Risk Reversal: The Most Powerful Abraham Technique for Kick-Starting Your Online Sales

Here’s the single most important lesson I learned from attending Jay Abraham’s $5000 per seat Marketing Seminar.

If you’re into marketing you probably know that Jay Abraham is considered to be the World’s #1 Marketing Guru. He’s also the single most successful business consultant in the world today.

I recently spent $5000 to attend one of his seminars. On the left is a picture of me with Jay – I’m the badly dressed one.

$5000 is a lot of money and few business people I know would spend that much on a single seminar. So why did I do it?

Well I figured that if any of Jay’s ideas could boost my sales by a mere 2% – I’d have made my money back. Couldn’t hurt right?

Well let me tell you this – I was wrong.

Just ONE of Jay’s ideas boosted my sales by 50%.

Overnight too. It was bloody amazing.

Now because I adore my list subscribers – I’m going to do this for you.

I’m going to share that ONE Tactic with you. Remember I paid $5000 for this seminar. I’m now revealing the #1 thing I learned.

You’d be foolish to not stop everything else you’re doing now and pay close attention.

Ready? Here’s that tactic.

It’s called Risk Reversal.

The concept of Risk Reversal is simple, but it requires some boldness and guts. Basically, it means that YOU, the businessperson looking to close a sale, should identify the various reasons a potential customer would hesitate to buy. You then think of little things you can do to overcome those reasons.

The Risk Reversal is like a Guarantee, but way more powerful.

It’s a guarantee on steroids. The Arnold Schwarzenegger of all guarantees. The kind a buyer cannot turn away from because the buyer has nothing to lose and everything to gain.

Before we go there…let’s look at the Basic Guarantee that 90% of online and offline merchants usually have. Let’s label this Level 1 on the Scale of Guarantees.

Level 1 – The Standard Guarantee

A standard guarantee offers 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.

It’s mediocre and your competition probably offers it too. Truly successful businesses always go beyond a Level 1 guarantee.

The next stop is Level 2.

Level 2 – The Extended Time Period Guarantee

A Level 2 guarantee will extend this 30 day period to 90 or more days. Many sellers swear by the 90 day guarantee. By giving the customer a full 90 days to try your product you often lower the refund rate.

Here’s why:

Let’s say Mary buys a $90 set of aerobics DVDs from your online store with a 30 day guarantee. It takes 10 days to reach her. Mary now HAS to test the DVDs in the next 20 days to see if she likes them. But she finds herself too busy. All of a sudden she has 2 days left to return the product for a full refund. It’s still sitting on her shelf untouched – feeling the pressure, she returns it unopened.

But if Mary had been given more time to try out the product, there’s a good chance she would not have felt pressured and may have taken more time to test, play and fall in love with the product.

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

But Level 2 is nowhere close to what a guarantee can do.

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 got online hoping to browse through online shoe stores, but there were few of them set up at that time in 1999.

Nick wondered if he could establish his own online show store. The idea kept jumping around in his head and eventually he quit his day job and founded Zappos.com.

At first people told him he was crazy. Shoes are something you need to hold in your hand before buying. You need to try them on. Feel the leather. Have your spouse see them on you and let you know what they think. There were a multitude of reasons to NOT buy shoes online.

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

How?

Well let me tell you what got me hooked on Zappos.

Sure, Zappos had a wider variety than a traditional shoe store. But it was Zappos Risk Reversal policy that really made me a loyal customer. I remember the decision making process I
went through before buying my first pair of Kenneth Coles on Zappos.

• 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 I still send it back and get my dough back. 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 had an answer for every SINGLE doubt I had. They were prepared to lose a few bucks on return shipping because they were smart enough to understand that once I bought the shoes – I would probably really like it and want to keep it.

They knew their prices were good and they knew that once they got me hooked, I’d be telling my friends about them.

