[VIDEO] How To Craft An Amazing Offer Part 6 – Risk Reversal
If you want to stay in business for a long time and make lots of money, you need to have a strong approach to risk reversal.
People HATE to lose.
People generally don’t like to feel stupid. They don’t like to feel like they’ve made a mistake.
People in general are risk averse.
So when it comes to making an online commitment with your business for example a purchase, there are a few questions that always run through their mind.
Is this the right product or service for me?
Will it perform as promised?
What happens if it’s not the right product or service for me?
These questions are Barriers to Purchase.
If you can’t reduce the impact of these Barriers to Purchase on your prospect’s decision making process you WILL make less sales.
Why is this so important?
Well, in any sale there is a risk imbalance.
You the seller carry less risk than your buyer.
This is because you are able to spread the risk of return or something else going wrong across all of your customers.
So if 1 customer in 100 returns a product, you can spread the cost of that return over the 100 sales.
This means that on the whole you would most likely still be profitable even though you lost money on that single sale.
You customer does NOT have that same ability to spread the risk. They are just making a single sale with you, if it goes wrong they have to eat the total cost of that to them.
So they are experiencing or percieving a greater risk in the transaction.
Your prospects don’t think about it in this way but they are definitely feeling it.
IT’S A BIG DEAL.
So how do you reduce the actual risk or perception of risk for your prospects?
There are two ways.
The first is to provide them with plenty of social proof that your business is legit and your products perform as promised. The main way to do this is via reviews or recommendations from previous customers.
Social Proof is important but it’s not enough by itself.
And what if you’re a new business with no reviews?
This is where Risk Reversal comes into play.
A strong Risk Reversal policy can completely remove these Barriers to Purchase from your customers minds.
Even if you don’t have any social proof. If you make your customers an iron clad promise that you will look after them if things go wrong your conversion rate will jump significantly.
A strong approach to Risk Reversal will also form a crucial part of your USP (see previous video) and your Marketing Message as a whole.
Watch the video at the top of this page for some great Risk Reversal ideas.
If you have any questions or have a great approach to Risk Reversal that you’d like to share please leave a comment on this post.