Great post.  When I started my own practice in 2005 I decided to have the same guarrantee as David - because I think he (and you) are right.  

The othe part of David's guarrantee is the proviso that to invoke the guarrantee you must tell him what you're not happy with.  This is actually a powerful part of the package as it clearly says - 'I'm more interested in learning how to serve you to the best of my ability than I am about the fees on any given engagement'. 

Unsurprisngly, I have also found that by putting yourself at risk like that it is much easier to maintain the discipline required to really serve your clients at the highest level.  It is basically another driver towards even better client service, which of course, makes the likelihood that someone will invoke the guarrantee less likely. 

I once took a contract I hated (being a cleaner) and after about a week and a half went to by my boss and said, "I'm doing a lousy job, and I know I'm not going to do a good job, so I'm quitting and you don't need to pay me for the time I've put in."  His response was "I had been meaning to talk to you abou it. "  I kept the other contracts and even picked up additional work from him later.

This kind of advice is so nice because reading it, I think, "wow, I would never think that would work", and yet once again, generosity seems to work overall.

My experience tells me that “Trust Matters” is right on the money.  Whenever I have a dissatisfied client I go right into “How much discount do you want?” mode.  If, however, over time the client appears to be taking advantage I ask for a meeting and tell them what I’m thinking.  If the meeting doesn’t go well I tell them that our relationship is over.

Will, it's the paradox thing; always surprises me too, but it's true.  And what I hear Phil and Ian and Duncan saying is, be the first one to speak the truth of what's going on—which is just what we don't want to do.  But it works when you do, for all concerned.

Charlie,

Another great post (summary).  Use to build custom software and tell you what that is one tough business.  But you give and then you receive.  Had been stiffed a couple of times more because of trust and not really doing my research of the company to verify what they said was true.  Shame on me...But those paying clients always had understanding.

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Michael, you mean like in financial planning and advisory businesses?

Simple: refunds and discounts are hardly the only way to demonstrate integrity, in fact not necessarily the best.  If you act from a place of integrity, it will show up at the appropriate place, at the appropriate time.

Note the examples above were from situations of a dissatisfied customer.  If refunds are not legal, then I might say, "Look, this has not worked out, and I'm sorry, and I'm responsible.  I don't want you to suffer for it.  Let's talk about what I can do to make it right for you."  And then talk, jointly, with the client.  I don't know what the answers are--free advice, a referral to someone else, taking time to talk things through. 

And remember, responding to dissatisfied customers is not the only way to demonstrate integrity.  Maister demonstrates it up front through his offer for a refund.  I sometimes do it in the sales process by specifically suggesting a potential client talk to a competitor in addition to me, and giving them the competitor's contact info.

You can demonstrate integrity by being transparent about your service offering; for example, I find the financial planning industry gets lost in discussions about fee-only vs. commission--the real issue the clients want to know about is simply, how do you get paid, and roughly how much?  They just want transparency, not a justification.

Or, demonstrate integrity by making testimonials readily available.  Or, do it by offering samples--this is a great method for complex intangibles businesses.  See, for example, my article on "Selling by Doing, Not Selling by Telling."

My suggestion is to have integrity in all things, and it will show up.  As a practical step, consider the four Trust Principles:

1. Be client focused for the sake of the client

2. Behave collaboratively

3. Focus on the medium-to-long term

4. Be transparent.

I'll add that in a relationship (a series of interactions) there are often ways to "make it up" later down the road.  So you may not be able to give a refund, but you can do things for them later which show you wish to make amends.