Strategy for Success – Risk Reversal

Posted by chucktrautman on December 3, 2020

Risk reversal is one of my all-time favorite profit-boosting strategies. When I coach entrepreneurs and small business owners, I always discuss the importance of risk reversal; however, it’s critically important when you are starting your business.

When you are starting out, you really don’t have a track record about which to boast to your prospects. Chances are also good that you have no testimonials yet. Your prospects have no reason to trust you, and skepticism is high on the list of reasons customers don’t say yes to your product or service. Zig Ziglar always emphasized that one of the five main obstacles to a sale is the lack of trust.

Many entrepreneurs and business owners believe that prospects don’t buy because of price.

High price is rarely the reason a prospect doesn’t buy even from a long-standing or well-established business. Customers don’t buy from businesses that they don’t know, like, and trust, and the best way to build trust is to reverse the risk.

You’ve probably had your own experience with warranties and know that the product will invariably stop working the day, week, or month after the warranty expires. Prospects will hesitate to buy because of that “what if” factor. What if it doesn’t work? What if it doesn’t deliver as promised?

What if I’m not satisfied? It’s up to you to eliminate that concern. And you can do that by reversing the risk. That is, you, as the business owner, assume all risk associated with the purchase of your product or service.

It’s not good enough to offer a 30-, 60-, or 90-day warranty. Your prospect will still be worried about what happens if something goes wrong on the 91st day or even 120th day. If they’re wondering about that, they’re going to hesitate to buy, especially from someone running a relatively new or just-launched business. Make your guarantee ironclad and super strong, and you will show that you are completely confident in what you are offering.

When you are completely confident in your product or service, you have nothing to lose by offering a rock solid guarantee. Quite the opposite. You have everything to gain: more sales and higher profits.

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