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Reverse The Risk And Boost Your Profits
As a business owner or marketer, if you don't reverse the risk in your product and/or service offerings, you're really missing out in what can be one of the most powerful weapons in your marketing arsenal.
Risk Reversal Defined
Risk Reversal, in essence, means that you, the business owner, assumes all the risks associated with the business transactions, and your customers none.
Why Reverse The Risk?
The main reason that you'll want to reverse the risk is so that you may boost your sales and profits.
Risk Reversal can easily be achieved by providing an Extraordinary Guarantee. An example would be an iron-clad, no-questions-asked money back guarantee.
Buyers, especially Internet Buyers, are generally skeptical. This is particularly so if they've never dealt with you or your business before. Your credibility is in question and the trust yet to be established. Even if they are your existing customers, it's imperative that you employ this powerful marketing concept of Risk Reversal by offering a strong and extraordinary guarantee...
... Here's Why:
Having a strong guarantee is one of the most effective ways to counter the skepticism and fears of the buyers in doing business with you.
If your customers or potential customers see a guarantee, especially an extraordinary one, they can be pretty certain that they'll get what they're after.
It shows them that you're confident about, and have a strong belief in, your products and/or services.
It also goes to show that you're reliable and trustworthy, and if they're not satisfied with your offerings, they've nothing to lose.
The end result is that you'll dramatically boost your sales and profits - sales and profits you would not have seen without the strong guarantee.
Here's an example:
Let's say in any of your promotional campaign, you normally sell 500 units of your product. Through a strong guarantee, you increase your sales by 8% or 40 units without spending any additional funds on advertising.
This translates to a total sale of 540 units for that campaign.
Let's say you later experience a 10% refund of the additional sale of 40 units, that is, 4 units (10% X 40 units), which you won't.
Even after the refund, you'll still make an additional sale of 36 units just by offering a strong guarantee. These are sales that you'll never get without the guarantee.
Now you can see how a strong guarantee will boost your sales and profits.
Then Why Are Many Business Owners Unwilling To Offer Such A Guarantee?
Many business owners have the misconception that people are only concern about the price of the product or service. Price, no doubt is a factor but only a minor one, and only to a certain extent. If the customers want something, and if you're able to address their concerns and fulfill what they want, they'll gladly buy what you have to offer.
Many business owners are also afraid that they'll be ripped off. Just in case you think that you'll be ripped off by offering guarantees, research have shown that this rarely happens as 99.5% of people are generally honest. Of course, there'll be a few moral rejects who'll take advantage of you but the additional customers that you'll gain will more than offset the few that'll take advantage of you.
Furthermore, very few people will go through the process of actually returning something that they've bought, unless of course, you've infuriated them. If you're a savvy business owner or marketer, you should know better than to infuriate your customers.
Think about this - the process of asking for a refund is a socially uncomfortable one; it takes confidence and self-assurance to ask for a refund even if you're openly offering one.
Now, I must add that in order for your guarantee to achieve the objective of boosting your sales and profits, you'll need to bear the following in mind:
1. You'll need to have a quality product and/or service
2. You'll need to address the customers' deepest frustrations
3. There shouldn't be any unreasonable conditions attached to it
4. It should preferably be for at least a minimum period of 90 days or more.
An example of a strong guarantee will be:
"Try out the product for a full 365 days! If it does not double your sales by the end of the 365 days, just return it and we will cheerfully refund your full purchase price."
I believe you can see the power of the above statement. It implies that you're so confident of your product that you're assuming all the risks, not the customer.
Once you've got over the fear of reversing the risk, you'll be ready to offer bold guarantees. A bold guarantee sends the message to your potential customers that "you're reliable and your offerings are of high quality". It takes away the risks associated with the purchase of your products and/or services, and it also lends you credibility.
As you can now see, risk reversal is one of the most effective ways to boost your sales and profits. Put this powerful marketing concept into practice immediately. Spend time on creating a sound and powerful guarantee, implement it, and you'll see your sales go through the roof.
About the Author
Copyright 2005 by Larry Lim, MarketingSphere
Larry Lim is a practising marketing strategist and tactician who dishes out highly effective marketing strategies and tactics that will enable you to successfully start and grow your business on the Internet.
His Internet Marketing Strategy website is jam-packed with internet marketing secrets and softwares that will skyrocket your sales, and shoot your profits through the roof.
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