Let’s continue on this very important topic of risk reversal.
In the last issue, I gave you the first method of reversing risk. The Total Monetary Risk Reversal method.
The next one is the “Better than total risk reversal”.
In this approach, you, the seller, not only guarantees a complete refund if the buyer is dissatisfied, but also offers a bonus incentive that the buyer retains even if they seek a refund. The bonus is usually a product or service that complements the primary reason for the transaction. It could be something else also.
Before I give you an example, I want to mention that in my coaching program, I’ve received many email messages, where my subscribers asked me to address and write about some of the problems they were having. Risk Reversal is one of the most asked questions I get. Each month I have given them the step by step methods to solve those problems but also at the same time to build their business by Creating More and More Customers. When you get a few moments, please go to www.buildyourbusinessfast.com and let me know what you think of it.
Let me give you an example that I implemented in my bank:
We offered a duffel bag as a bonus gift if they came in to open an account. If they decided not to open an account they kept the duffel bag. By the way, the duffel bag had our name and other benefits we offered printed on it, so no matter where they went, we received free publicity.
The “better than risk-free transaction” acknowledges and rewards the customer for having enough faith to commit to purchasing and using your product. By creating a better than risk-free offer, you increase the appeal of your offer because there is a bonus incentive on top of a risk-free offer.
Let’s go to the next concept. The Emotional Risk Reversal.
With emotional risk reversal, you are taking the necessary steps to increase your prospect’s level of confidence and reduce their fear before they even make a purchase. This type of risk reversal is used by many professionals because a monetary risk reversal simply isn’t practical.
Using an emotional risk reversal approach, in which you could urge prospective clients to first contact some of your customers, is a very effective method of risk reversal. Your prospects could ask these previous clients about their overall satisfaction with your service or product.
You can use emotional risk reversal by offering a free initial consultation to potential clients.
It never fails to astound me the small number of business owners that never practice risk reversal. I guess that one reason is fear. Many people in business lack faith in the quality of their product or service and they fear that reversing the risk will hurt their business. They probably fear that people will take advantage of them.
Please trust me on this point. I’ve done risk reversal in over 32 successful businesses that I’ve created. There’s no need to fear risk reversal. It may sound scary, but I can tell you from experience that you will profit enormously from risk reversal. Believe me when I say that most consumers aren’t looking to take advantage of business owners, all they want is to make a sound and be confident about their decision.
Let me give you another example about a music store that I consulted with. I created a risk reversal method that created more customers than he ever had before. When a large Towers Music store opened nearby, almost all of the independent music stores were driven out of business. Except for my client.
I had him make the following risk reversal offer. “Our customers will totally enjoy any CD they purchased or it was FREE with no strings attached.”
If you purchased a CD from him and didn’t like it, you got your money back. It was as simple as that. He was flooded with customers who would have normally gone to Towers.
The point is, even though you may have a small number of customers who will ask for their money back, these refunds are nothing compared with the tremendous growth your business will have if you create a risk reversal system.
In most situations, you can also profit from these refunds. My experience has been that when people want a refund, they only want to move up to a higher level, to a better product or service.
In my opinion, all refund requests are really opportunities. Even if they are not an opportunity to upsell to a better product, they are at least a chance to learn something about your business, why they are asking for a refund, and take this knowledge and use it to change your future sales approaches.
If what I’ve written doesn’t convince you, and you’re still concerned about what would happen if you created a risk reversal system, then just test it. You don’t have to make a full-blown commitment. Do it on a smaller scale. You can try it out with one salesperson calling on 30 people that come into your business, or with 50 letters you send out.
You want to find out how many people say yes when you offer risk reversal than when you don’t, and also you want to find out after you’ve sold your product or service, how many asked for their money back. You can do this at a very small cost to your company.
By doing this, you are able to determine your net advantage in offering risk reversal.
And once you’ve tested this approach and seen what effect it has on customers and the sales that it generates, then implement it throughout your business.
The last thing I want to mention is not to add qualifiers to your risk reversal system. Conditions will thwart the very power and advantage this concept offers you. Don’t make it hard for people to do business with you. Don’t put any hurdles in front of them and don’t make it difficult for them to start a relationship with you.
Well, that’s it for this issue. If you need step-by-step instructions on how to implement this and other ideas I give on creating customers, just visit Build Your Business Fast Academy and sign up for my one-on-one coaching program.
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