Monday, September 26, 2005

Win More Business by Sharing the Risk

Motivating customers to buy your product can be the biggest challenge for a company trying to build its business. Inc. article, “…Or Your Money Back?” shows readers how they can transfer the risk of a transaction from their customers to themselves.

That’s the strategy Matthew Smith enlisted to develop his Shoes for Crews business. He offered to pay workers’ compensation claims to give peace of mind for managers concerned about injuries and workers compensation. It was too attractive an offer to resist and nine of the 10 largest restaurant chains buy the shoe brand or actively encourage their employees to do so.

Initially Smith put a $500 cap on the warranties but that was extended to $5000.

Introducing the warranty had an enormous impact on Smith’s business. Sales of his $25 to $75 shoes multiplied and he was able to secure impressive contracts with large companies.

Here are some suggestions for warranty offers:
  • Test your warranty offers on a handful of key accounts.
  • Do exactly what your warranty pledges you will do.
  • Fulfill your promises and clients will return.

By figuring out a way to minimize your customers’ risk, you can build a stronger business.

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