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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.
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Risk Reversal Defined
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Risk Reversal, in essence, means that you, the business owner,
assumes all the risks associated with the business transactions,
and your customers none.
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Why Reverse The Risk?
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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.
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Then Why Are Many Business Owners
Unwilling To Offer Such A Guarantee?
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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.
