The Audacious Guarantee

Sure, an audacious guarantee attracts customers. But it also forces you to raise your game.

When my wife and I had the idea for kitchen & bath CRATE (originally kitchenBOX) while walking down the exit aisle at Costco in 2011, we knew we had to do more than verbalize our promises to our customers. We had to have skin in the game. We had to put out money where our mouth was.

You see, the impetus of kbCRATE was this: the home renovation industry was broken. And while we've benefitted immensely from competing against pedestrian competitors, I'm sad to say that 13 years later, our industry is still broken. How do I know this? Well, among other things, home improvement customers still typically assume their project will finish late. It's part of the home improvement contractor stereotype, and it's usually true!

So, how could we convince our customers that when we said "we'll finish on time," we meant it?

We decided to self-impose a liquidated damages clause in our contract. That's right, when we launched, it was with a $250/day guarantee: we'd credit the final invoice $250/day for each day we were late.

And boy, did people think we were crazy. My business partner at the time thought I was crazy, my employees certainly thought (knew?) I was crazy; even our customers thought it was audacious.

Alas, it worked. And in 2024, we increased it to $500/day.

But along the way, this audacious guarantee had a fortunate byproduct: we failed many times to meet it. In fact, even now, we occasionally fail to meet it. Now, the lion's share of our misses are only a day or two. And for each of those, we finish one or more early. (We don't get $500/day for being early, although I wish we did.)

But to this day, we appreciate and embrace these late projects. Why? Because it's like a massive spotlight being shined on an area of our business that is ripe for improvement.

Each late project is discussed at our weekly staff meeting. If the reason for the delay is "fixable," the issue goes on our Traction IDS (a list of "issues" we review weekly). Then, we solve the root cause of the problem.

Fast-forward 13 years, and we've fixed so much. And our customers and our team are better for it.

So here's the question: does your company offer an audacious guarantee? If not, why not? Having trouble brainstorming one? Reach out. I'd be glad to help.

At the end of the day, making big promises not only makes you remarkable (worthy of remark) in the market but exposes your weaknesses. And if a quiet little voice tells you not to have such a guarantee because you're afraid of what it might expose, then all the more reason to lean into this discomfort.

Thanks for reading this post. I appreciate you. In return, please share this with those you know who may be interested.

Books of Note: Those interested in Entrepreneurship Through Acquisition (ETA) have a few seminal works to consult, including Buy Then Build (Deibel) and the HBR Guide to Buying a Small Business (Ruback and Yudkoff). But Codie Sanchez's Main Street Millionaire is new to the scene, and she nailed it! It’s a thorough and well-organized book covering the ins and outs of small and mid-sized business acquisition. Highly recommend!