Risk Reversal

Risk reversal is a powerful sales and marketing technique that involves removing all or most of the risk for the customer. By doing so, you can overcome objections, build trust, and dramatically increase your conversion rates.

The Principle

In any transaction, the customer perceives a certain level of risk. They are afraid of making a bad decision, wasting their money, or being disappointed with the outcome. Risk reversal shifts the risk from the customer to the seller.

Common Forms of Risk Reversal

• Money-Back Guarantee: The most common form of risk reversal.
• "Keep the Bonus" Guarantee: A more powerful version of the money-back guarantee, where the customer gets to keep a valuable bonus even if they return the product.
• Free Trial: Allows the customer to try the product or service before they buy.
• Pay-for-Performance: The customer only pays if they get the desired results.

The Benefits of Risk Reversal

• Overcomes Objections: It directly addresses the customer's fear of making a mistake.
• Builds Trust: It shows that you are confident in the value of your product or service.
• Increases Sales: By removing the risk, you make it much easier for the customer to say "yes."

While there is a risk that some people will take advantage of a strong guarantee, the increase in sales will almost always outweigh the cost of the returns. This is a powerful tool for the "Close the Sale" step in The Seven Steps to Every Sale.