The Brain Audit
Page 10
Most companies do fine with this simple policy of reversing the obvious risk. If you take the Tilley Hat for example, you’ll find this simple guarantee: “Tilleys are replaced free if they ever wear out, shrink or fall apart. They’re so carefully handcrafted in Canada, and made of such strong materials, that many outlive their owners.”
Now replacement or warranties are pretty darned obvious, but is there a hidden risk? Is there some sort of risk that’s almost sub-conscious? Yes, indeed, such a risk exists. It’s the real risk. The risk that’s never voiced. Never thought of.
And yet, when presented to the customer, this risk is the factor that causes the customer’s eyes to light up.
Elephants can sit on it, dogs can chew it, alligators can chomp it. And Tilley
guarantees it!
So let’s look at the Tilley Hat again, and see if they have a hidden risk factor in place. And guess what? They do! Here’s the hidden risk: Hats blow off in gusty conditions. Dogs find them irresistible; blackbirds find they make a good base for a nest.
And so Tilley fixes this problem with a simple statement:
INSURED AGAINST LOSS:
We understand the anguish of losing this reliable companion, or of having your dog terminally gnaw it. Should that happen, Tilley will replace your late, lamented Tilley at half the catalogue price.
With your Hat, you’ll be provided with “The Straight-Shooter’s Statement of Loss of a Tilley Hat” insurance policy. The insurance is for two years, all perils, 50% deductible, and is not issued by Lloyds.
At Psychotactics we’ve created the ‘Lawn Mower Guarantee’ for our home study products. This means you can return a product in any condition (even if you’ve run the mower over the product).
And suddenly, not only is the hat almost kryptonite-proof (it doesn’t shrink, and it doesn’t mildew, and it floats, and is waterproof) but it also covers the hidden risk: The risk of losing the hat.
Now tell me: If you wanted to buy a Tilley-like hat, what would you prefer? Just the usual yada-yada warranty? Or would you prefer the hidden risk to be covered as well?
But the hidden risk is called the hidden risk, because it’s, um, hidden. So to understand what the customer is really thinking, you have to dig deep. So let’s take another example, shall we? And let’s stick to Psychotactics.com this time.
Let’s say you wanted to buy a self-study course…
And you were going to order all the CDs/DVDs and manuals. Well think about it: What’s the obvious risk? The obvious risk is that having spent the money, you’ll find that the product was either not to your liking, or not suitable for your needs. And for that, there’s a 100% money-back guarantee. But is that enough? What about the hidden risk? But what could be the hidden risk?
Put yourself in the customer’s shoes and it’s not hard to find the hidden risk. Now some of us will tear open a package with our teeth, but what if you’re a reluctant customer. What if you weren’t 100% sure the product would suit your needs? Would you be slightly careful not to damage the product? You would, because in the past, you’ve been told: We’ll take the product back, provided it’s in the original packaging and in original condition.
But what if you got the ‘Lawn Mower Guarantee’?
So what’s the Lawn Mower Guarantee? Here’s the quote from the Psychotactics website: You get our ‘Lawn Mower Guarantee’. Which means that if you decide all this information is rubbish, you can literally run your lawn mower over the material and we’ll still give you all your money back. With no questions asked. Return it within 60 days for a complete refund. Just put it in a box (the home study, not the lawn mower ;) and send it back. And I’ll be happy to refund your money with a smile.”
So, not only do you get the usual 100% money-back guarantee. But the hidden factor comes to the fore as well. With the hidden guarantee, you’re now assured that you don’t have to keep the product in its original condition. So guess what? Your hesitancy goes away. But where does it go away? After you’ve bought the product? No, not at that point. It goes away before you’ve bought the product. When you’re reading the sales page itself, you get the feeling that you can get a refund no matter what.
But you needn’t restrict yourself to one hidden guarantee. Because there may be more than one. So we have two. The second one is the ‘Ask Anyone Guarantee’.
The guarantee isn’t some orphan. Give the guarantee some detail and hey, give it a name too!
And again, here’s the straight quote from the website: The ‘Ask Anyone Guarantee’: Before you buy, if you want to speak to any of the participants/past clients, we can provide you with a list. You don’t speak to whom we decide. You speak to anyone who attended/or bought this product/used this service. You pick the person from the list, and decide whom you want to call to find out if the product/service is worth the money. We had participants from Australia, New Zealand, Canada, Korea, quite a few countries in Europe, and the US. So you’ve got a wide range of people you can call.
Which brings us to another pertinent point: Naming the guarantee.
If you’re going to take all the trouble to dig up the hidden risk, then you may as well give the risk reversal a name.
The branded risk reversal doesn’t always work across all products and services. Handle each naming separately, as you would with any branding exercise.
