying to get something for free when they don’t need it, such as a customer who has an item that clearly has nothing wrong with it.
In general, though, most people don’t want to go through the hassle of returning an item, waiting for you to process it, then waiting for you to send it back, unless the thing really doesn’t work at all. That’s something that no one really wants to deal with unless they have to.
You can also consider adding a small, flat-rate shipping or processing fee for people who claim the warranty, to help cover your costs while still making it worthwhile to the customer.
Offering a lifetime warranty is a great way to endear your customers to the company, and it does not have to be something that results in a big loss for your business. Any business owner is naturally nervous about this strategy. That is understandable, but it can truly be a tremendous way to make your customers love you and tell everyone to use your business, too.