RISK REVERSAL

Posted by janinedavison on May 17, 2016

Risk Meter

 

 

 

 

 

 

 

The concept of Risk Reversal is simple – but it requires some boldness and guts.

Basically, it means that YOU, the businessperson looking to close a sale, should identify the various reasons a potential customer would hesitate to buy.

You then think of little things you can do to overcome those reasons. The Risk Reversal is like a Guarantee – but way more powerful.

The Standard Guarantee – A standard guarantee offers buyers a 30 day period to return the product for a full refund. This type of guarantee is required by law in many countries such as the USA.

The Extended Time Period Guarantee – A Level 2 guarantee will extend this 30 days period to 90 or more days. Many sellers swear by the 90 day guarantee. By giving the customer a full 90 days to try your product you often lower the refund rate. How long is your guarantee?

Then we step into the Zone of Risk Reversal.

A few years ago, a guy by the name of Nick got frustrated because he could never find the right kinds of shoes he liked in the local mall. Nick went home that day and got online hoping to browse through online shoe stores – but there were few of them set up at that time in 1999. Nick wondered if he could establish his own online shoe store. The idea kept jumping around in his head and eventually he quit his day job and founded Zappos.com.

At first people told him he was crazy. Shoes are something you need to hold in your hand before buying. You need to try them on. Feel the leather. Have your spouse see them on you and let you know what they think. There were a multitude of reasons to NOT buy shoes online.Yet Zappos thrived. In 2005, the 6 year old company did $370 million in shoe sales! How?

Well let me tell you what gets most people hooked on Zappos. Sure, Zappos had a wider variety than a traditional shoe store. But it was Zappos Risk Reversal policy that really makes most prospects into loyal customers. Here’s the decision making process prospects go through before buying their first pay of Kenneth Coles on Zappos.

  • What if I don’t like that shade of brown? Can I return it? Zappos’ answer was yes.
  • If I try it on and find it won’t fit – can I return it and get another pair? Their answer: yes.
  • Will you pay for the shipping – and the cost of return shipping? Their answer was again: yes!
  • If I buy it and then randomly change my mind – can I still send it back and get my dough back. Again – the answer was yes.
  • If I bought it and then found one for a cheaper price on Canal Street, can I send it back? Again - yes.

They had an answer for every SINGLE doubt their prospects had. They knew their prices were good and they knew that once they got them hooked, they would be willing to tell their friends about them. They were willing to bend over backwards to give their prospects the best service possible and eliminate every single doubt from their mind. No physical shoe store I know would place that much trust in a customer.

Zappos had effectively reversed every single doubt prospects could have in their mind. They made it a no-brainer to be their customer.

What do YOU do to make it a no-brainer for people to buy from you?

That my friend – is risk reversal.

Dedicated to your success :)

Janine Davison – Exposure Coach 0450 882 778

Learn more about RISK REVERSAL and other crucial business teachings at www.businessschoolonline.com.au

Fun superhero

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