Tilley calls it the ‘The Straight-Shooter’s Statement of Loss’. At Psychotactics, the ‘Lawn Mower Guarantee’ is well-known. What I’m saying here, is give the risk reversal a brand name. Because it’s way easier for a client to remember a guarantee with a name, than just the terms of the guarantee.
The name puts the hidden risk in the spotlight. Your customers are not idiots. They know a risk when they see one. And they’ll recognise that you understand their fears and doubts, and have taken steps to rectify the problem, should it ever occur.
And of course, it’s natural to get lazy.
You might come up with a really cool hidden risk, and come up with a powerful, well-branded risk reversal. And then you may offer this risk reversal across every product and service. And that’s a bit of a mistake (We know, because we keep making it). The hidden risk may work well across all your products/services. And then again, it may not. So while a ‘Lawn Mower Guarantee’ works fine for self-study programs, it won’t work at all if you were trying to get people to a workshop. And your customers aren’t going to find solace in a ‘Lawn Mower Guarantee’, if they’re buying pipes, or ball bearings, or consulting services, or concrete for that matter.
Which is why Granite Rock offers the option of ‘Short-Pay’. It knows that ‘Short-Pay’ works fine across all their products. And when you really sit down and think about it, the real difference between ‘Short-Pay’, and ‘The Straight-Shooter’s Statement of Loss’, and the ‘Lawn Mower Guarantee’ is that they’re not different at all. They’re specific to the situation, and the product/service. But at the very core, they do one solid task.
They identify and reduce the obvious risk. And then they go one step further and find the hidden risk. And remove one more barrier that could possibly prevent the customer from buying.
But all of these facts don’t make you feel any better, do they? What if your customers do ask for their money back in hordes? How can you spend six months of your life working on a project, and then simply hand over the money? And won’t risk reversal cheapen your product/service?
So let’s tackle one question at a time:
1) What if your customers ask for their money back in hordes?
2) How do you reconcile the fact that you’ve put in time and effort? And that it’s the hardest thing in the world to simply refund the money paid for services/or replace the product?
3) Does risk reversal cheapen your product/service?
So yeah, you’re afraid of customers asking for a refund. But the only reason why you should be afraid is if you’ve got a crappy product or service. If your ‘boat’ doesn’t have holes then the �
��sharks’ don’t matter.
So will your customers ask for their money back in hordes?
The answer is yes. This happens when a product is blatantly defective. You’ve seen this with products such as defective cars, or defective medicines. The company that provides the defective products loses several millions just recalling the products. Often the customer is blissfully unaware of the defect, but they recall the product anyway, knowing fully well that they’re liable. And of course, it’s cheaper than a billion-dollar law suit.
However, these recalls are the exception rather than the rule.
If your customers are going to ask for a refund in hordes, then you’re essentially doing something wrong. And remember one thing: It’s very, very hard for a customer to ask for their money back. Most customers will do nothing. They’ll never buy from you again, but they’ll almost never ask for their money back. So if you’re getting a lot of customers complaining, it means your product is defective, and your service isn’t doing what it’s expected to do.
So it’s a good thing if your customers are complaining. It’s better to take the complaints on the chin, and fix the problems, than whine about the complaining customers. The only customers that do complain are those who want you to improve (remember the biriyani episode). The people who don’t care about you won’t complain, but will leave anyway.
You don’t have to risk reverse your entire project. You can cut up a project into slices (pretty much like a cake). And risk reverse each slice. That way you’re only taking a limited risk.
Which brings us to the second question.
How do you reconcile the fact that you’ve put in time and effort? If you’re in the product business, then it’s hard enough to have to dig into your stock to replace a product. But if you’re into services, it really is a matter of management. So let’s take an example of how this may work for say a consulting firm, or a graphic designer or someone who’s specifically doing a project.
Every project can be broken up into several sub-projects.
Think of a project as a cake and you’re cutting up slices. You can slice each sub-project so that it only involves a limited amount of work. That particular slice has an unconditional risk reversal. So keeping in mind that it’s a thin slice, you complete the job, and if you haven’t done it up to scratch, then you fix it, or the project stops moving ahead.
This step-by-step system does two things.
It reduces the risk of both the client as well as your risk. But it also allows you to invoice the client, and make sure the amount is paid for, before the project moves along. Yes, you’ve put in time and effort, but if you keep the project sliced really thin, you can reverse the risk every step of the way.
Risk reversal is a catalytic mechanism that helps you stay afloat rather than sink. Refunds are early warning systems. Pay attention to them, and fix your products and services sooner than later.
And the final question.
Will risk reversal cheapen your product/service? If you truly believe that you’re doing the best for your customer, then shouldn’t the customer make up their mind right at the start, whether to choose your offering?
