Risk Reversal Will Sky Rocket Your Sales

    August 22, 2006

One of the top obstacles that you have to get over is the prospect’s sensation that they are at risk when buying from you. The more they feel that they are at risk, the larger will be their reluctance to buy.

To get over this hurdle, you need to reserve the sense of risk. You must assume the risk yourself.

Have you ever considered how many businesses transfer the built-in risks of conducting such a business to the customer?

Well, the following is a classic model of how this is done currently:

Recently, I went into a store to buy a anniversary present for a friend. I saw a sign on the wall behind the cash counter that said “Absolutely no refund after 7 days” and I thought to myself, “How negative is that?” It sounded so severe and foreboding, even threatening.

I was wondering why these people would want to lessen their customer’s goodwill by stating the policy in such a negative way and risk turning off even one customer. Especially, when the very same message could have been stated in a much more favorable way and help to make lasting customer relationships. For example, the same line on the store’s return policy could have read, “We will gladly refund your full purchase price within 7 days.”

The difference:

I am sure the difference in the two approaches is quite obvious. In the first statement, it is implied that the customer has to bear the burden of responsibility while the second statement indicates that the store management is willing to go out of his or her way to help the customer.

The above example is only a small one with perhaps only a minor negligible effect on sales, but the idea is not to state things in a negative fashion when there is a much better and more positive way of saying the same thing.

Your risk, your gain:

The wide range of anti-customer policies employed by various businesses never ceases to amaze me. The point that they all miss here is that, if you believe you have a sound product or service, then you should leave no stone unturned in advertising it to your customers.

For example:

“Our prices are the lowest in town or we’ll refund double the difference” or “If we don’t have your size in stock, we’ll make a special order and have it here within two days” or “Marketing that gets you results or it costs you zilch, nada, zero.

All of the above statements have a powerful and positive psychological impact on the mind of the customer. If you can perform, you must make sure you let people know. If you were the gift shop owner, as in the earlier example, you may get a few returns and refund requests to begin with, but those will be of no consequence at all compared to all the new business you will be getting just by thinking smart and communicating right.

As a matter of fact, studies have generally found that with product guraantees, the longer the guarantee period, the fewer returns. The longer guarantee gives the customer a sense that you really believe in your product.

Take for example an information product. If a customer has not had a chance to really get into the product and consume the information provided within the guarantee period, they may decide to return simply because they haven’t had the time to satisfy themselfves that the information is really useful to them.

On the other hand, if the guarantee is for a year, then they don’t feel rushed and if they never get to the product and it sits on the shelf unopened, they will have long forgotten all about it and the guarantee when the deadline comes up.

Taking the risk on yourself is good for your business.

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