How To Craft A Brilliant Guarantee With Risk Reversal

//How To Craft A Brilliant Guarantee With Risk Reversal

How To Craft A Brilliant Guarantee With Risk Reversal

How To Craft A Brilliant Guarantee With “Risk Reversal

Risk Reversal is like a Guarantee, but is far more powerful for your business than you can imagine. Choose a style of guarantee to boost your sales.

What Is Risk Reversal?

The concept of risk reversal is simple,but it requires YOU the business owner looking to close a sale, to identify the various reasons a potential customer would hesitate to buy. Then you must think of the little things that you can do to overcome those obstacles and objections.

Risk Reversal is like a Guarantee, but far more powerful.

It’s like a guarantee on steroids. It’s the kind of guarantee a potential buyer cannot turn away from because the buyer has nothing to lose and everything to gain.

Let’s first look at the Basic Guarantee that 90% of online and offline merchants usually have.


Level 1 – The Standard Guarantee

A standard guarantee provides buyers a 30 day period to return the product for a full refund. This type of guarantee is required by law in many countries such as the USA and Canada.

This type of guarantee is mediocre and your competition probably offers it too. It’s mind-numbing and not even noticeable to your customers. Successful businesses always go beyond a Level 1 guarantee.


Level 2 – The Extended Time Period Guarantee

At Level 2 the guarantee extends the 30 day period to 90 or more days. Many sellers swear by the 90 day guarantee. By providing your customers with a full 90 days to try your product you often lower the refund rate.

Here’s why:

Let’s assume that Crystal buys a set of DVD’s to lose weight from your online store and it comes with a 30 day guarantee. It takes 10 days to reach her home. Crystal now HAS to test the DVDs in the next 20 days to see if she likes them. But as life would have it, she finds herself too busy, and all of a sudden she has only 2 days left to return the product for a full refund. It has been sitting on her TV stand untouched- feeling the pressure, and she returns it to you unopened.

If Crystal had been given more time to test out the product, there’s a higher chance she would not have felt pressured and she may have taken the time to test, play with, and fall in love with the product.

When selling products online, you can often create significant increases in sales AND lower your refund rate simply by extending your guarantee to 90 days.


Now we step into the Zone of Risk Reversal

A few years ago, a guy by the name of Nick Swinmurn got frustrated because he could never find the right kinds of shoes he liked in the local mall. Nick went home that day and went online hoping to browse through online shoe stores, but there were only a few of them set up back in 1999.

Nick started contemplating the idea of establishing his own online shoe store. The idea of it wouldn’t leave him alone and he eventually quit is day job and founded Zappos.

In the beginning people told him he was crazy. Everyone believed that shoes were one of those items you need to hold in your hands before buying. You need to try them on. Feel the leather. There were many reasons to NOT buy shoes online.

Yet Zappos thrived. In 2005, the 6 year old company did $370 million in online shoe sales.


Here’s what gets people hooked on Zappos.


It’s Zappos’ Risk Reversal policy that turns people into loyal customers.

* What if I don’t like that shade of brown? Can I return it? Zappos’ answer was yes.

* If I try it on and find it won’t fit – can I return it and get another pair? Their answer: yes.

* Will you pay for the shipping – and the cost of return shipping? Their answer was again: yes!

* If I buy it and then randomly change my mind – can you still send it back and get your money? Again, the answer was yes.

* If I bought it and then found one for a cheaper price on Canal Street, can I send it back? Again – yes.


They have an answer for every SINGLE doubt you have. They are prepared to lose a few bucks on return shipping because they are smart enough to understand that once you bought the shoes – you would probably really like them and want to keep them.

They know their prices are good and they know that once they have you hooked, you will be telling your friends about them.

They are willing to bend over backwards to give you the best service possible and eliminate every single doubt from your mind prior to the purchase. How many physical shoes stores do you know of that would place that much trust in a customer?

Zappos effectively reverses every single doubt a customer might have running through their mind. They make a no-brainer to be their customer.

This my friend- is Risk Reversal.

By |2017-10-05T00:50:05+00:00|Customer Experience|0 Comments

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