Extended return period (60 or 90 days)

[Birdie]

Dear fastlaners,

My partner and I seem to have a disagreement on our return policy.

I have suggested a return period of 90 days, which will give us an edge over our competition.

My partner insists that 60 days is better because of the liability. He says we can get stuck with expensive inventory, while I say it can be liquidated if needed.

In your experience, does an extended return policy increase sales? Will customers return items more if they have more time?

Should our return policy be 60 day or 90 day?

 

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[csalvato]

Dear fastlaners,

My partner and I seem to have a disagreement on our return policy.

I have suggested a return period of 90 days, which will give us an edge over our competition.

My partner insists that 60 days is better because of the liability. He says we can get stuck with expensive inventory, while I say it can be liquidated if needed.

In your experience, does an extended return policy increase sales? Will customers return items more if they have more time?

Should our return policy be 60 day or 90 day?

Test it and see how many returns you get.

In my experience, the number of returns is usually very very.... very.... low.

Usually it increases sales. This is solved with a simple A/B test.

 

[jsk29]

It may vary depending on what product you're selling but in general longer return policies and guarantees are better than shorter ones.

According to Dan Kennedy and Gary Halbert, when you have a longer guarantee people tend to be more at ease about the policy and tend to forget about it. So counter to what you'd expect, longer guarantees lead to less returns overall (unless you're selling a shitty product.. in that case guarantees are the least of your worries)

 

[AgainstAllOdds]

Dear fastlaners,

My partner and I seem to have a disagreement on our return policy.

I have suggested a return period of 90 days, which will give us an edge over our competition.

My partner insists that 60 days is better because of the liability. He says we can get stuck with expensive inventory, while I say it can be liquidated if needed.

In your experience, does an extended return policy increase sales? Will customers return items more if they have more time?

Should our return policy be 60 day or 90 day?

This isn't from experience, so take from it what you will, but I remember reading a case study where the return period was extended. With a longer return period, returns went down. People are lazy and like to procrastinate. If you give them 7 days to return, they'll instantly return the item because they have time pressure. If you give them 90 days, even if they want to return the first week, they'll delay it because "Hey, we have another 89 days". Day 89 shows up, and by then they already forgot that they wanted the return or stopped caring.

 

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[GuestUser113]

Whenever any two parties come together to transact business, one side is always asking the other to assume most or all of the risk. That's a simple fact of business. The problem is, when the person who must assume the risk happens to be your customer, the natural inclination is to hesitate, to be suspicious and uncertain, to not buy.

What makes them hesitate? They're concerned that once they've paid you their hard-earned money, your product will not perform or your service will not meet their expectations. They may also be afraid of looking foolish or being embarrassed if the purchase doesn't turn out right or sound or astute.

*In the end, your prospect's decision whether or not to buy will be motivated by two things: (1) their confidence in your product or service, and (2) the level of risk (consciously or unconsciously, explicitly or implicitly) you are asking them to shoulder in the transaction. "These two factors are often inversely related: Lowering the level of risk for the buyer can increase the level of confidence".*

Your challenge is to figure out the best way you can reduce or eliminate the element of risk or fear on the part of the buyer. Take away the risk, and you lower the barrier to action - you make it easy to say yes. And if your selling proposition carries less risk than your competitor's, customers not only will be more inclined to say yes, they'll be much more likely to buy from you over the other guy.

*Three Ways to Reverse Risk*
So, how exactly do you reverse risk? It's important to realize that risk reversal is a promise to your customer: "If you're not happy, I'll do whatever it takes to make you happy." Most companies that use risk reversal offer a simple money-back guarantee. That's one way to do it, but there are other, even better ways.
Although the number of potential risk-reversing offers is limitless, there are three basic types:

*1. Total monetary risk reversal:* The most common type of total risk reversal is the moneyback guarantee, in which the seller promises to refund the buyer's money should the product or service not live up to expectations. A stronger (and more advantageous) variation is the "free trial" offer, in which the buyer does not spend any money up front. Instead, the buyer pays only after he or she has received, examined, and evaluated the product or service over a period of time (e.g., 30 days).

If you offer a risk-free guarantee in your business or you're thinking of adopting one, let me stress the following advice: Denominate what you're guaranteeing. So many businesses simply say, "Satisfaction guaranteed or your money back," or "You don't pay unless you're satisfied." But what does that mean?
The problem with these generic statements is that you force the customer to figure out what "satisfaction" should look like. It's much more effective to dimensionalize exactly what the customer can expect from the product or service. Speak in terms of specific performance measures.

For example, suppose you're selling vitamins or some kind of nutritional supplement. Don't simply say to your customers, "Your satisfaction is guaranteed - or your money back." Instead, say, "If you buy a 60-day supply of this vitamin, we fully expect you to feel more energy, focus at a higher level, lower or eliminate altogether your sense of anxiety or stress, sleep more soundly, think more clearly, and work more productively - getting more things done in four hours than you used to get done in a day. If that doesn't start occurring before the 60th day of diligently using this regimen, you are fully entitled to a complete refund."
Do you see how much more concrete that is? You have denominated the outcome. You have painted a vivid picture in the mind of the prospective customer of exactly what satisfaction should look like. Specifics such as these will give your guarantee credibility and measurability - and make your business stand out in the process.

