Came across this letter sent in to Straits Times (27 Dec) about Botak Jones, the restaurant that serves ‘damn good American food’. The letter reminds me once again how easy it really is to build an authentic business and in so doing win the admiration of our customers. What better way to build customer loyalty!

Lessons we can all learn from this:

Consumers love to deal with authentic business. One that has a ‘heart’. To be an authentic business, all you really need is (a)passion for your business and (b)to provide service with sincerity. When what you delivered is below expectation, like what happened to Edwin Neo in the letter, then let your sincerity guide you to take the necessary action. 

If you are proud of the quality of food (or any other product) that you sell, it makes complete sense to provide a complete refund and, like what Botak Jones did, take a step further and give them something better at no charge.

Unfortunately, from my interaction with many business owners in Sg, a complete refund and free replacement is such a bizarre concept! They are very resistant to implementing a money back guarantee policy. I find this strange.

Two PR benefits of a money back guarantee policy

When you offer a guarantee like what Botak Jones does, then

1. it lowers the risk to the customers and therefore they are more likely to buy your product than your closest competitor

2. the bad experience of getting a bad product/experience will be downplayed by the sincerity of your response. Customers will more likely to say good things about your company despite the bad experience.

I understand that many business owners in Sg are too afraid that customers will take advantage of their money back guarantee and that their profit margin will be lowered.

People are generally nice and sensible. Customers who exploit money back guarantees are always in the minority. If you experience such a customer, would you want to hold on to him? I will rather drop him and never deal with him again.

As for lowering profit margin, this can only happen if a significant percentage of your customers are asking for refund. If this happen then all signs points to a poor service/product quality. It’s time to do a business review or drop the product altogether.

I managed to get my hands on Botak Jones’ brochures. I was not surprised to see them proclaiming their guarantee. The owner even wrote a personal letter to the reader and signs it off! How nice! What an easy way to show their sincerity and providing “damn good food”. I bet he didn’t need to pay branding consultants to do that. It’s just common sense.

Your comments please:

What is your opinion on money back guarantee? Is it worth while? Is it effective in fostering a good reputation for business?