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 Risk Reversal

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sangbmt




Posts : 361
Join date : 2011-02-04

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PostSubject: Risk Reversal   Risk Reversal EmptyJuly 30th 2011, 1:17 am

All smart marketers practice offer risk reversal, because they know it helps bond the customer to them. At its most basic, risk reversal is a promise that you'll be there for them after the sale, and that if something goes wrong, they can return your product and get their money back. Risk reversal is a simple, powerful strategy—so use it. If nothing else, it distinguishes you from fly-by-night marketers who are more interested in making a quick buck than in developing a good, long-term relationship with their customers. The more you reverse the risk, the easier it will be for people to take advantage of your offer, especially if they know you're good for it if something goes wrong.
Risk reversal tactics go by a variety of names, but most of us are familiar with guarantees and refunds. A guarantee is simply a promise that you'll give a customer their money back if they return the product; a refund is the return of that money. Guarantees are a good way to overcome buyer objections and get them to just buy already; and they almost always work, unless you're selling crap—in which case you should find something else to sell. You'll need to word your guarantee in a compelling fashion, of course, and it should be strong, not weaselly and full of loopholes. The words "prompt and courteous refund" should be in there, and the guarantee should last for a long time. A guarantee of a week is useless.
At least part of your guarantee should be unconditional; that is, make it so people can return the item for a refund for any reason whatsoever. At least one unconditional guarantee is necessary with most products. You can also make part of your guarantee conditional: something like, "the item must be returned in good condition." But don't use a conditional guarantee as your primary guarantee; people will crack down on you for that, and are likely to get the government involved.
Multiple is better than single in terms of guarantees. A double-your-money-back guarantee is always good, for example. While this might seem risky, experience shows that it actually results in about 50% more sales and 50% fewer refunds. So this kind of guarantee is an excellent way to boost sales, and it can also yield additional sales for your company, as long as you're willing to prove your guarantee by giving people their double refund whenever they ask for it.
Not giving refunds promptly is the easiest way to get into trouble. Some percentage of your customers will either have buyer's remorse or will fail spectacularly with your product, usually because they didn't follow the directions, and will loudly demand a refund. Give it to them immediately; it'll be the cheapest money you ever spend. In the business opportunity and information marketing fields especially, you should have a refund rate of at least 10%; if you have anything less, you're not selling hard enough. Now, keep in mind that once you've given someone their money back, you don't have to deal with them ever again if you don't want to. You can ban them from doing future business with you, because after all, people who demand refunds tend to be the worst customers.
One caveat about making refunds: you should state clearly, from the very beginning, that you will offer no monetary refunds for intangibles like services. Once someone has taken advantage of the service you've rendered, whatever it may be, there's no way to get it back if you do give them a refund. For example, you can't unmow a lawn, or unteach a marketing strategy. At the most, you should do no more than refund the purchase price with other products and services.

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