How about a clue in the form of a short personal example.
Recently I was searching for a gift for my wife’s birthday. I had an idea based on a comment she had made that she would really like a pair of those wireless ear buds that Apple makes. I didn’t want to shell out over $150 bucks on a pair of ear buds, so I decided to search around and see if I could find a good alternative. What was my first stop?
Amazon.
Why Amazon instead of another online retailer even a brick-and-mortar retailer 5 minutes away?
Was it the convenience of an online experience? Not really.
While I really like the ability to buy from the comfort and convenience of my own home that was not the primary reason.
Was it the credibility that comes from the product ratings?
Partially, yes. I could forgive you if you choose this as the reason I did business with Amazon. It is definitely a contributing factor to both their early and continuing success in part because it too is a tool that favorably leverages human psychology to Amazon’s advantage.
But ultimately the “tribal knowledge” I can access with the rating system was not the primary reason I went with Amazon over all of my other possible options.
The biggest determining factor that swayed me to Amazon over any other retailer is that they have the “A to Z guarantee.”
The guarantee states that “We want you to buy with confidence anytime you make a purchase on the Amazon.com website or use Amazon Pay; that’s why we guarantee purchases from third-party sellers when payment is made via the Amazon.com website or when you use Amazon Pay for qualified purchases on third-party websites. The condition of the item you buy and its timely delivery are guaranteed under the Amazon A-to-z Guarantee.”
Amazon makes me the guarantee that if I am unsatisfied for basically any reason I can ship the product right back to them and get my money back. No muss, no fuss.
Amazon guarantees my satisfaction and assumes the risk of the transaction.
In other words they reverse the risk.
I can read your mind. You’re saying, “Really? It’s as easy as that? All I have to do is to guarantee my product and the money will just start rolling in as my prospects convert in droves?”
Yes and no.
Yes, in the sense that I guarantee if you offer your prospect a performance guarantee it will absolutely help your conversions. (If you don’t believe me start an A/B split test today and tell me I’m wrong.)
No, in the sense that you have to be deliberate and offer to reverse the risk in a specific manner to realize its full potential.
How do you specifically construct and then present the offer to realize the full power of risk reversal? Especially if you have a high value service that you don’t think lends itself to the indignity of a performance guarantee?
Stay tuned for next week’s issue where I’ll dive into the details of how to specifically construct and present an offer that your prospect can’t refuse.
Tip for application: Think through how you can assume the risk of the transaction from the buyer. How can you structure the deal so that you lower or even eliminate the psychological barrier that exists between the buyer and the sells.
Now try a split test this week and see if you can see any difference in the two offers. Send me a note and let me know how it goes and we’ll talk more in detail in next week’s email.
To Your Success,
Steve