*2. Better than total risk reversal:* In this approach, the seller not only guarantees a complete refund if the buyer is dissatisfied, but also offers a bonus incentive that the buyer retains even if he or she seeks a refund. The bonus is usually a product or service that complements the primary focus of the transaction, although it could be something totally different.

For example, a magazine publisher may offer a duffel bag or camera as a bonus gift with a paid subscription. If the subscriber opts to cancel, he or she receives a full refund and also keeps the gift. The customer is given the privilege of keeping the bonus in exchange for their time, consideration, and efforts.

The better than risk-free transaction acknowledges and rewards the customer or client for having enough faith to commit to purchase, incorporate, and use your product or service in their life or their business. By adopting a better than risk-free proposition, you dramatically increase the appeal of the offer, because there's a bonus incentive on top of a risk-free deal.

*3. Emotional risk reversal: *With "emotional" risk reversal, you take steps to increase your potential customer's level of confidence (and reduce their fear) before they purchase. This type of risk reversal is often practiced by businesses and professionals for whom complete monetary risk reversal simply isn't practical.
For example, if you're a Realtor, it may be impossible to offer a 100% money-back guarantee on every house or piece of commercial real estate you sell - but that doesn't mean you can't reverse risk for your clients.
Using an emotional risk-reversal approach, you could urge prospective clients to first contact a dozen or so of your past customers. Your prospects could ask these previous clients about their overall satisfaction with your knowledge, skill, and commitment. By learning this information up front, your potential client gains confidence in you and faces substantially less risk than if he or she knew nothing about you.

 

[Birdie]

Whenever any two parties come together to transact business, one side is always asking the other to assume most or all of the risk. That's a simple fact of business. The problem is, when the person who must assume the risk happens to be your customer, the natural inclination is to hesitate, to be suspicious and uncertain, to not buy.

What makes them hesitate? They're concerned that once they've paid you their hard-earned money, your product will not perform or your service will not meet their expectations. They may also be afraid of looking foolish or being embarrassed if the purchase doesn't turn out right or sound or astute.

*In the end, your prospect's decision whether or not to buy will be motivated by two things: (1) their confidence in your product or service, and (2) the level of risk (consciously or unconsciously, explicitly or implicitly) you are asking them to shoulder in the transaction. "These two factors are often inversely related: Lowering the level of risk for the buyer can increase the level of confidence".*

Your challenge is to figure out the best way you can reduce or eliminate the element of risk or fear on the part of the buyer. Take away the risk, and you lower the barrier to action - you make it easy to say yes. And if your selling proposition carries less risk than your competitor's, customers not only will be more inclined to say yes, they'll be much more likely to buy from you over the other guy.

*Three Ways to Reverse Risk*
So, how exactly do you reverse risk? It's important to realize that risk reversal is a promise to your customer: "If you're not happy, I'll do whatever it takes to make you happy." Most companies that use risk reversal offer a simple money-back guarantee. That's one way to do it, but there are other, even better ways.
Although the number of potential risk-reversing offers is limitless, there are three basic types:

*1. Total monetary risk reversal:* The most common type of total risk reversal is the moneyback guarantee, in which the seller promises to refund the buyer's money should the product or service not live up to expectations. A stronger (and more advantageous) variation is the "free trial" offer, in which the buyer does not spend any money up front. Instead, the buyer pays only after he or she has received, examined, and evaluated the product or service over a period of time (e.g., 30 days).

If you offer a risk-free guarantee in your business or you're thinking of adopting one, let me stress the following advice: Denominate what you're guaranteeing. So many businesses simply say, "Satisfaction guaranteed or your money back," or "You don't pay unless you're satisfied." But what does that mean?
The problem with these generic statements is that you force the customer to figure out what "satisfaction" should look like. It's much more effective to dimensionalize exactly what the customer can expect from the product or service. Speak in terms of specific performance measures.

For example, suppose you're selling vitamins or some kind of nutritional supplement. Don't simply say to your customers, "Your satisfaction is guaranteed - or your money back." Instead, say, "If you buy a 60-day supply of this vitamin, we fully expect you to feel more energy, focus at a higher level, lower or eliminate altogether your sense of anxiety or stress, sleep more soundly, think more clearly, and work more productively - getting more things done in four hours than you used to get done in a day. If that doesn't start occurring before the 60th day of diligently using this regimen, you are fully entitled to a complete refund."
Do you see how much more concrete that is? You have denominated the outcome. You have painted a vivid picture in the mind of the prospective customer of exactly what satisfaction should look like. Specifics such as these will give your guarantee credibility and measurability - and make your business stand out in the process.

*2. Better than total risk reversal:* In this approach, the seller not only guarantees a complete refund if the buyer is dissatisfied, but also offers a bonus incentive that the buyer retains even if he or she seeks a refund. The bonus is usually a product or service that complements the primary focus of the transaction, although it could be something totally different.

For example, a magazine publisher may offer a duffel bag or camera as a bonus gift with a paid subscription. If the subscriber opts to cancel, he or she receives a full refund and also keeps the gift. The customer is given the privilege of keeping the bonus in exchange for their time, consideration, and efforts.

