Product and Service Guarantees

Erik Sherman recently wrote in about a tech startup that offered a lifetime guarantee with its product in an attempt to get enough cash flow to remain in business.

Interesting idea, but it didn’t work because the company went out of business, presumably angering a lot of customers. Depending on the product, it might have been an opportunity for a competitor to scoop up some business, albeit at some cost by assuming the balance of the guarantee.

However, it raises the broader question of product and service guarantees, maybe not for life, but as best in class, best at the price point, etc. I have owned companies that guaranteed various products, ranging from chrome on exhaust parts to food in a restaurant. I’ve never paid out more than 5% or so in warranties, so they’ve been an excellent investment. We guarantee our courses as the best in class, certainly at our price point. We have yet to have someone say it wasn’t true and demand a refund. As far as we know, we’re the only educational institution that guarantees its classes, which is one reason we offer the guarantee.

What do you do, or should you do about this critical (in our mind) product or service differentiator?

To read Erik’s article to get some perspective on the subject, go to

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