They were willing to bend over backwards to to give me the best service possible and eliminate every single doubt from my mind. No physical shoe store I know would place that much trust in me as a customer.

Zappos had effectively reversed every single doubt I could have in my mind. They made it a no-brainer to be their customer.

I did buy a pair of $120 shoes from them. And I bought another one later that year. And I told 8 friends about them. And I’ve NEVER EVER shopped in a physical shoe store in New York again.

That my friend – is risk reversal.

But enough about my shoe buying habits – here’s Zappos’ revenue growth

• 1999: Almost nothing
• 2000: $ 1.6 million
• 2001: $ 8.6 million
• 2002: $ 32 million
• 2003: $ 70 million
• 2004: $184 million
• 2005: $370 million
• 2006: $600 million (projected)

My point is – Guarantee’s are fine – but they’ll only get you so far. Risk Reversal on the other hand will make you millions and make your competition tremble in their boots.

This is where we come to Guarantees that effectively Reverse the Buyer’s Risk and make it a no-brainer to purchase from you.

Once you go beyond Level 1 and 2 – there are 4 more levels of Guarantees that fall in the Risk-Reversal Zone.

Level 3 – The Try and Then Buy Guarantee

This type of guarantee allows the buyer to pay only AFTER 30 days. The buyer pays nothing upfront or pays a small amount like $1 and knows that he will be billed later unless he cancels.

This is how this type of guarantee works. You allow the buyer to make a purchase for a mere $1 – $3.

They get to play around with the product for 30 days. At the end of 30 days, unless they cancel, they authorize you to bill them the balance owed.

Level 4 – Guaranteed Results or a Full Refund

Stronger still is the “Pay only if it Works Guarantee”. You guarantee a certain amount of results, say a 5 times boost in profits and allow the customer to claim a refund if this goal is not met.

This guarantee is not only fair to the customer – it helps close sales because you’re painting a positive picture in the customer’s mind of what your product can do for them.

Level 5 – Customer Always Wins

Next is the “Customer ALWAYS Wins” Guarantee. This is where the customer can return the main product for a full refund but can still keep the accompanying bonus gifts.

Let’s say you sell energy-efficient lighting. As a bonus on sales over $50 you offer the customer a free energy-efficient bulb worth $15. (Of course the bulb would have cost you only $5 wholesale, but the value to the customer is $15.)

You allow the customer to return the lighting within 60 days if it does not please them. And they can still keep the bulb as a thank you for trying out your store. So the customer wins either way. That can be very reassuring.

Now you may worry – couldn’t people take advantage of your generosity?

The answer is yes – they could. But you’ll find that very, very few would actually do so. People – I like to believe, are fundamentally good. When using this type of guarantee I have found that less that 0.5% of buyers attempt to misuse the system.

But so what if you lose $5 a few times due to a few unethical buyers. The increase in sales you get will more than make up for this. You see – this guarantee and risk reversal policy works so well because of the psychological image it sets up in the buyers mind.

Simply put: the buyer can’t possibly lose. Even if they make the purchase and then have to return the light fixtures, they still end up with a free bulb. The customer always wins!

That’s powerful risk reversal at work.

Now Level 5 is where many of the BEST stores stop.

But there is one more level you can use.

Level 6 – The Seller with Balls of Steel Guarantee

This is where you offer the customer a double your money back guarantee.

It requires some boldness and you better have an excellent product. If you do – this guarantee can work miracles.

Here’s an example:

That’s the guarantee Mike and I are using now to sell our book.

Now – Applying it to Your Business

Now let’s see how we can apply this to your business.

Here we try to take the guarantee beyond a mere trial period. We’re going to make it so easy and safe that the potential customer would have every potential doubt addressed, AND
would realize that they could not possibly lose anything by making a purchase.

To get there we first need to sit down, grab a cup of coffee, and think…. really think about what goes through a customer’s head when they’re shopping at our store.

I’m going to share with you what I’ve found about our customers. Perhaps the same applies to your site.

