Because consumers do not want to make the wrong decision and waste money on a product they really donâ€™t need or wonâ€™t fulfill all their needs for their particular situation they are naturally hesitant to buy, especially when it comes to major purchases.
Consumers take all the risk where there are no guarantees, see either the company selling the product takes the risk or the customer does.
Thus if you can overcome this hesitation the consumer has when they come to a buying decision, by offering to guarantee their purchase reversing the risk, you will see a lot more sales. Thatâ€™s a proven fact.
If a customer came back to you with a problem, a complaint, or a change of mind, you’d probably give him back his money anyway, right? So then why donâ€™t more companies make the guarantee of risk reversal a strong part of their sales proposition. As I mentioned before, “risk reversal” is whenever a sales proposition is extended to a prospective customer, someone has to take the risk; either the seller or the buyer.
Considerably too many companies make the buyer bear the risk. That’s a huge mistake!
By taking all the risk off the purchaser and assume it yourself, your sales proposition is so much more potent, alluring, and embraceable that significantly more customers will break their habit of hesitation and benefit from your offer because there’ is no risk on their part to do so.
Before the scared â€œwhat about all those returnsâ€ thought comes into your head, just humor me on this incontrovertible truth.
Whenever a company practices risk reversal assuming the risk for the customer, double or triple sales increases are often the result. Yes, there are those unique few who will take advantage of your guarantee. But, as a rule, the double and triple sales from strategy of reversing the risk, the refund amounts are in effect inconsequential. Even with refund requests, it’s a piece of cake to turn those desires and complaints into compound earnings.
Here is an example of a company that applied this strategy to the worst product ever conceived by man kind.
This company had a “quick-fix” product which was of incredibly poor quality. In fact, they were getting almost more returns and refund requests than they were making in sales. They were in incredible cash flow trouble.
After drafting a very nice letter that apologized so unconditionally for the pitiful quality of the product that customers couldn’t help but be impressed at their honesty. But what made this letter really successful was that they offered to make up to the customer for the negative feelings they felt toward the company by giving the customers absurd savings on similar products from sources they had negotiated hard to believe wholesale prices from.
They invited the customer to simply call and tell them what product they had selected, shipped it out immediately and adjusted their account accordingly refunding the difference or billing their credit card the lean further amount.
The customers loved them. They were able to throw away the terrible purchase they had made getting the top-quality products they really wanted. Everybody won something out of the deal.
Naturally, the customers that were adamant on getting a complete refund were happily sent their money. So many people took advantage of the discount pricing on the other products, the company ended up making more from the refund requests than they did off the original product!
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