I get how the money back guarantee can work on a project, but what about if this a retainer client, what would a good guarantee be then?
I invited my colleague Jonathan Stark to answer this one. He’s got a ton of experience doing retainer work. Not “lawyer-style” retainers where you’re collecting a deposit against future hours to be billed, but true consultant-style retainers where he’s gotten paid a monthly free for access to his experience. In other words, Jonathan has experience with the higher-profit kind of retainers. The kind you’ll have access to after you’ve positioned yourself as a focused expert.
Here’s what he had to say about guarantees for retainers:
With any ongoing service for which clients are paying monthly for access to your expertise, you could offer a 100% money back guarantee for the first month. For example, here’s the guarantee I offer for my monthly business coaching retainer for software developers:
“If at any point in our first 30 days you decide that the program is not for you, just let me know and I’ll refund your payment in full, no questions asked.”
Perhaps counterintuitively, the need for such a guarantee seems to be inversely proportional to the price of the retainer. As you approach the very highest end of the market, you will be approached by people who already trust you implicitly and for whom a 5-figure monthly rate is not particularly significant compared to their perceived value of the engagement.
I offer a monthly mobile strategy retainer for consumer brands that it is almost 10x more expensive than my biz dev coaching retainer mentioned above. I don’t believe I have ever offered any published guarantee on this service and it has been selling fine for many years. In fact, I suspect that offering a guarantee would undermine the near total trust that I have built up in the clientele; it’s existence would suggest that clients had been disappointed with the results in the past.
To use a car analogy: If you’re in the market for a McLaren GT, the last thing on your mind is a guarantee.
If you’re looking for support with running your software development business, I encourage you to check out Jonathan’s abovementioned coaching program. Jonathan has extensive experience with value pricing, proposals, retainers, and the art of moving from selling low-profit implementation work to selling high-profit “brains” work: https://expensiveproblem.com/
Talk to you soon,