As you know, Mike and I sell a course called Chain Reaction Marketing. It’s one of the most powerful ways we’ve discovered to boost a site’s sales rate.

We sell this for a decent price – and you get 40 lessons, audio trainings, podcast, 50+ free bonus resources and best of all – a 1 hr live site makeover with us. During this makeover
we get on the phone with you and show you how to redo your site to double your sales. It’s something no one else does – and it’s produced sales boosts of up to 450%.

Still, some people hesitate upon buying…So we offer a guarantee to make the decision easy.

Our basic guarantee is 2-fold.

First, We guarantee you’ll make your money back by 500% or more. And we’ll give you 90 days to try it. We can make this claim because unlike a traditional ecommerce course, ours
comes with a 1 hr site personalized consultation done by Mike or I. In this one hour we’re usually able to make our customers idenfity 5 – 10 areas where they can dramatically
increase their customer closing rate. As a result – we’re pretty confident of our promise.

Second – we guarantee that we’re the best in the market – better than any seminar, course or book available. We know this because we buy every other competing product in this space and dissect, analyze and think up ways to create a better product and offer. And no other guys get on the phone with their buyers.

But this isn’t good enough. Because no matter how solid your guarantee, most customers will still have doubts, concerns or worries about their ability to USE your product.

So now we use Risk Reversal. These were the potential doubts we identified in our customer base.

1. Credibility: Is the book really that good? Are those testimonials real? Will it really impact my online store?
2. Ease of Use: Are these tactics easy to implement? Will I be able to apply them with limited skills?
3. Time: My time is precious. Will I have time to work on these tactics? Or will this just sit on a shelf and gather dust? My time is precious.
4. Depth of Knowledge: I’m fairly new to online selling. Will I understand this? I’m fairly new. What if I get stuck? Is buying this product too premature?
5. Opportunity Cost: What if I don’t get the results promised? I’ve just lost my money. Is there a better place I can spend my money.

These are all valid concerns.

Did any of them resonate with you?

If so – make a mental note of which one best applied to you.

Now of those 5 reasons, we realized that only 2 of them were being covered by our guarantee.

Our guarantee covered #1, Getting Results (we guaranteed a minimum 500% ROI) and #5, Opportunity Cost (we guaranteed that if you find a better product, you can return ours for a full refund.)

But what about #2, #3, and #4? Based on these concerns we came up with a risk reversal script that we’ve included at the bottom of our sales page.

In the next example I’m going to personally reveal the Risk Reversal script that we used to create our overnight 50% boost in sales for our book.

Take a look at the script below and you’ll see how we answer the customers concerns regarding Time, Ease of Use and Depth of Knowledge.

Here’s The Risk Reversal Script that
Boosted Response by 50%

That’s it – this is what we did to cause an overnight 50% boost in sales. We’re not looking back and loving every moment.

An Important Question

Now let me ask you this important question – and I want you to take one of two actions as a response. No matter what action you take – you will win big.

Why have you not purchased our book?

I mean seriously? The risk reversal we’re using should cover every hesitation you have.

If you can’t think of any more reasons not to buy – Go ahead and make the purchase. You’ll love it! But if you don’t love it, just email me and claim your refund.

Now if you can think of a new reason not to buy, and feel I have not accurately covered this reason – email me.

If you’re right and I have not addressed your reason for not buying, I’ll reward you by giving you the course for free because you’ll be helping me refine my Risk Reversal presentation.

Make a Decision Now – Either Way You Win

I’m serious. You’re either going to get the book for free or buy it.

Make your decision below:

Vishen, I thought of a reason not to buy. Here’s my reason. You owe me the Chain Reaction Marketing Course completely free

Or

Vishen, thanks, you’ve covered every doubt I had. I’m ready to make the purchase

Sincerely,

Vishen Lakhiani and Mike Reining
Founders, MindValley Labs

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