The better than risk-free transaction acknowledges and rewards the customer or client for having enough faith to commit to purchase, incorporate, and use your product or service in their life or their business. By adopting a better than risk-free proposition, you dramatically increase the appeal of the offer, because there's a bonus incentive on top of a risk-free deal.

*3. Emotional risk reversal: *With "emotional" risk reversal, you take steps to increase your potential customer's level of confidence (and reduce their fear) before they purchase. This type of risk reversal is often practiced by businesses and professionals for whom complete monetary risk reversal simply isn't practical.
For example, if you're a Realtor, it may be impossible to offer a 100% money-back guarantee on every house or piece of commercial real estate you sell - but that doesn't mean you can't reverse risk for your clients.
Using an emotional risk-reversal approach, you could urge prospective clients to first contact a dozen or so of your past customers. Your prospects could ask these previous clients about their overall satisfaction with your knowledge, skill, and commitment. By learning this information up front, your potential client gains confidence in you and faces substantially less risk than if he or she knew nothing about you.

Thank you for all your answers. This helps a lot making our decision.

 

[GuestUser113]

This is from Jay Abraham - Getting everything you can out of all you got book. The one I posted earlier is from Jay Abraham as well. This is some more of his stuff on risk reversal.



MAKE ‘EM AN OFFER THEY CAN’T REFUSE

The biggest secret to success in business or career is to always maintain the edge in everything you do. Logical sounding, yes, but infrequently understood. Even less frequently practiced. One of the biggest “competitive- edge” advantages you’ll ever gain is to always make it easier for the client to say “yes” than it is for them to say “no.” You do it by taking away the financial, psychological or emotional risk factors that are always attached (stated or unstated) to virtually any decision-making proposition you ever ask a client to make. When you remove the risk for anyone deciding to do business with you it results in a powerful advantage in your business and financial success.

In this chapter you will learn how to use risk reversal to eliminate the client’s risk in any transaction, thus eliminating the primary obstacle to their buying.

A farmer wanted to buy a pony for his little daughter. There were two for sale in his town. Both ponies were equal in all aspects. The first man told the farmer he wanted $500 for his pony – take it or leave it. The second man was selling his pony for $750.

But the second man told the farmer he wanted the farmer’s daughter to try out the pony for a month before the farmer had to make any purchasing decision. He offered to bring the pony out to the farmer’s home along with a month’s worth of hay to feed the

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pony. He said he’d send out his own stableman once a week to show the little girl how to groom and care for the pony. He told the farmer the pony was kind and gentle, but to have his daughter ride the pony each day to make certain they got along together.

Finally, he said, at the end of 30 days he’d drive over to the farmer’s and either take back the pony and clean up the stall – or ask, then, to be paid the $750.

Which pony do you suppose the farmer decided to purchase for his daughter?

Obviously, it was no contest. And it will be no contest for you against your competition if you incorporate strong risk-reversal into your business operation.

As I mentioned earlier, whenever any two parties come together to transact business of any kind, one side is always asking the other (either consciously or otherwise) to assume more or all of the risk.

When you take away the risk to your prospect or client, you lower the barrier to action thus eliminating the primary obstacle to buying. And that’s what you must do. Assume the risk in every transaction you have with your clients. Let them know that, if they are ever dissatisfied, you will give them their money back, re-do the job at no charge or whatever else it takes to demonstrate your total, passionate commitment to their satisfaction.

From a practical standpoint, you probably offer some form of risk reversal to your clients. But odds are you don’t forcefully use that in your selling efforts. Most people almost sweep it under the rug, or hide it in their closet.

I want you to push it into the heart of your selling message.

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You’re going to be the one company or practice in your industry or the one executive or staff member in your company who offers a strong and powerful risk reversal to the client.

Here’s how you do it.:
You totally and completely guarantee the purchase for our client.
What does “guarantee” mean? It means you totally eliminate the risk for the

client. You do it by making a completely risk-free performance guarantee to compel them to purchase from you instead of your competitor and to purchase now.

Think about what your clients want most (results wise) from purchasing your product or service. Then guarantee them that outcome – or they can have their money back. If it’s not practical to fully guarantee the entire purchase, then guarantee whatever portion of the purchase is practical.

WHAT’S BETTER THAN RISK-FREE?

In many selling situations, competition is so keen that you need a greater benefit for the client than basic risk reversal. The answer is to use a “better-than-risk-free” guarantee (BTRF).

The BTRF guarantee enables you to do something that a basic guarantee or risk- reversal approach does not. When you utilize a better than risk-free guarantee you are acknowledging and rewarding the client for the value of both his/her time and faith expended in favoring you with his/her purchasing decision.

When you tell me that if I am dissatisfied for any reason whatsoever. You will not only give me full and immediate return of my purchase price, but you promise me an additional reward on top – a compensation incentive for having taken the time, effort and

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faith to purchase in the first place – I’m impressed. I’m hard-pressed to say “no” to a proposition like that.

On a practical transactional basis, here’s how a “better-than-risk-free” guarantee works:

I sell my own live training programs on a better-than-risk-free basis.

