Let’s Talk Guarantees and Warranties
Do you give one?
You have to for some things.
Consumer law says, “What you sell has to be fit for purpose, and do what it’s meant to do, and be free of defects”. Guarantee and warranty are not the same.
So you have to warranty that by law.
In New South Wales, building work has to be done properly, according to the places, materials have to be new unless otherwise specified, and the construction has to be suitable for its intended use.
So you have to warranty that.
On top of that, the builder (or the prime contractor if there’s no builder – kitchen fitter or bathroom renovator, for example) has to ensure the property is free from defects – 6 years for structural defects, and 2 years for non-structural defects.
The customer has a 13-week defects and liability period (this can vary) to identify construction defects.
So, this is for the prime contractor in a residential project. It’s similar in commercial and subcontractors will share in the responsibility.
WHAT MAKES A DEFECT THOUGH?
The Building Code of Australia and Australian Standards define what’s acceptable.
And there’s a NSW guide to Standards and Tolerances.
This is what I want to say about this – just because your customer thinks it’s a defect doesn’t mean it is – there are rules you can look at – use them – they protect you (and your customer).
Most disputes occur because of disagreements between owners and builders about the appropriate standards & quality of work.
I expect you guys to understand and know this better than me – what the standards are and the tolerances.
And I’m leaving subcontractors and commercial builders here too – it’s similar and I don’t want to be boring.
Your job to avoid conflict is to be clear about what standards you’re building to and what the tolerances are – upfront when you sign the contract.
So they are your obligations – you have to warrant that your work is to a certain standard and there’s a process for mediation if you can’t agree.
Confronting the issue early and setting your customer’s expectations reduces the likelihood of a problem and dispute to resolve.
Disputes are expensive and lots of trades will give in and fix something up that isn’t their fault rather than go through that process and all the reputational damage it risks.
So that’s warranties.
Make sure you comply with the rules and manage your customer so they know what the rules are and their expectations or defects are the same as yours.
So what’s a guarantee?
[Now the internet isn’t clear exactly on the difference between guarantee or warranty so I’m sticking with mine because it’s useful.]
A guarantee is something in addition to your obligations in law.
An additional promise you make to help your customers decide to buy from you.
Usually, you make a promise that protects them from something they’re afraid of – you take some of the risks out of their business decision.
So now we’re talking marketing and sales, aren’t we?
We’re still protecting them from the outcome being shittier than they hoped, aren’t we?
I do it.
Mine’s a money-back guarantee – if you start and change your mind within 30 days, I’ll give you your money back. It takes the risk out of the decision, right?
So what guarantee can you give?
Think about something that you can afford to give if someone calls you on it.
And something that is meaningful to your customers.
What are your customers scared of?
The best guarantee protects them from something they’re afraid of.
I’ll throw a few up for consideration.
For maintenance trades, people are quite nervous about having to wait for ages for a tradie to show up – it’s very common for tradies to be quite late and not to call. People hate this. It’s annoying.
You could guarantee you won’t do that and you’ll pay a fine if you do this.
People are afraid of prices blowing out unexpectedly – you could guarantee that won’t happen (this is basically flat rate pricing but worth presenting as a guarantee). You could guarantee a fixed price contract and no changes under – there’s a signed variations as no pay.
You could guarantee that all your people have Police Checks – people are afraid of ‘bad people’ being unsupervised on their property.
People are scared of the work not being of a good standard – you could guarantee they’ll be happy with it, and offer an end-of-job review and fix up of any issues.
Subcontractors can guarantee completion by a deadline. I’ve seen a same-day service guarantee.
I’ve seen a guarantee of sorts where the money for the job goes into a third-party account and is held until released to the trade business by the customer confirming the job has been completed to their satisfaction.
Do you have a guarantee?
Do you want to give mine a try?
Book a call and we’ll talk you through it.
There are four ways you can engage with me:
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4. Book yourself a 10-minute chat with me. We’ll talk about whether coaching is right for you now and if it is, we’ll go further into the process before you have to make your mind up.
See you later.