Minimize your Advertising Liability Exposure

In the crowded realm of advertising, product developers are always on the hunt for strategies that can cut through the noise and capture consumer interest. One such strategy is the use of guarantees. While guarantees can bolster consumer confidence in a product or service, they also come with a set of challenges. Here, we delve into the pros and cons of using guarantees in advertising.

Pros of Using Guarantees

1. Builds Consumer Trust

You have used your beard oil on hundreds of your barbershop customers with great results.  Offering a guarantee signals to consumers that a business is confident in its offerings. This confidence can translate into trust, making customers more comfortable with their purchase decision.

2. Differentiates Your Brand

In a market like the hair product industry which is saturated with similar products or services, a straightforward guarantee can differentiate your brand. It acts as a promise of quality, setting you apart from competitors who do not offer such assurances.

3. Reduces Perceived Risk

For many consumers considering various medispa services, they are concerned their investment will not bring about the intended results.  Or, even worse, will have an adverse effect.  A guarantee, especially a moneyback guarantee, mitigates this fear, reducing the perceived risk of trying something new. This can lead to more ease in customer acquisition.

Cons of Using Guarantees

1. Potential for Misuse

Guarantees might attract customers who misuse the policy for their advantage, leading to higher return or refund rates. Someone says they don’t see any difference in their skin out of treatment and triggers the moneyback guarantee.  This could require your business to provide this moneyback even though you and all your staff do see a difference.  It puts you in a situation to give the money back or spend the money on disputing their claim.  This could potentially harm a business’s bottom line if not properly managed.

2. Increased Operational Costs and Time

Managing returns, exchanges, and customer service for guaranteed products can lead to increased operational costs.  This is especially true if your established business is a salon or barbershop and this product line is something new.  Businesses must weigh these increased expenses and workload against the benefits of increased trust and sales.

3. Unrealistic Expectations

Sometimes, guarantees can set unrealistic expectations among consumers. If you product uses blanket language when you really have only seen the results on a segment of the population, then you are setting unrealistic expectations.  If a product doesn’t meet these expectations, in the age of social media, the dissatisfaction can damage the brand’s reputation.

Regardless of your product, guarantees can be a powerful tool in advertising, driving interest and establishing trust. Although your general liability policy may cover advertising liability, businesses must carefully consider how to implement these assurances to avoid potential pitfalls. By striking the right balance, companies can harness the benefits while mitigating the downsides associated with guarantees.