HWW #49 – How To Use Risk Reversal To Double Your Sales Without Losing Your Shirt

I actually wrote this newsletter way back on Thursday while at the Social Media Pre-Day of Yanik Silver’s Underground 5 in DC. I meant to hop online and post it but . . . uh . . .honestly, I was just too busy meeting awesome people and having a raucously good time.

I twittered like a maniac the whole time I was there, so if you want the scoop just look at my timeline at http://www.twitter.com/chrishaddad . . .or you can search for #UG5 to hear what other folks had to say.

And noooowwww. .  . . for the main event.

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How To Use Risk Reversal To Double Your Sales Without Losing Your Shirt
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Did you watch the Superbowl a few weeks back? It was a good game, but the REAL action happened early on during the commercials.

Hyundai (the tiny, budget-minded Japanese car company) put out a frankly awesome commercial that got my Cheetos addled marketing brain buzzing. It wasn’t a “clever” or creative commercial, but I’m willing to bet that it’ll be more responsible for the relative success of Hyundai over the next year as anything.

What did they say? They said “Buy a Hyundai. If at any time in the next year you lose your source of income, you can return the car for a 100% return of your money.”

Now this is incredibly smart on Hyundai’s part. In today’s terrible economy nobody wants to risk buying a car. They’re afraid that if they fork out 10, 20 or 30k for a new car they’ll wake up tomorrow jobless and broke, unable to make the payments and trying to figure out how to feed their family with a couple of tons of Japanese steel.

So Hyundai reversed that risk, completely eliminated that fear and gave their customers a generous GUARANTEE that they wouldn’t find themselves hungry and holding a lemon.

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Now, Guarantees are Nothing New Of Course
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Marketers big and small have been using guarantees to reverse risk and increase sales since the dawn of time. (I’m pretty sure that 15 minutes after Grog invented the wheel he offered “guaranteed roundness” for 1.5 million years.)

But I’m always amazed how few business owners use them effectively.

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So what Kind of Guarantee Should *You* Use?
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Good question. Personally, I think you’ll figure out your best guarantee yourself, but here’s some fuel to get you started.

1. The Basic Unconditional Money Back Guarantee . . . We’ve all seen this one before. “Simply invest in the Incredible Back Scratcher EXTREME Today. If you aren’t completely satisfied simply return the product within 30 days for a full refund.” This is the “entry level” guarantee and you should have something like it if you want to do well in today’s economy.

2. For Services . . . The Guaranteed Results Guarantee: “I personally guarantee that, after our 5th session together, your Chakras will be completely aligned and you’ll feel an amazing sense of wellness throughout your whole body. If not, simply let me know and I’ll work with you at no additional charge until you’re completely satisfied.” I do a variation on this guarantee as a copywriter. I offer my clients 30 days of rewrites, tweaks and copy improvements (including full rewrites if necessary) for no additional charge.

3. The “More Than Your Money Back” Guarantee . . . This is a favorite of mine, though if your product, seminar or service sucks it can be risky. “I’m so confident that you’ll be satisfied with the POGO MASTER DVD set that I’d like to offer you this amazing Guarantee. Try POGO MASTER for 60 days . . . if it isn’t the most complete and USEFUL POGO training you’ve ever seen, simply let me know. I’ll not only return your money but will actually give you $50 out of my own pocket just for wasting your time.”

4. The Conditional “Prove It” Guarantee . . . This one’s a bit of a “challenge” to your customer. In it you offer to refund them, but only if they PROVE that they’ve actually given your product a chance. It’s great for higher priced info products. “Order Barka Lounger Workout Secrets” today for just $1997. Watch the DVD’s. Fill out the worksheets. Experience what the Barka lounger system can do for you. Any time in the next 90 days, if you give my system an HONEST chance but don’t lose weight while sitting in your Barka Lounger, simply let me know. I’ll review your homework and will personally work with you to get the results you crave. If after we work together you STILL aren’t where you want to be, I’ll refund your money and we’ll part as friends.”

And that’s really just the tip of the guarantee iceberg.

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But Doesn’t A Guarantee Mean That My Customers Will Rip Me Off?
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Yup, and it will drive you to a rage. Fact of the matter is that no matter how good your product is and no matter how honest you are in your marketing there’s always going to be a small percentage of customers who *abuse* your guarantee, get great value out of your product and *still* demand their money back. We have a word for these people. @#$*#weasels.

But you shouldn’t let the @#$*#weasels get you down. Why? Because for every single @#$*#weasel who rips you off, you’ll have a hundred more happy customers who are honest and ethical and who bought *because* of your guarantee.

And here’s the awesome thing, generally speaking . . .

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The Longer Your Guarantee The Fewer People Will Use It And The More Money You’ll Make
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Test after test have shown that longer, more generous guarantees not only increase sales, they actually DECREASE returns.

Why?

Well, if you’ve got a basic 30 day guarantee, your customers can really feel that time pressure. They can watch the clock, dig through your product, desperately try to find fault and then return it to grab their cash back.

But with a longer guarantee, that pressure’s gone. Your customers feel like they can put off worrying about your guarantee until tomorrow and, more often than not, either forget or decide that your product really was worth the money they paid for it.

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So To Sum Up . . .
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To make money and do well in any economy . . .

1. Make A Big Ballsy Promise That Delivers A Benefit Your Customers Desperately Want
2. Reverse Risk Through A Generous Guarantee
3. Over deliver on your promise . . . and smile every time you get a return because you know that for every @#$*#weasels you just got a 100 great customers.

MORE:
Twitter: http://www.twitter.com/chrishaddad
Blog: http://www.haddadink.com/blog
Email: chris@haddadink.com

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