Toro's No Risk Guarantee Case Study

In 2013, Toro Company ran a program called the “Toro® S'No Risk Guarantee: If It Doesn't Snow, Your Snowblower is Free”. This promotion took the risk out of buying a new snow blower from the Toro Company for certain states. The states that had a high yield of snow, Toro would offer if you purchased any Toro new snow blower, and it snows less than 10% of your area’s average snowfall, Toro will give you your money back. Areas that had snow fall less than 50% of the average, Toro would refund 10% of the purchase price. In addition to the percentage returned to the buyer Toro let you keep the new snow blower with it’s guarantee.

In the beginning of the promotion, Snow Risk increased actual sale over $135 million while only paying 4% of that back

in rebates. However, during the latter part of the promotion actual sales plummeted to just over $30 million conversely, there was a tremendous hike in rebates to nearly 20%. The rebate program ran from August 1 through November 15, 2013 on any type of Toro snow blower. In spite of an impressive increase in sales at the beginning of the program, the program fell short in momentum. I give the Toro Company sales innovation teams high marks for developing such a great plan.
A key point to look at here is the increase of snow blowers with the Toro Company rebate program and public safety. Public safety in very important. The U.S. Consumer Product Safety Commission (CPSC) which oversees public safety released a report outlining an average of 5,700 snow thrower related injuries every year. For an insurance company the findings reported by the CPSC are vital. The increase in snow thrower sales will more than likely the likelihood for more injuries formula for risk for injuries. Toro ‘No risk promotion sold 1,886,669 variations of snow thrower. To recoup this insurance companies will have to increase consumer’s premium medical cost. It seemed just for them to raise insurance rates to keep from going under.