If you are in the business of selling--whether its goods or services--nothing can more potently affect your sales than mastering the art and science of Risk Reversal.
Risk Reversal is making it hard for the potential or current client to say “no” by taking as many reasons/restrictions off the table as possible. Whatever you sell, to whomever you sell, there is always some perceived risk, uncertainty, or apprehension.
The key to closing the deal (and building a lasting relationship) is to find a way of removing those concerns from their plate and putting them squarely on yours. At the very least, you can strive to mitigate those risks or guarantee a minimum resulting level of outcome/satisfaction. This process and practice of reversing risk puts you way ahead of competitors who fail to do so; it gives you advantage. To illustrate this practice, I like to tell the story of the father looking to buy a pony for his daughter.
When a man took his daughter to look at ponies with the intent of purchasing one for her, they approached the seller of a beautiful palomino pony. The first seller said, “$500. Take it or leave it.”
The father moved along to the second seller, who was selling his pony for $750, a price substantially higher than Seller No. 1. 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. Beyond that, he offered to bring the pony out to the farmer’s home along with a month’s worth of hay to feed the pony.
He further said he’d send out his own stableman once a week to show the little girl how to groom and care for the pony. 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, right then, to be paid the $750.
Which pony do you suppose the farmer decided to purchase for his daughter?
This illuminates the enormous power of risk reversal. It worked for the sale of a pony and can and will work for most any transaction. Risk reversal takes work. To remove risk from your prospect’s plate, you have to understand the perceived risks holding them back. This requires some serious due diligence and old-fashioned, hard-nosed questioning. Are they considering going to a competitor? Is price an issue? Are your products/services necessary for them to advance their goals?
I have performed this kind of risk reversal analysis with thousands of clients. (Yes, I’ve been doing this for a while). I give my clients “homework” designed to get them to ask these critical questions, making them do the real work necessary to win their business while laying the foundations for a long-term, mutually beneficial relationship. Two of the simplest and most effective forms of risk reversals I’ve found are solid guarantees and actual offers of compensation. By taking the price or performance risk off of their plate, you give them a far stronger reason to do business with you.
Mitigating your prospects’ risks as a practice serves two important goals: closing more deals while simultaneously providing the satisfaction of having been a trusted supplier or advisor and having served your client well.
If this advice has captured your attention, and you are serious about taking the steps necessary to multiply your revenue and broaden your customer base, please reach out to Rob Colasanti at RobColasanti@abraham.com, or call directly (727) 480-8853 to get the ball rolling.