Warranties

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I’m sure you’ve all seen Animal House.  It’s one of my favorite movies and most of the guys (and it is mostly guys) I know quote from it fairly regularly.  One of the lines I find myself repeating way too often comes from Otter to Flounder, the hapless freshman who lends the frat his brother’s car only to see it destroyed:

Flounder, you can’t spend your whole life worrying about your mistakes! You fucked up… you trusted us! Hey, make the best of it! Maybe we can help.

I thought about that this weekend listening to some of the news but it triggered a business thought as well.

Too much of what we see in politics – and in business – relies on “you trusted us” with no remedy.  The news items had to do with many of the “discussions” on programs – pipeline builds, tax code changes, a few others – that promise job creation, economic growth or other tangible benefits.  While this isn’t a political blog the thought crossed my mind that those discussions would be far easier if those jobs, for example, were guaranteed.  Let’s take the Keystone pipeline – one side says there will be 20,000 jobs created; the other says there might not be any.  Putting aside the environmental issues for a second, wouldn’t it be an easier discussion if the side promising the jobs signed a document saying they would create 20,000 permanent jobs in the US no matter what number the new pipeline supported?  Give a warranty, which is a promise to support your product.  And that’s the business point.

A vendor who promises results needs to be specific about them and compensated only when they happen.  If I buy a widget that the vendor says will increase traffic or sales, I’d be looking to base a good portion of their compensation on those results being achieved, and I’d even be willing to pay MORE for the product if the results exceed our mutual expectations.  I certainly get asked to tie my pay as a consultant into measurable results when possible.

A warranty is a promise – the product will perform as represented.  Reputable people will stand behind what they promise.  Isn’t that where you want to stand as well?