On today’s episode of Strategic Edge, Jay Abraham, executive coach and founder and CEO of the Abraham Group, says most businesses treat guarantees as an afterthought. He argues they should be a core part of the offer.
Abraham calls this risk reversal. It goes far beyond a standard money-back policy. Done correctly,it can dramatically change how often customers say yes.
Reversing the risk
Every transaction involves risk. One side almost always carries more of it than the other, whether the exchange is commercial, personal, or somewhere in between.
That risk sits with the buyer before they ever raise an objection, he says. A strong guarantee removes it before it becomes a barrier.
“The research says you can double or increase by more than double, but usually at least 50% more success just by having a strong risk reversal that is integrated up front,” he said.
Abraham says businesses don’t need to wait for hesitation to surface. They can address it directly in the offer itself.
"You don't have to wait for somebody's subconscious to try to start to figure out the risk and worry about it. You preempt it by introducing it."
Be specific with your guarantees
Not all guarantees carry the same weight. A typical 30-day refund doesn’t tell the customer much, but a guarantee that spells out specific outcomes does more of the selling itself, Abraham says.
He compares a basic refund offer to one that lists exactly what the customer should expect to gain, from better focus to improved sleep to higher productivity.
“If you can’t honestly say that the majority of those outcomes aren’t starting to happen, I don’t deserve to keep your money and I won’t. You have every right to ask for it back because I failed you,” he said.
Abraham calls this approach “making the intangible tangible.” Spelling out the benefits up front does more than describe the product. It becomes part of the guarantee itself.
“It’s all in the delivery. You contextualize it, and sometimes it is how you use semantics to re-articulate it,” he said.
Risk reversal applies beyond products
Risk reversal isn’t limited to products. Abraham points to his son’s job search strategy as an example. Before applying, his son offered to prove his value first.
“It sounds like a perfect job and I think I’m super qualified. However, I don’t want to make a mistake for you, not me. So I am willing on my own time to spend a week either writing with your current salesperson or interacting with whoever’s, to make sure that I believe in my heart of hearts that I will add more value than an alternative candidate,” he said.
Whoever removes more risk from the transaction wins the business, Abraham says.
"If it's easier to say yes than no, who wins? You do."
Why businesses hesitate
Many businesses avoid stronger guarantees out of fear customers will take advantage of them, Abraham says. But he says the math usually favors the seller, especially when front-end sales increase along with redemptions.
“You can number one qualify it, and number two you can test it. Normally you will affirmatively get more redemption of the guarantee, but it’s moot if you double or triple or quadruple the number of people that say yes,” he said.
Abraham shared another example from a large automotive group that offered a seven-day return policy on vehicle purchases. Few customers ever used it, and most who did simply chose a different vehicle from the same dealer.
“Less than 2% of the people that purchased vehicles ever brought them back, and 90% of the people that brought those vehicles, they picked out another one,” he said. “What it did for the loyalty of that customer to that group was incredible.”
A guarantee shouldn’t be an afterthought. Done right, it becomes part of the pitch itself, convincing the customer before they buy. For businesses willing to spell out exactly what a customer stands to gain, and stand behind it, that specificity can mean fewer objections and more sales.
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