First I let people preview my methods both in written and audio recorded form, before I even ask them to sign up. I promise they’ll get a tangible and profit-rendering idea they can apply and make money from before they ever sign up. The materials are theirs to keep even if they don’t go forward and attend my seminar. When they sign up I send them nearly $5,000 worth of materials a full six weeks prior to attending. They are encouraged to read, listen and watch everything I send them and apply what they learn prior to attending. If they don’t make a significant pre-attendance profit, they are welcome to cancel and keep nearly a third of the advance materials for their efforts.

I don’t stop there. If they do what I suggest, applying all the advance materials and making a profit up front, I still don’t consider their attendance binding on their part, not until they’ve sat through a full one half of the entire program. If by 2:00 p.m. on day two of my three day program they haven’t absolutely received well over $5,000 in value, they are welcome to leave and receive a full and immediate refund. No questions asked. No hard feelings, either. And I want them to keep the materials for having gone that far.

Compensating your clients for their dissatisfaction is the concept behind a better- than-risk-free guarantee. BTRF guarantees are a seldom used but extremely powerful advantage you can give yourself and your business or practice.

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Because this approach is probably a bit foreign to you, let’s walk through a few ways you might use a better-than-risk-free guarantee.

If you sell products or services, consider offering the client something else in addition (a bonus) when they agree to purchase. Offer them an exceptional money-back guarantee, but allow the client to keep the bonus if he or she asks for a refund.

Another twist on this approach is to offer financial compensation if they ask for a refund. I’ve seen people use “double your money back” guarantees quite successfully.

I’ve seen publications not only offer to give you a refund but buy you a subscription to their competitor’s publication if you were dissatisfied.

You have enormous flexibility when considering the use of a guarantee, because you can offer a straight 30-, 60-, or 90-day version. You can offer one year. Or lifetime.

An even more innovative guarantee approach I’ve seen used is to denominate a very specific result or minimum result or personal performance level the client should expect within a defined time period.

For example:

A health club I worked with tested four different guarantees. 30, 60 and 90 days risk-free. The fourth test added a written agreement guaranteeing the specific result the client wanted (e.g., lose 22 pounds of fat and turn it into rock hard, rippling muscles within 120 days).

The try-it-free-for-60-days outpulled the other three tests by a large margin. And nearly 50% converted to paying members at the end of the period. But the specific-result guarantee worked well, too, far better than the others without the specific result guarantee.

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What’s the point I want you to see?

It’s this: Test the most specific types of guarantees and better-than risk free guarantees you can before arbitrarily deciding on one.

It might help you to appreciate the power of specific risk reversal if I tell you that the automobile industry has spent millions of dollars trying to understand what makes people buy and not buy.

Their biggest discovery is that the primary reason people don’t buy is that they don’t want to look bad in the eyes of their peers, and they don’t want to make a mistake.

By using risk reversal and purchase guarantees, you get clients to see that they now can’t possibly make a mistake. Nor could they ever look bad again, since they can get out of their purchase if it doesn’t perform. You have a powerful new tool – a huge selling advantage over your competitors who don’t offer this level of specific risk reversal.

INCREASE THE GUARANTEE, INCREASE THE PROFIT

I’ve observed that when you put very specific and dramatic performance-based guarantees or risk reversals on your selling proposition, your sales almost certainly soar. But another quite wonderful thing occurs. Because you guarantee your client such a specific outcome or result, you will normally perform even better than you used to in order to assure that your company delivers what you promise.

So the client ends up receiving a far higher-than-expected level of service, quality and performance – and you both win big in the process.

One client of mine, an architect, offers a simple pledge: If his client isn’t happy at any stage of the project, the architect refunds any previously paid fees and re-performs

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the unsatisfactory work for free. He very successfully incorporates this fact into his selling activities and, since starting to do it, his practice has thrived.

It will absolutely make a huge improvement in your business or practice, too. I can’t tell you whether your sales, closures and referrals will shoot up 40% or 440%.

I can promise you this, they will go up.

And because you understand that you are the one company or person that is consciously working to assume all the risk in the transaction, your awareness of the risk factor will be very apparent to your clients. They will be drawn to you and your enterprise because they’ll sense your commitment to make the transaction work for them, not just for you.

An opal dealer I work with has a very daring guarantee: Anyone buying a stone from her takes it anywhere – to a friend, another jeweler, anywhere – and if they’re dissatisfied, unhappy or just plain change their mind, it’s no problem. They can get a full 100% money-back guarantee anytime within one year.

No other opal dealer in the country makes a claim like that. She outsells all her legitimate competition.

Risk reversal helps people decide to act and act now, today, immediately, without fear or concern.

Another client of mine is a broker of investment properties. His risk reversal to his clients is powerful. He guarantees that if any property he sells you isn’t rented within 120 days of your closing escrow, he’ll pay the fair market rent for up to two years, as long as you allow his management company to manage the leasing and rental activities.

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Are you starting to see all the innovative ways you can use risk reversal, money- back or performance-based guarantees to eliminate uncertainty, improve decisiveness and give your business a competitive edge?

If there’s no risk in doing something, a lot more people tend to give it a try. Once they try it out, if your product or service performs as you say, most people will continue buying again and again.

