Risk Reversal
Risk Reversal
Businesses, even the most customer oriented ones, tend to expect the customer to take the risk when doing business with them. The premise is almost: "We have great products, so you can try them, if you pay us first," as opposed to; "We have great products and we believe in them so much, that if they don't do exactly what you want we don't want you to pay." The difference in attitude is subtle, but will have a huge impact on your customers' readiness to do business with you.
For a new business or a new relationship, the traditional stance makes the sale much more difficult. Trust is one of the most important ingredients in any sale. People will seldom part with money until trust is there. Trust takes time to build, and sometimes is impossible to build, until several interactions have occurred. Lack of trust causes hesitation and hesitation loses sales.
One way to build trust and credibility quickly is to reverse the risk. As a business, you can make an explicit offer to take the risk when a customer buys your product and thereby increase sales very quickly. Some examples of ways you can do this:
You can offer an unconditional full money back guarantee, if certain results are not achieved;
If you can afford it, you can agree not to deposit the customers cheque for 30 days, until the customer has had the opportunity to try your product or service;
You can offer a better than risk free guarantee. Offer the customer gifts for trying the product or service. If they are dissatisfied in any way, not only will you refund their money but they also get to keep the gifts, simply for trying your offer.
Most of us would refund an unhappy customer's money without hesitation; why not make it an explicit benefit of your offer up front. Build it into your advertising, direct response and sales pitches. Make it obvious, instead of casually mentioning it or only offering when necessary. Doing this will build trust and encourage trial and increase sales.
Will customers take advantage of you? Sure, some will, but the majority won't, and the risk reversal will increase significantly, the number of buyers willing to try your service. Think of those that abuse you as a promotional cost, you wont regret it. You'll find the advantages quickly outweigh the disadvantages.
You have to make your guarantee powerful and appealing. The more outrageous the better. I prefer to offer a better than money back guarantee, where the customer gets to keep something of value, simply for trying the product or service, regardless if they keep the product or not.
Customers should pay for your products and services, but you have got to make it easy for them to buy. This is one very effective way of doing it.
Risk Reversal - To learn more about this author, visit Michael Hepworth's Website.
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Bringing in new customers is expensive and often difficult. Here is one effective but frequently overlooked way to reduce the difficulty.
Businesses, even the most customer oriented ones, tend to expect the customer to take the risk when doing business with them. The premise is almost: "We have great products, so you can try them, if you pay us first," as opposed to; "We have great products and we believe in them so much, that if they don't do exactly what you want we don't want you to pay." The difference in attitude is subtle, but will have a huge impact on your customers' readiness to do business with you.
For a new business or a new relationship, the traditional stance makes the sale much more difficult. Trust is one of the most important ingredients in any sale. People will seldom part with money until trust is there. Trust takes time to build, and sometimes is impossible to build, until several interactions have occurred. Lack of trust causes hesitation and hesitation loses sales.
One way to build trust and credibility quickly is to reverse the risk. As a business, you can make an explicit offer to take the risk when a customer buys your product and thereby increase sales very quickly. Some examples of ways you can do this:
You can offer an unconditional full money back guarantee, if certain results are not achieved;
If you can afford it, you can agree not to deposit the customers cheque for 30 days, until the customer has had the opportunity to try your product or service;
You can offer a better than risk free guarantee. Offer the customer gifts for trying the product or service. If they are dissatisfied in any way, not only will you refund their money but they also get to keep the gifts, simply for trying your offer.
Most of us would refund an unhappy customer's money without hesitation; why not make it an explicit benefit of your offer up front. Build it into your advertising, direct response and sales pitches. Make it obvious, instead of casually mentioning it or only offering when necessary. Doing this will build trust and encourage trial and increase sales.
Will customers take advantage of you? Sure, some will, but the majority won't, and the risk reversal will increase significantly, the number of buyers willing to try your service. Think of those that abuse you as a promotional cost, you wont regret it. You'll find the advantages quickly outweigh the disadvantages.
You have to make your guarantee powerful and appealing. The more outrageous the better. I prefer to offer a better than money back guarantee, where the customer gets to keep something of value, simply for trying the product or service, regardless if they keep the product or not.
Customers should pay for your products and services, but you have got to make it easy for them to buy. This is one very effective way of doing it.
Risk Reversal - To learn more about this author, visit Michael Hepworth's Website.
Like this article? Share it with your friends
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the survey involves a bit too much thinking, imo. hopefully you get some good feedback. like the article though.
Commented on Risk Reversal. |
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Dianne CramptonDianne Crampton is an executive leadership coach, team culture consultant, author and president of TIGERS Success Series, Inc. Dianne has been helping CEO's and Executives connect their employees to their core values and goals for over 20 years using the trademarked TIGERS team culture process, which stands for trust, interdependence, genuineness, empathy, risk and success. To download a free white paper on behaviors that build strong teams and behaviors that will predictably tear them down go here. Dianne's contribution to the 2010 Pfeiffer Consulting Journal (an imprint of John Wiley and Sons Publishers) entitled TIGERS Hearted Teams is available in November 2009. Her new book TIGERS Among Us: 5 Winning Business Team Cultures And Why, Three Creeks Publishing will release in March 2010. To receive publishing discounts, subscribe to the free TigerTracks Newsletter here. - Visit Dianne Crampton's Website |
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