60-day money-back guarantee - A marketing hoax?

PERSPECTIVE: Social behavioral, marketing

Perhaps the true aim for these money-back guarantee strategies that we see in many of today’s products is to reduce the perceived risk among customers. Take the following scenario for example:

Salesperson selling supplementary pills
“Hi there, there is NO reason why you should not buy and try our ‘best’ product, the Super Duper C. Only $49.95 for a bottle of 60 tablets, we are confident that Super Duper C WILL keep you healthier and stronger. To show how confident we are at that, we have a 60-day money-back guarantee on the product. This means you can consume the entire product and GET A FULL REFUND if you are not satisfied with the product. ‘What do you have to loose?’

- As a consumer, you’d say:
"Hey, yeah… what do I have to loose? I can try a claimed ‘good’ product and yet get a full refund for my money if I don’t like it. I feel assured that my money will not be wasted if I buy and try this product.”

It is a marketing strategy
Sales of millions of products increased, revenue rise in billions of dollars in many markets. The money-back guarantee is so successful a strategy; it has almost become a standard for every product possible. Otherwise, consumers may not even buy their product. Surveys show that a majority of consumers need assurance from the product that they buy - assurance coming from the brand of the product, opinion leadership, recognition and of course, money-back guarantee.

Fulfilling the promise?
So you bought the supplements, you consumed them and realized that they are not working for you. And so you want your money back, you want a refund! So here, the bitter truth comes (for a majority of companies at least):

Step #1: Call up the company’s service centre, requesting a refund.

Step #2: Receive documents to be filled in and signed.

Step #3: Get refund of money.

Many companies do not fill their service lines enough to support the number of calls they get. Some do not even bother to! So you end up waiting for tens of minutes to over half an hour. I was stuck at the phone booth once for an HOUR! To my belief, half of the consumers who complain would renege and never bother getting a refund after all at Step #1. Or perhaps you got through and were told that you’ll receive some documents to be filled, and you get them within the week. In your surprise, there is so much to fill in and you have to send it back to them. This means about an hour’s worth of tedious effort to fill in the documents and then send them through post; and so another half of them decided not to get their refund after all.

Money-back guarantees – a hoax? I would say no. Companies rarely try to cheat your money, nor do they dare (at most cases). Court fees are always expensive and being liable is also not good a thing. BUT they know the behaviour of the consumer, as it is all up to the consumer. Read along the lines - "How much as a consumer are you willing to go through to get your refund and is it worth your time and effort?"

Typical consumer – Buy first, think later.

Why shouldn’t you hire a mechatronics engineer

PERSPECTIVE: Management, engineering

Mechatronics engineering is one of those pretty new hypes in the engineering field. It’s a discipline that integrates all mechanical, electrical and computer systems as one. Mechatronics engineers lean towards the field of automation and robotics. Any device that comprise of sensors, actuators and one or more microprocessors may be considered as a mechatronics device. I guess I do not need to touch on the history of mechatronics, except to say that mechatronics has “actually” been around for almost four decades now…

So you were thinking of hiring a mechatronics engineer? Think twice. If you need a mechanical engineer, you hire a mechanical engineer. If you need an electrical engineer, you hire an electrical engineer. However, needing a mechatronics engineer does NOT mean you hire a mechatronics engineer. Mechatronics engineers may not be able to deliver your organizational needs.

Here’s why -

After an adequate amount of research done on the mechatronics courses offered across several countries, Australia, UK, Malaysia to name a few, I have doubts that mechatronics engineers are offered sufficient knowledge upon pursuing any of the singular fields (mechanical, electrical or computer systems). Companies would put themselves at a pretty detrimental situation by hiring a mechatronics engineer for an electrical or mechanical engineer’s job.Automation is usually expensive and getting people to research and develop a fully automated factory for your organization would be very costly. Without proper analysis on the ROI of automation plus the amount of time that would be spent on would be very unwise.

But it is for the same reasons why you should not hire a mechatronics engineer that you SHOULD hire one!Mechatronics engineers are multi disciplinary engineers. Ask a mechanical engineer about anything electrical and they can tell you only “so much”, same for an electrical engineer who is asked about anything mechanical. It’s like talking African to a Chinese. Mechatronics engineers on the other hand, with their very-much-broader knowledge and scope would be able to understand more and ALSO learn and progress faster in the tasks they are assigned to (even if are not meant for those tasks).

Mechatronics engineers will always be around to help facilitate organizations in many ways. It is possible that mechatronics engineers can link all the entire engineering department of an organization. No other engineer would be able to find out and tell you about the economics of automation.

In short, as operations management and human resource management is about maximizing the utilization of resources, define the job design of that mechatronics engineer well enough. Otherwise, your organization would end up paying too much for it.

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Hullo. This blog will be left for my literature reviews, articles and arguments. Anything from the managerial perpective, marketing, social behavioural, psychcology and the list goes on... Some of my reviews may be controversial, or maybe even discriminating. So be warned... Do not drop me hate mails or hack into my system.

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