 

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[GuestUser113]

SAY WHAT YOU MEAN – MEAN WHAT YOU SAY

But your guarantee must be sincere, one that you stand behind 100% and one with no loopholes. A bogus or insincere risk reversal policy will do more harm than good. A few horrendous risk reversal examples:

A well-known candy producer’s candy bar carries a “guarantee of satisfaction” on its wrapper. If you’re not completely satisfied, just mail the uneaten portion of the 50- cent candy bar (which will cost you 39 cents postage) along with an explanation of your dissatisfaction to the company. You won’t get your money back. Instead, the company will send you another of the same candy bar. And what if you don’t like that one? They’ll send you another...

An electronics corporation requires a steady hand or a magnifying glass to fill out the warranty for its calculator. The warranty is a postcard only 2 inches wide and 3 5/8 inches long. You’re supposed to send in the warranty right away. But it’s unlikely that the warranty will ever reach its destination – unless it’s put in an envelope – because postal regulations prohibit the mailing of a postcard less than 31⁄2 inches by 5 inches.

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Another electronics company says that if its cheapest quartz watch needs repairing under its one-year warranty, you must pay a $4.95 handling charge (plus postage for shipping to the factory). The watch itself only costs $2.97.

A company that manufactures water heaters for boats, pledges a money-back guarantee. If, within thirty days, you’re not completely satisfied, you can get a refund by returning the product “unused and uninstalled.”

Another company has a simple warranty to fill out on its electric products systems. Just complete and mail the registration form and retain the warranty. So what’s the hitch? The warranty is on the back of the registration form.

THE SPECIFICS

If you use risk reversal, but only in short, abstract, satisfaction-guaranteed terms, change what you say and your terms. If your product or service is good and performs for your client – the longer the guarantee and the more specific the performance expectations you make, the more people will buy. It’s that simple.

Usually a 60-day guarantee will outproduce 30 days by 20%-100%. Test it yourself and see what a boost it gives. A full year or even longer usually beats 60 or 90 days. The more specifically you tell people what “satisfaction” looks like, the more compelled they become to act in order to receive that benefit for themselves.

I like to see strong well-detailed guarantees used by my clients. The clearer, stronger and more specific the guarantee, the more credibility an impact it will have on a prospect or client. How much better and more powerful is it if, instead of saying “satisfaction guaranteed,” you say “unconditionally performance guaranteed for 30 days”?

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But what happens if instead of saying “unconditionally money-back guaranteed for 30 days,” I say, “no questions asked, 100% money-back guarantee anytime within 60 days if my product fails to perform exactly as promised”?

That’s even better.
You could go even one better by saying...
“No questions asked, 100% money-back, 90-day guarantee if you can’t honestly

state your face looks more youthful, radiant, that your skin has better color and elasticity. If you don’t enjoy results that good or better within the first 90 days of using our product, we don’t deserve to keep your money. You have every right to ask for a full, no- questions-asked, on-the-spot 100% refund anytime you decide. And if you decide you want a refund, there’ll be no questions asked and no hard feelings whatsoever on our part.”

Do you see what a difference a strong and specific money-back, risk reversed performance guarantee can make? When you start using risk reversal this way, your business almost always shoots up immediately and stays up. You close more sales, sell larger units of purchase and sell more often when people stop worrying about making the wrong or a bad purchasing decision.

When you use risk reversal, you are basically telling your client that they will never again make a bad or incorrect or dangerous purchasing decision. That’s a powerfully persuading point to make. It moves anyone who’s on the fence off. It gets people who were only mildly interested and turns them into hot prospects. It makes people who were trying to decide between you and one or more of your competitors

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choose you. It eliminates all of your competitors from the running. You virtually have the playing field to yourself.

Just adding risk reversal and a selling guarantee to your sales proposition makes a powerful difference.

There are all kinds of variations on the risk-reversal theme:

An electronics company I’ve worked with guarantees that its products will reduce production costs by at least 15%.

A consultant I’ve advised offers to continue retraining your staff until you can see a measurable, significant increase in productivity.

A TV set distributor offers to buy back any sets not sold in the first 180 days.

A consultant agrees, in writing, not to cash any checks he’s received until his clients tell him they’re satisfied with the work he’s done.

If you’re worried that switching to aggressive risk reversal will cost you lot of business, stop worrying. Unless your product or service is flawed – or just plain does not perform for the client – the number of people taking you up on a refund guarantee is negligible. But the increase in people taking you up on the initial sales offer is anything but negligible. I’ve seen strong risk reversal double and triple sales while only adding 1⁄2%-3% in additional refunds to a company’s numbers. (By using the testing strategy you can quickly, safely and definitively determine the difference risk reversal can and will make. And that’s what you should do first.)

Risk reversal and guarantees should be used in all your marketing efforts. Every salesman or saleswoman who works for you should be using risk reversal to alleviate fears or apprehension and to compel clients to action now. All your ads and mailings

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should use it. Risk reversal can become an important part of your Unique Selling Proposition (USP).

REVERSE THE RISK IN YOUR BUSINESS

Make a list of all the different ways you can 100% guarantee, better-than- guarantee or at least partially guarantee your client’s transaction. Come up with not merely the basic 30-, 60-, 90-day money-back guarantee. Also, take the time to define and explain exactly what the picture of satisfaction should look like for your client. Make a point of detailing the performance or specific results they should expect to occur if they purchase your product or service.

