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Guarantees and Risk Reversal
By Stefanie Strauss of Innovabiz Pty Ltd
Customers gain the benefit of your product or service AFTER the sale is made. This places an enormous risk on their shoulders. Will they get the benefits of their investment? Is your product as good as you say it is? It’s this risk that often prevents people from buying. However, customers are more likely to buy from you if you lower or eliminate their risk. Think of products with money back guarantees. Customers are more likely to make the investment where they feel that there is little risk involved. Risk reversal takes away the barriers from potential clients, and ensures that they continue towards the sale. Risk reversals and guarantees enable you to gain more clients and automatically differentiate your business from your competition. Prospects will value your product or service more because they assume it must live up to expectations. As a result you will gain a competitive advantage and win much more business! Here is an example of how risk reversal works. Notice the difference between the guarantees offered by the two sellers: A couple want to buy their children a kitten for Christmas. They respond to a couple of ads in the local paper. They look at one kitten and it seems ideal. The seller tells them “If the kitten isn’t right for you children, bring it back within a week and I’ll give you your money back” The couple then look at the second kitten. It also seems perfect. This time the owner says, “It’s important that your children are completely happy with their new kitten. Please take it home and let your children get to know it. If after 2 weeks the kitten is perfect for them, pay me for it. If not, just bring it back” The second man clearly understands risk reversal. He knows that his kitten is a good pet and also knows that after 2 weeks the children will not want to give up the kitten. By totally reversing the risk for the parents he has guaranteed the sale. A risk reversal strategy increases your probability for success. You will attract many many more clients by simply offering a guarantee that they will achieve the results. Clients will assume certain things about your business and choose your product over others because:
• You must be very good at what you do if you are guaranteeing the results
• You would be “stupid” to offer a money back guarantee if you couldn’t deliver
• The guarantee “proves” to prospective clients that you can give them exactly what they need. People choose to buy products that suit their needs best. Giving them a risk reversal or guarantee will automatically put you at the top of their preference list and give you a competitive advantage, allowing you to attract many more customers and increase your profits substantially.
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