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marc dussault &Risk Reversal Martin Lee on 15 Apr 2007

The One Dollar Risk Reversal Strategy

In a normal risk reversal offer, you provide a product or service to your client and give them a money back guarantee. This usually comes with a time frame of 30 days, 60 days or even up to a year.

While it beats going around without a risk reversal offer, there may still be a heavy commitment (depending on the price) required from your prospective client.

A more advanced way of doing a risk reversal offer is to offer your product or service with no money down required with billing only after x number of days. This is likely to give you higher sales than the normal risk reversal but may also attract some freebie seekers.

An improvement to that method is to take a initial token charge of say a dollar to qualify the prospect. The remaining amount can then be charged to the card after x number of days.

I would like to share with you a case study of the “one dollar risk reversal” in action.

Dr Marc Dussault of Jay Abraham Asia Pacific is conducting a series of Business Mastery Secrets weekend seminars in Sydney, Brisbane and Melbourne.

Now, what Marc has done is that he has offered to let anyone attend the 2-day seminar for just an initial payment of one dollar.

So, anyone can attend the full 2 days, and if they decide the seminar is not worth the price of admission, they can even get their $1 back. On the other hand, if they think the seminar is well worth the money, they do not have to do anything and they will be billed the remaining amount for the seminar seven days after the event.

This gives people a chance to actually go through the entire seminar and make a judgement for themselves rather than relying on any sales pitch.

You might ask, “What about those freebie seekers? People who signup with no intention of ever paying no matter how good the seminar is?

Yes, there are going to be a few freebie seekers. But think about it. By using this approach, there will be an marked increase in the number of signups. Why worry about not collecting money for that 5 refunds when you are going to get 100 more signups?

In Marc’s case, there are a couple of other things to bear in mind:

1) There is an added incentive for Marc to make sure that the seminar delivers or even overdelivers on the value to minimise on the number of refunds. One way of doing it is to add on bonuses to the original offer.

This goes for any risk reversal that you are going to employ. Your product or service must be what you said it is. Underpromise and overdeliver.

2) There will be people who pay the $1 and do not show up. As Marc’s venue has a capacity of only about 300 people, this might deprive other people of a seat. For example, if 150 people take up the one dollar offer and only 75 turn up, he would have wasted 75 seats.

He could take a slight risk and accept registrations for more than 300 people. But what happens if all of them turn up?

Having said that, this is still a strategy you can use when you have excess capacity.

Personally, I would prefer using the one dollar strategy for product sales rather than seminars. For a product, the onus is on the buyer to send back the item for a refund. For a seminar like what Marc is doing, there could be many distractions that prevents the buyer from turning up on that day.

marc dussault Martin Lee on 13 Dec 2006

Marc Dussault SME Event

Dr Marc Dussault, Managing Director and Exponential Marketing Growth Strategist of Jay Abraham Asia Pacific, recently conducted a three hour seminar for business owners in Sydney, Australia on 30th Nov 2006.

Together with Mr Richard Evans, founder and CEO of Imagine Essential Services and Mr David Younger, Managing Director and CTO of TheServiceManager.com, the three speakers shared with over 200 business owners strategies on exponential marketing, business cost reduction and business systemisation respectively.

A webcast of the event is available at the Jay Abraham Asia Pacific website.

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