The Power of Risk Reversal

Posted by eLaunchers on Mar 27, 2018 4:00:00 PM



What is the biggest objection you need to overcome when closing a sale? Is it cost? Belief in what you have to say? Confidence in your product or service? While it is a different answer for every business, every business has to deal with some element of customer fear or hesitation before a monetary transaction.

The reality is that even if you overcome these objections and close the sale, your customer walks away carrying 99% of the risk associated with the purchase. If the product doesn’t work, breaks down, or doesn’t perform to expectations, your customer has parted with their dollars in exchange for disappointment.

In marketing, your objective is to generate as many leads as possible, then to convert each lead into a customer, or sale. The ratio of leads to closed sales is called your conversion rate. What if you could eliminate the risk involved in a transaction? Would you turn more leads into customers? The answer is absolutely.

 Introducing a risk reversal element into your marketing message or unique offer is a powerful way to give yourself an edge on the competition and close more sales. But how exactly are you going to do this? It’s easy – just give them a guarantee.


What is Risk Reversal?

Risk reversal simply refers to reversing the risk associated with a transaction – transferring it from the customer to the vendor.


Everyone can think of a handful of times they have purchased a product or service that did not deliver on their expectations. A time where a salesperson made them a promise and did not deliver. A time where they lost money on a faulty product or bogus service.


Fear of being burned or taken advantage of prevents many people from spending their money. Customers can also be very wary of buying a product or service for the first time.


Providing a strong guarantee eliminates the majority of risk involved in the purchase, and breaks down natural barriers in the sales process. Guarantees will often shorten the sales process all together – skipping any discussion of objections – because the customer does not see any risk in “trying the product out.”


There is also a growing consumer expectation when it comes to guarantees. Many stores will take back anything the customer has not been happy with, and return money or store credit. Popular health food stores encourage customers to try new or unfamiliar products by promising a hassle-free, no questions asked return process. A guarantee or easy return policy can be the difference between choosing one business over its competition.


Your customers buy results, not products or services. The strongest guarantee you can make is on results, not products or services.


If you guarantee that your customer will receive the benefits or results they are looking for, the specific product or service they’ll need to achieve those results becomes irrelevant.

People buy benefits and results. For example, they don’t buy water purifiers; they buy the benefit enjoying clean, fresh-tasting water. They don’t buy lawn sprinkler systems; they buy a healthy green lawn.


Once you understand what specific benefit or solution your customers are seeking, find a way to guarantee they’ll receive or experience that solution. If they don’t, you’ll compensate them for it.


Remember what you have guaranteed

While guarantees will increase sales for most businesses, they can also be the fast track to business failure if their product or service isn’t a quality one. Take the time to ensure you have a strong offering before you implement a guarantee.


Guarantees are most effective when you are selling someone something they need or want – not when you are trying to convince someone to purchase something they have no use for.


If you are interested in learning more about how you can guarantee your prospects a risk-free buy, click below to sign up for a free consultation. 

Request Your FREE Consultation

Topics: Blog, direct marketing, how to, risk, guarantee

 parthiv shah


Are you one of the 99% of small businesses who are spending money on marketing but unhappy with results & ROI?

I can help you establish controls and measurements so you can know, understand and MEASURE what is working and what is not working in real time. In one hour I will help you identify your KPI (Key Performance Indicators) and connect all your digital marketing assets (website, social media, finance) to a digital dashboard and a mobile app so you can track and measure everything going forward in real time.




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