Reverse the Risk and Explode Your ProfitsOctober 23rd, 2011
The following guest blog post is courtesy of Jim Palmer who is internationally known as The Newsletter Guru. Jim is the premier go-to resource for maximizing the profitability of customer relationships.
So without further delay, let’s jump into his informative article, “Reverse the Risk and Explode Profits”:
I have a question for you. Why don’t more of your customers or prospects buy from you? If your answer is “because of price,” you’re probably wrong. I coach a lot of entrepreneurs and small business owners, and when our discussion turns to reasons for not buying, invariably the excuse is price. “My customers don’t say ‘yes’ more often because of price.”
In reality, customers don’t say “yes” more often because of skepticism, or lack of trust or perceived value. It’s what Zig Ziglar emphasizes as one of the five obstacles to a sale: no trust. Lack of trust is probably the biggest obstacle between your company and a sale. It’s rarely price. The reason more of your customers or prospects don’t buy from you is that you haven’t done enough to build your customers’ trust in your products or services.
Why the 30- or 60- or 90-Day Warranty Is Not Enough!
You’ve heard of Murphy’s Law: Anything that can go wrong will go wrong, usually at the worst possible moment. Well, there’s another variation of that, and it goes like this: The product will cease working exactly one day after the warranty expires. Enough of us have had that exact experience that it lends credence to the veracity of the law. We all take those 30- or 60- or 90-day warranties with a grain of salt. It makes us skeptical consumers.
Your customers are no different. They’re wondering, “What if it doesn’t work? What happens when it fails? What if I don’t get the result I was expecting?” They may be on the fence about buying from you. You’ve done a lot to move them to consider buying from you, but they’re thinking, “Yeah, I kind of like it. It sounds like it will solve my problem. I think the price is fair, but what if . . . ?”
Get rid of the “what if,” and you can close the deal. It’s easy to do. Easy? Yup. All you have to do is reverse the risk. Risk reversal means that you, the business owner, assume all the risks associated with purchasing the product (or service), so it’s going to work to your customers’ satisfaction. If they’re on the decision fence and have nothing to lose, they’re going to buy.
Let’s be clear—square one is that you must offer a high-quality product or service. That’s a given. It’s a no-brainer. Some of my coaching clients assure me that they do (and I believe them), and then they go on to tell me about their 30- or 60- or 90-day guarantee. That sort of offer simply makes people skeptical because we’ve all been burned by that warranty version of Murphy’s Law. What happens after 30 days? What happens after 60 or 90 days? When prospects wonder about that, they’re going to be hesitant to buy. You haven’t gotten them over the trust hurdle.
The L.L. Bean Approach:
“Our products are guaranteed to give 100% satisfaction in every way. Return anything purchased from us at any time if it proves otherwise. We do not want you to have anything from L.L. Bean that is not completely satisfactory.”
As the story goes, a woman returned a pair of boots after fifteen years because the sole had worn out. She thought they should have lasted longer. They were replaced, no questions asked. That’s a rocksolid, stand-behind-your-product guarantee.
A super strong guarantee shows that you are supremely confident in your belief that your products and services do what you say they are going to do. It should be paramount in whatever you sell in the first place. So if that’s true, and if you are supremely confident, then give an ironclad guarantee. You have nothing to lose, and everything to gain—sales and higher profits. Your ironclad guarantee is just what your customers need to increase their trust and lose their fear of risk. When they have nothing to fear and nothing to lose, they have no reason not to buy.
Your super strong guarantee needs a few things to really make it work. First, it has to have a specific name, and when possible, the name of your guarantee should be associated with the benefit of your product and the degree to which you back it up. Second, it needs a specific logo. A lot of entrepreneurs use a seal in conjunction with their guarantees, and that image resonates with customers. It’s like the Good Housekeeping “Seal of Approval.” That seal, and the guarantee behind it, have been around for more than one hundred years. The Good Housekeeping Research Institute tests products and only offers the seal on those that pass its strict standards. It’s an ironclad, rock-solid guarantee. Consumers know they can rely on the product if it has the seal. They can trust it!
Jim Palmer is internationally known as The Newsletter Guru, the go-to resource for maximizing the profitability of customer relationships. Jim is also the acclaimed author of The Magic of Newsletter Marketing – The Secret to More Profits and Customers for Life and also Stick Like Glue – How to Create an Everlasting Bond with Your Customers So They Stay Longer, Spend More, and Refer More, and The Fastest Way to Higher Profits – 19 Immediate Profit-Enhancing Strategies You Can Use Today. Learn more about Jim and all his programs at: www.NewsletterGuru.TV.
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