What customers want? : security
I will be starting on a series of “What customers want?” articles from now onwards. These articles are actually written based on my personal observations and opinions (and rants). Hopefully it’ll help people understand more about what customers really want. 
Or more like, what does Alvin Lim really want? LOL
Anyway, the topic here is Security. Everyone wants security especially during economy crisis like this. People want cheap and lasting stuff so that they won’t have to spend money to buy a replacement. In other words, they want to get something which is gives good value for money, or good return of “investment”. Why? Simply because buying a replacement can be very expensive. Imagine buying a new 32 inch LCD TV to replace the 2-year-old 32-inch LCD TV. With the combined price (which is very expensive), you can easily get a 42-inch Full HD LCD TV (I think…but well, it’s just an estimation).
I wonder if there's any company giving this kind of warranty coverage?
I know that few years ago, when people are still spending a lot, some of the cheaper stuff do not come with warranty period because it’s just too expensive for the businesses to offer that. Still, people will buy because if it doesn’t work, they can just buy another one. But now, situation has changed. More and more people are starting to feel the heat from the economy downturn and they are not willing to risk their hard-earned money on something which is not “secured” or without a warranty……unless it’s dirt cheap…like 80% off the original price.
Funny thing is, most businesses do not realize this and they still think customers are willing to risk their money to get something which can break down anytime.
This happened to me today (start of rant). I went to IKEA to look for an office chair and I found a RM 350 chair which is the type that I’m looking for. But it was over my budget. So I went to the furniture shop near LDP (Kelana area) and found an office chair which is pretty similar but RM 290. After some “discussion” with the sales guy (kudos to my mum who is very ruthless when bargaining for cheaper price), I managed to get the price of RM 260. Here’s our conversation after the “discussion”:
Alvin : So if I want this chair, do you think my car can fit in the box?
Sales guy : What box? This is cash & carry. This is the unit you’ll get.
Alvin : Oh.. display unit eh? Then is there any warranty period?
Sales guy : Aiyah, won’t break down one. It’s brand new.
Alvin : How would I know? Maybe you’ve put here for many months. So, is there a warranty period?
Sales guy : Nope. We don’t give warranty period for something this small.
Alvin : Ok, then I’ll get from IKEA.
Seriously, I rather fork out the extra RM 100 to get something brand new and also to buy the “security”. I don’t think I want to spend another few hundred buying yet another chair if the RM 260 breaks. It’s just too risky and certainly not a good investment.
That’s why if you’re trying to sell something to your customers, you must remember that most customers want security or some kind of assurance that the item will not break. If it does, at least, they want to know that they can replace the item with zero fee. Either that, or give them an extremely cheap price which will allow them to buy another new item if the existing one breaks.
As for me, I will still prefer to pay that extra money to get that “security” or warranty. No security, no deal. No assurance, no deal.
P/S….not sure if it is Assurance, or Insurance, or.. ? Ah well, I know “if” statement more than English now.
So peace of mind is worth at least 25% of the product price. That’s in the ball park of a study I once did on reputational branding. It shows why for the same product, customers will happily pay x% more to a trusted brand name than an untrusted one. It demonstrates how brand building can be an investment with positive returns.
And by the way, in my world, branding is NOT advertising. Rather, branding is an outcome of experience and reputation which no advertising company wants to touch.
At least give me 1 yr of warranty. I cant accept things without a guarantee.
@ Damien
Branding and marketing are not advertising. They are much more complicated than advertising since you are creating stories, scenarios, experiences, feelings, etc.
If people have very bad experiences with your BRAND, it’ll be very hard for you to change their mind.
Proton, anyone? Even though it’s cheaper, most people (with money to spare) will go for more expensive cars most of the time especially if they have very bad experiences before.
@ Harmony
It depends on what kind of item actually.
Yes, warranty period depends on what kind of item. This is a great post and how I wish my boss could read this.
“Funny thing is, most businesses do not realize this and they still think customers are willing to risk their money to get something which can break down anytime.”
If and only if my company can reduce the amount of direct imported goods from China which bypass quality assurance. They just like the import cheap low cost goods and sell it with high price. And guess what? The sold item spoiled after some time.
It’s considering cheating the customer’s money!
@ Apple
But if i’m a customer…cheap n got warranty..why not? 
Actually not all China products are bad. Some of them are pretty good too.
Hmm, actually the customer should know better than some cheaper stuff dont mean its good.