Always remind yourself of the fact that they are not buying a product or service – they are responding to the advantages your product or service will produce for them. So help them clearly focus and appreciate exactly what that result should be.

Then test various guarantees and risk reversals with your clients and prospects. Have your salespeople try them out, too.

If appropriate, try it in one of your ads or sales letters. I guarantee you that if you’ll try a specific and powerful form of risk reversal, you’ll not only sell to more people, your average transaction size will go up dramatically as well.

Risk reversal should instantaneously make a huge improvement in your bottom line.

A hospital emergency room saw its noncritical case load start dropping dramatically because it was taking nearly two hours to get seen. They instituted a 30- minute guaranteed treatment, unless a severe emergency was in progress, and

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aggressively promoted this fact in their community. Non-critical caseloads rose by nearly double, thanks to this guarantee.

A prominent builder-developer guarantees the development costs to his clients. If he goes over budget he pays the costs, not his clients. He’s the only person in his area doing this, and he gets most of the business because of that.

I advise a large power equipment company in the South that has built a multi- million dollar business by telling their clients they have five working days after they take delivery of any large piece of power equipment to bring it back for a 100% refund – no questions asked.

They’ve had three people in the last five years ask for a refund – which is the negative side. But they’ve had 300% increase in business – which is the positive side. And every piece of equipment that was returned was sold almost instantaneously to somebody else, again on a no questions asked, five day, money back basis.

A car dealer I worked with doubled his business by offering – no questions asked – a two week, 100% money back guarantee on any new or used car purchase.

No dealer had ever offered that. He stood out very favorably against every other dealer in his area. If you were going to buy a car, why in the world would you buy it from another dealer when you might make a mistake and regret it a week later? When, if you bought a car from my client and regretted it, you could return it and get a 100% of your money back cheerfully – no questions asked.

His volume shot up. He did have a small number of people who did bring the cars back. But surprisingly, the vast majority didn’t want their money back – they wanted to

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trade up to a larger model or more luxurious one and he actually made more profit on the people who came back and traded up than they did on the initial sales they made to them.

A company that sells a home teaching program to improve the reading skills of children offers this compelling guarantee: “Your child will raise his reading or spelling grade by at least one grade level on his next report card or your money back.” If you’re a parent you realize the power of that risk reversal offer.

Weight loss programs guarantee specific weight loss in a specific period of time. FedEx won’t charge you if your package doesn’t arrive when promised. Blockbuster Video guarantees their new releases will be available or you get it

free the next time.
Auto manufacturers give you bumper to bumper, 3-year, 36,000 mile warranties.

Some companies offer even longer warranties.
Major corporations to small operations offer these guarantees for a reason. They

do it because risk reversal gives them a tremendous competitive advantage. And a strong risk reversal policy will do the same for you.

ACTION STEPS

Look at your business, products, services or employment skills and talents. Make a complete list of every obstacle to your clients or employers that might prevent them from purchasing, dealing with, or choosing you over your competition.

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Break them into the following categories:

Financial reasons: Both the initial cost or expense of choosing you. And the potential financial loss if the transaction doesn’t work out.

Emotional: How bad the client or employer would look or feel if his purchase or commitment to you fails to perform.

Measurability reasons: Can it be measured and evaluated to show the tangible impact you or your offering could or should have on the client’s life, business, or career?

Ask yourself what the real “downside” is in offering the client that product or service or your own employment services on a risk-free basis. Or even a better than risk-free basis.

Look at your product, service, or personal performance history to see how many people have been dissatisfied, asked for a refund, cancelled, or complained. If the number is low or nonexistent, that means a high-risk reversal would do wonders for you. If you have a high incidence of problems or dissatisfaction, it means either you promised too much or your product or services are inferior and need quality attention.

If you provide and deliver true quality and value that can be appreciated, perceived, and understood, don’t be afraid to offer risk-reversal. Try it out with a few prospects or clients. Or ask one salesperson to try it for a day or week or in one market to see how much better clients respond before you incorporate it continually or system wide.

 

[theag]

I offer 365 days but in reality its a lifetime guarantee. As long as I run the company I will refund/replace for free. Might even change it to that.

 

[Birdie]

SAY WHAT YOU MEAN – MEAN WHAT YOU SAY

But your guarantee must be sincere, one that you stand behind 100% and one with no loopholes. A bogus or insincere risk reversal policy will do more harm than good. A few horrendous risk reversal examples:

A well-known candy producer’s candy bar carries a “guarantee of satisfaction” on its wrapper. If you’re not completely satisfied, just mail the uneaten portion of the 50- cent candy bar (which will cost you 39 cents postage) along with an explanation of your dissatisfaction to the company. You won’t get your money back. Instead, the company will send you another of the same candy bar. And what if you don’t like that one? They’ll send you another...

An electronics corporation requires a steady hand or a magnifying glass to fill out the warranty for its calculator. The warranty is a postcard only 2 inches wide and 3 5/8 inches long. You’re supposed to send in the warranty right away. But it’s unlikely that the warranty will ever reach its destination – unless it’s put in an envelope – because postal regulations prohibit the mailing of a postcard less than 31⁄2 inches by 5 inches.