And a risk reversal doesn’t cheapen your product at all. In fact, as Jim Collins points out, it’s a catalytic mechanism, that you must have in your system, because it enables you to spot faults—and iron them out quickly. If there’s no risk reversal in place, complaints are just complaints that a company could possibly ignore. But when you offer a risk reversal and clients actually ask for their money back, you’ve got to move quickly to see that the problem doesn’t reassert itself and cause more financial damage.
Rather than cheapen your products/services, it says that you stand behind your offering. Because when a customer can quite plainly see that you believe in your product, they feel the risk slide away much faster.
And by this point, they’re only asking one question: What makes your product/service unique?
Aha, time for the last bag: Uniqueness.
But before we go over to the final bag, let’s take a look at the two examples we’ve been tracking right through this book.
Example 1: Website strategy workshop
Example 2: An allergy clinic
Website strategy workshop
Target Profile: Howard R.
Problem: How do I grow my internet business, without compromising on my ethics?
Solution: Here’s how to create a website strategy that’s ethical, yet extremely profitable.
Objections:
- Not sure if I have time to implement more information
- Travel always takes time and energy
- I’ve just got myself a project manager which leaves me with fewer discretionary dollars
- Not sure if there’s an overlap of information from other courses
- I don’t need more tactics. What I need is a strategy.
Testimonial:
“I figured the Website workshop would be a rehashing of older material.”
Before the Website workshop, I had my doubts about what I could learn. I have been on 5000bc for more than a year, read The Brain Audit - I’m even in the Protégé program. So I was a little skeptical about hearing anything new; I figured it’d be a rehashing of older material.
I also didn’t know how I would swing the time away - I’ve been so busy implementing the Protégé teachings, and I was concerned that this might take me off-target.
And here’s what I found:
I don’t think I can really put into words how comprehensive and integrative the class was. We learned amazing material. We learned how to apply it to our businesses. We discussed and shared with others, so it wasn’t just direct learning, it was tangential - we were ‘cross-pollinated’ by everyone else’s epiphanies, so the learning was exponential. It was pretty darn amazing!
Risk Reversal:
1) Money-Back Guarantee
2) Ask-Anyone Guarantee.
An allergy clinic
Target Profile: Tricia M.
Problem: How do I get rid of my allergic reaction to wine?
Solution: Here’s how you can get rid of the allergic reaction in less than 24 hours (and without any pills or medication whatsoever).
Objections:
- I’ve tried these anti-allergy clinics before and it didn’t work for me
- The treatment seems to be quite expensive
- Will I have to go for several treatment on a recurring basis?
- What if the treatment doesn’t work for me?
Testimonial:
“I thought the treatment would be quite expensive. And I was right!”
The treatment was quite expensive. But was it worth the expense? Let’s see. I’ve had this allergy for well over twelve years. And no matter what I did to get rid of the allergy, nothing seemed to work. In fact, when I really think about it, I may have spent far more money popping some kind of anti-allergy pills that only brought me temporary relief.
And here’s what I found:
The allergy clinic treatment on the other hand, worked like magic. It’s been six months since I’ve sneezed. And I can tell you I’ve been enjoying my red wine. I no longer have to rush home early with my face all puffy and red-eyed. I can stay and enjoy the company of my friends. And of course, when my husband and I spend a romantic dinner, I can enjoy a glass or two of fine wine, and the evening doesn’t end up with me having to drink tomato juice instead!
Risk Reversal:
1) Testimonials of clients with similar issues
2) No pills or invasive techniques guarantee.
You’ll notice a slight variation in the two risk reversal examples. The first risk reversal for the workshop is based on the factor of ‘100% Money-Back’ and ‘Can I Ask Anyone?’ The allergy clinic on the other hand can’t promise a result.
So while they have to stick to testimonials to provide proof, they can still bring up the hidden risk reversal and reduce the risk. Every step you take to reduce risk make
s it easier for the client to take a more informed decision. And to choose you instead of some other supplier. So make sure you worked darned hard on that risk reversal.
Butter Chicken Recipe
By the time you get to this part of the book, you’re sure to be hungry for some Indian food. Well here’s a verrrrrry cool recipe for Butter Chicken. It’s not the watery Butter Chicken you get at your food court, or at most Indian restaurants. Just a look at the ingredients will convince you that this isn’t an ordinary dish at all. So try it. You’ll love it!
Don’t take my word for it. You’ll be licking your fingers, dishes and everything else in sight after you’re done.
If you’ve got an Indian store down the road, you can pick up most of these ingredients without a problem. I’ve even seen some of the supermarkets stock them. It’s not a treasure hunt. Most of this stuff is easy to find.
Preparation Time: Expect to spend a couple of hours (at least!)
Serves: 4–6
Ingredients:
100gm cashew nuts (A handful)
1 kg fresh tomatoes or Puree
¼ litre cream (Here come the calories!)
Boneless chicken 1–1.5 kg
Ginger ½ inch piece
Garlic 1 pod
Yoghurt 200 gms (1 cup)