Last week we discussed Rule number 3 of our Fourteen Rules of Attraction, The problem is more important than the solution. This week we will examine Rule number 5, Reverse people’s risk in changing.
Often times the reason prospects are hesitant to change suppliers or service powders is because of the inherent risk in changing. Their concern is that if they make a change in favor of your solution, their situation not only may not improve, but also may even become worse. The goal is to reverse their risk so that they feel comfortable making a change. Most importantly we must create a way for them to feel that any “risk” involved in changing is eliminated. There are a few ways that we can do this:
Guarantees
The more compelling the guarantee, the less risk your customer will perceive. It is important to understand that while you may be offering a strong guarantee, it doesn’t mean that all of your customers will take you up on it. In fact, studies have shown that less that 2%, of all clients cash in on the very guarantee that motivated their buying decision. You probably already have a strong guarantee that you’re not promoting.
Sample Guarantee
Let me tell you about a client that we’ve worked with that has developed an astounding service guarantee. The company is Pelican Products. Their claim: “You break it. We replace it. Forever.” This is not marketing hype. The company manufactures cases and flashlights that are virtually indestructible. The product is sold to the military, law enforcement, fire, and emergency agencies. This guarantee is unmatched in their industry and their competitors are stymied by their inability to match this offer. Even more amazing, Pelican tells me their return rate is less than 1%! How do they do this? By innovating the guarantee right into the product. How big is the market for industrial cases and flashlights? The company will do almost $100,000,000 this year. It helps to have a powerful guarantee.
Results Oriented Guarantee
Providing a guarantee of specific results is the most powerful type of guarantee. This might include a guarantee of timely performance, error free operation, asset depreciation, or financial value. The more specific the benefits or results, the less risk will be perceived. This requires citing some evidence so that prospects can understand precisely how the guarantee ensures the results. Here are a few examples:
A very common guarantee is: “Either you’re completely satisfied or we’ll give you your money back”. The reason this type of guarantee is so popular is that very few people take advantage of it. It’s more inconvenient and time consuming for people to request their money back than it is for them to suck it up and move on. Often times people will be hesitant to admit to themselves that they are dissatisfied with the purchase. Their egos get in the way. If they request their money back, they are admitting to themselves and others that they made a mistake in making the purchase. This kind of guarantee is often constructed using very powerful language such as:
“I’m so convinced that you’ll be absolutely delighted with your purchase, that I’m prepared to give you an ironclad 120 day, totally outrageous take it or leave it guarantee.”
This type of compelling language and commitment often is enough to reverse the inherent risk for the buyer.
Non- Results Oriented Guarantee
Examples of these type of guarantees are “hassle free”, “personal guarantee”, “guaranteed customer satisfaction” and “conditional guarantees” (if you do this, we’ll do that). These type of guarantees are not as strong as “results-based” guarantees, as we discussed above. “Results-based” guarantees therefore do a much better job of reversing risk. I strongly suggest that you make your guarantee based on specific results.
Giveaways
Giveaways are very effective ways to reduce risk and to overcome procrastination. By giving away part of our solution, we build credibility with the buyer and allow them to try out our solution. This leverages two powerful forces in the marketing process. The first is utilizing the word FREE. While it may be overused, the word “free” still carries a powerful effect over those that hear it. The second is when we give something to someone, they automatically feel obligated to give something back. This is human nature.
Examples of Giveaways
I have seen countless examples of this in action:
- The auto repair center that gives away free oil changes- these are valued at $69 each, but by giving these away they get an armful of new customers that purchase several thousand dollars in services each year.
- Consultants or professionals that offer a free introductory assessment.
- Software companies that offer free trial ware or “shareware”.
Combination Strategies
While guarantees help to reverse risk and giveaways overcome procrastination, imagine how powerful both techniques can be when combined.
Here is a great example of a guarantee and a giveaway in the same offer for a search engine marketing company:
“Join our search engine optimization newsletter and you’re automatically entered in a drawing for a Gold Search Engine Optimization Package valued at over $2,999. We’re giving away one Gold search engine marketing package every month! We guarantee first page ranking on several major search engines. Click here to request a first page ranking proposal.”
Regardless of the type of guarantee you often, every product or service should incorporate a risk reversal strategy into their marketing campaign. We spend considerably more time on this in our Attract More Business program, Tele-clinics and in our one-on-one Tele-coaching. Think about how you can reverse the customers risk in changing. Reversing Risk TeleClinicTo help you put the concepts discussed in this article into action, we will be holding a Reversing Risk TeleClinic on Monday, November 22nd at 1 PM. To register, go to:https://www.sbanetwork.org/learning/signup.asp
Special news for our Southern California Readers!
Can’t get enough advice on reversing risk? Be sure to stop by the FM Talk Financial Fest on November 13th. I will be speaking on the subject of reversing risk in business. Go to the KLSX website for more details. You can also see Tom Leykis speak on amassing personal wealth, Doug Fabian speaking about investing through mutual funds, and Gabriel Wisdom sharing his thoughts on the stock market. If you stop by, please say hi to Matt and Myself. Also be sure to listen for the Small Business Tip of the Day on 97.1 FM KLSX, on Mondays, Wednesdays, and Fridays during the 8 O’clock hour of the Conway and Steckler show. If you’re out of the listening area, we will soon be posting these segments on our website for everyone to enjoy. Have a great week! I hope that this “Business Update” has been helpful in assisting you to improve the performance of your organization. For more information on how the Small Business Advisory Network assists companies in improving their performance, please feel free to contact us at 310-320-8190 or email mark@markdeo.com
Mark Deo