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Another electronics company says that if its cheapest quartz watch needs repairing under its one-year warranty, you must pay a $4.95 handling charge (plus postage for shipping to the factory). The watch itself only costs $2.97.

A company that manufactures water heaters for boats, pledges a money-back guarantee. If, within thirty days, you’re not completely satisfied, you can get a refund by returning the product “unused and uninstalled.”

Another company has a simple warranty to fill out on its electric products systems. Just complete and mail the registration form and retain the warranty. So what’s the hitch? The warranty is on the back of the registration form.

THE SPECIFICS

If you use risk reversal, but only in short, abstract, satisfaction-guaranteed terms, change what you say and your terms. If your product or service is good and performs for your client – the longer the guarantee and the more specific the performance expectations you make, the more people will buy. It’s that simple.

Usually a 60-day guarantee will outproduce 30 days by 20%-100%. Test it yourself and see what a boost it gives. A full year or even longer usually beats 60 or 90 days. The more specifically you tell people what “satisfaction” looks like, the more compelled they become to act in order to receive that benefit for themselves.

I like to see strong well-detailed guarantees used by my clients. The clearer, stronger and more specific the guarantee, the more credibility an impact it will have on a prospect or client. How much better and more powerful is it if, instead of saying “satisfaction guaranteed,” you say “unconditionally performance guaranteed for 30 days”?

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But what happens if instead of saying “unconditionally money-back guaranteed for 30 days,” I say, “no questions asked, 100% money-back guarantee anytime within 60 days if my product fails to perform exactly as promised”?

That’s even better.
You could go even one better by saying...
“No questions asked, 100% money-back, 90-day guarantee if you can’t honestly

state your face looks more youthful, radiant, that your skin has better color and elasticity. If you don’t enjoy results that good or better within the first 90 days of using our product, we don’t deserve to keep your money. You have every right to ask for a full, no- questions-asked, on-the-spot 100% refund anytime you decide. And if you decide you want a refund, there’ll be no questions asked and no hard feelings whatsoever on our part.”

Do you see what a difference a strong and specific money-back, risk reversed performance guarantee can make? When you start using risk reversal this way, your business almost always shoots up immediately and stays up. You close more sales, sell larger units of purchase and sell more often when people stop worrying about making the wrong or a bad purchasing decision.

When you use risk reversal, you are basically telling your client that they will never again make a bad or incorrect or dangerous purchasing decision. That’s a powerfully persuading point to make. It moves anyone who’s on the fence off. It gets people who were only mildly interested and turns them into hot prospects. It makes people who were trying to decide between you and one or more of your competitors

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choose you. It eliminates all of your competitors from the running. You virtually have the playing field to yourself.

Just adding risk reversal and a selling guarantee to your sales proposition makes a powerful difference.

There are all kinds of variations on the risk-reversal theme:

An electronics company I’ve worked with guarantees that its products will reduce production costs by at least 15%.

A consultant I’ve advised offers to continue retraining your staff until you can see a measurable, significant increase in productivity.

A TV set distributor offers to buy back any sets not sold in the first 180 days.

A consultant agrees, in writing, not to cash any checks he’s received until his clients tell him they’re satisfied with the work he’s done.

If you’re worried that switching to aggressive risk reversal will cost you lot of business, stop worrying. Unless your product or service is flawed – or just plain does not perform for the client – the number of people taking you up on a refund guarantee is negligible. But the increase in people taking you up on the initial sales offer is anything but negligible. I’ve seen strong risk reversal double and triple sales while only adding 1⁄2%-3% in additional refunds to a company’s numbers. (By using the testing strategy you can quickly, safely and definitively determine the difference risk reversal can and will make. And that’s what you should do first.)

Risk reversal and guarantees should be used in all your marketing efforts. Every salesman or saleswoman who works for you should be using risk reversal to alleviate fears or apprehension and to compel clients to action now. All your ads and mailings

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should use it. Risk reversal can become an important part of your Unique Selling Proposition (USP).

REVERSE THE RISK IN YOUR BUSINESS

Make a list of all the different ways you can 100% guarantee, better-than- guarantee or at least partially guarantee your client’s transaction. Come up with not merely the basic 30-, 60-, 90-day money-back guarantee. Also, take the time to define and explain exactly what the picture of satisfaction should look like for your client. Make a point of detailing the performance or specific results they should expect to occur if they purchase your product or service.

Always remind yourself of the fact that they are not buying a product or service – they are responding to the advantages your product or service will produce for them. So help them clearly focus and appreciate exactly what that result should be.

Then test various guarantees and risk reversals with your clients and prospects. Have your salespeople try them out, too.

If appropriate, try it in one of your ads or sales letters. I guarantee you that if you’ll try a specific and powerful form of risk reversal, you’ll not only sell to more people, your average transaction size will go up dramatically as well.

Risk reversal should instantaneously make a huge improvement in your bottom line.

A hospital emergency room saw its noncritical case load start dropping dramatically because it was taking nearly two hours to get seen. They instituted a 30- minute guaranteed treatment, unless a severe emergency was in progress, and

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aggressively promoted this fact in their community. Non-critical caseloads rose by nearly double, thanks to this guarantee.

