| Risk Reversal 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:
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 won’t 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. | |
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