What makes you afraid of doing business with an unknown company or person?
Do you wonder if they will be around next week? Do you think they may take your money and run? What if their product or service doesn’t fix your problem or achieve your goal? How do you feel if you make a bad buying decision? There seems to be a lot of risk when contemplating working with a new company.
These are just some of the questions that may go through your head as you decide who and what products and services you’re going to buy. From your perspective you have a lot of risk buying as a consumer. In fact you seem to have all the risk on your side of the transaction, and the seller has none. Their money back guarantee could be worthless for all you know.
How does this impact you?
As a small business owner it can make selling a nightmare. Your sales cycle can get even longer than it already is as your prospects decide if they should even do business with you. This impacts cash flow in your business and makes your life even more difficult. You don’t need things to be any tougher when it comes to growing your business.
One way you can help put your prospects mind at ease is to create risk reversal when they buy your product or service.
Beyond your prospects expectations
If you can meet your prospects expectations you’re probably the same as about 60% of the businesses out there. Just meeting expectations. So how do you move beyond your prospects expectations?
No matter how good you think you are, your prospect probably doesn’t know you that well. So you do present some risk in their mind. In order to fully put them at ease you need to reverse that risk. That means you do whatever you can to make your prospect think that you will assume greater amount of risk and guarantee their satisfaction.
How can you do it?
Refunding someone’s money is not enough. They want their problem fixed. If you’re doing some consulting work you may offer to work together with someone for a month at a rate of $10,000 per month. Your risk reversal could be that if they work with you for a month and are not delighted with your work they get all their money back. The bonus is that they can also keep the work you did. Now that’s risk reversal.
The prospect can get all their money, and keep the work you did? Wow, how can your prospect lose in that deal?
So to start using risk reversal in your company you need to identify the obvious risk. Then you’ll decide on how you can reverse your prospects risk. Then your last step is to identify the not-so obvious risk of your prospect and insure them on how you will reverse that risk also.
One of the businesses I own is a sandwich shop. To reverse the risk of someone trying something different, we guarantee satisfaction or give your money back, and your preferred sandwich. So you have zero risk, we assume it all.
Your objections to reversing risk
People will take advantage of you, my competition doesn’t do it, people should want your product, etc. Companies that are great at reversing risk have less than a 5% refund rate when they implement a risk reversal policy.
Risk reversal is a psychological trigger in your prospects mind that tells them you’re so confident in your product or service that they have nothing to lose by doing business with you. One of the key benefits to you and your company is that with a risk reversal policy in place you work much harder at continually improving the quality of your product or service, just so you can minimize refunds. This also improves the efficiency of your company.
As a last benefit, you also become a much more referable company because of your confidence and your guarantee of risk reversal.
So go identify the risk, reverse the risk, and promote your risk reversal to your prospects.
Be awesome and take action.