A prominent builder-developer guarantees the development costs to his clients. If he goes over budget he pays the costs, not his clients. He’s the only person in his area doing this, and he gets most of the business because of that.

I advise a large power equipment company in the South that has built a multi- million dollar business by telling their clients they have five working days after they take delivery of any large piece of power equipment to bring it back for a 100% refund – no questions asked.

They’ve had three people in the last five years ask for a refund – which is the negative side. But they’ve had 300% increase in business – which is the positive side. And every piece of equipment that was returned was sold almost instantaneously to somebody else, again on a no questions asked, five day, money back basis.

A car dealer I worked with doubled his business by offering – no questions asked – a two week, 100% money back guarantee on any new or used car purchase.

No dealer had ever offered that. He stood out very favorably against every other dealer in his area. If you were going to buy a car, why in the world would you buy it from another dealer when you might make a mistake and regret it a week later? When, if you bought a car from my client and regretted it, you could return it and get a 100% of your money back cheerfully – no questions asked.

His volume shot up. He did have a small number of people who did bring the cars back. But surprisingly, the vast majority didn’t want their money back – they wanted to

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trade up to a larger model or more luxurious one and he actually made more profit on the people who came back and traded up than they did on the initial sales they made to them.

A company that sells a home teaching program to improve the reading skills of children offers this compelling guarantee: “Your child will raise his reading or spelling grade by at least one grade level on his next report card or your money back.” If you’re a parent you realize the power of that risk reversal offer.

Weight loss programs guarantee specific weight loss in a specific period of time. FedEx won’t charge you if your package doesn’t arrive when promised. Blockbuster Video guarantees their new releases will be available or you get it

free the next time.
Auto manufacturers give you bumper to bumper, 3-year, 36,000 mile warranties.

Some companies offer even longer warranties.
Major corporations to small operations offer these guarantees for a reason. They

do it because risk reversal gives them a tremendous competitive advantage. And a strong risk reversal policy will do the same for you.

ACTION STEPS

Look at your business, products, services or employment skills and talents. Make a complete list of every obstacle to your clients or employers that might prevent them from purchasing, dealing with, or choosing you over your competition.

113

Break them into the following categories:

Financial reasons: Both the initial cost or expense of choosing you. And the potential financial loss if the transaction doesn’t work out.

Emotional: How bad the client or employer would look or feel if his purchase or commitment to you fails to perform.

Measurability reasons: Can it be measured and evaluated to show the tangible impact you or your offering could or should have on the client’s life, business, or career?

Ask yourself what the real “downside” is in offering the client that product or service or your own employment services on a risk-free basis. Or even a better than risk-free basis.

Look at your product, service, or personal performance history to see how many people have been dissatisfied, asked for a refund, cancelled, or complained. If the number is low or nonexistent, that means a high-risk reversal would do wonders for you. If you have a high incidence of problems or dissatisfaction, it means either you promised too much or your product or services are inferior and need quality attention.

If you provide and deliver true quality and value that can be appreciated, perceived, and understood, don’t be afraid to offer risk-reversal. Try it out with a few prospects or clients. Or ask one salesperson to try it for a day or week or in one market to see how much better clients respond before you incorporate it continually or system wide.

Thank you so much for that wealth of information, Raoul Duke!

It has definitely sprung me to brainstorm ideas of specific ways to offer specific definitions of risk reversal within my service-product hybrid offering.

We've made a video presentation with VoiceOver (fivver has been awesome for this purpose).

While explaining our services, we include the risk reversal strategy in the presentation.

Basically, if you don't LOVE the product, we'll give you a full refund (minus the shipping cost)

I can't give more specifics because we have many categories on the items... It's not just one product.

My next question is: Does deducting the shipping cost make the risk reversal strategy sound half-hearted? I see in the examples above that companies who make the customer pay the postage end up sounding scammy in their risk reversal.

I see Amazon absorbs even the return shipping cost, even on international purchases. Is this an effective way to increase sales, even for a small start-up? I ask because Amazon is a giant and their cash flow won't be heavily affected by returns cost and free shipping. I know that they build this costs into the item price.

 

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[Birdie]

I offer 365 days but in reality its a lifetime guarantee. As long as I run the company I will refund/replace for free. Might even change it to that.

That is a great guarantee, Theag.

A great example of this kind of guarantee is Keurig. They offer a lifetime guarantee and even send you a replacement if it ever malfunctions. They are priced higher than most coffee machines yet they keep selling like hot bread because of their ease of use with the k-cup and their guarantee.

I think this applies to a manufacturing one line of product company really well. I would think services need a different type of risk reversal.

 

[Durete]

I offer 365 days but in reality its a lifetime guarantee. As long as I run the company I will refund/replace for free. Might even change it to that.

Makes me wonder though: What kind of products are you using this for?


p.s. I'm going to sell digital content....kinda "Scared" that people will abuse the money back.
Aka buying my book/video's etc. then keeping it on their computer and asking for a refund.

 

[theag]

What kind of products are you using this for?

Physical products. My markup is 1000% so refunds/replacements arent really an issue for me. Also, I sold approx. 10k pieces so far and had 2 refunds. About 10 replacements because something broke. So my product quality certainly favors such a guarantee.

 

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