Increase sales? Guaranteed!

More often than not, people do not buy a product, not because they did not like it, but because they are not sure that they liked it. The best way to relieve them of this uncertainty is to provide a guarantee, even one that seems risky to the seller himself. During the Guerrilla Marketing conference, Alexander Levitas, an expert in the field of budget-free marketing and winner of the title “The Best Business Coach of Russia”, shared several ways of increasing sales tenfold using the guarantee system.

One way or another, the purchase presents a risk to the buyer, and if it is possible to eliminate this risk, consider that the sale on 90% is completed. How to reduce the risk for the client? There are several ways.

The "Foot-in-the-Door" Method: This method involves selling a small portion of the item instead of the whole, thereby building trust with the buyer. For example, instead of selling an item worth 10,000 rubles, try selling it for 1,000 rubles, or instead of 5,000 rubles, try selling it for 500 rubles. Once the buyer is convinced that the item is in good condition and can trust you, it will be much easier for them to make a more expensive purchase.

The "Fire Yourself" Method, a version for extreme sports enthusiasts: To shift the risk away from the buyer, you can transfer it to yourself. This approach inspires strong respect for the seller and trust in the product, but at first glance, it seems quite risky. The main message is: "Unsatisfied with the product? Then we'll just refund your money!" – just like that, without filling out dozens of forms, additional return policies, and time limits – the buyer should be able to return the product whether it's the same day or even five years later. It might seem that this approach wouldn't work with a personal item like shoes, but the example of clothing manufacturer LLBean suggests otherwise. The company was running a similar promotion, and a customer who had purchased a hunting jacket ten years earlier decided to test the offer. He brought the battered and weathered jacket back to the store and was extremely surprised when they simply refunded his money without further questions. Impressed, the man immediately bought several other items and told his friends about the company. But the real point of the "Fire Yourself" approach isn't how much trust it increases in the store, but how tiny the return rate is. The real truth is that people aren't as bad as we think—the vast majority of us don't want to behave badly. People don't steal from restaurants even when they have every opportunity to do so, and they won't return used goods unnecessarily. Therefore, the risk of using the extreme "Fire Yourself" approach is more likely to be justified.

The "Fire Yourself" Method, a Cautious Version : If you're still worried about buyer terrorism, try using a full money-back guarantee with a temporary "point of no return." Give the buyer a period of time to exchange the item without explanation—say, a week or two. However, this method is more suitable for items with expiration dates, and in the footwear business, it can be applied to shoe care products.

Method "We will also pay ourselves": If a client purchases a product or service and remains dissatisfied with it, the seller not only returns the money, but also pays the buyer himself - “for the competitor's product”. Naturally, the sold product must be out of competition, but the risk in any case is 1-2%. The method can be used relatively safely if the loss from the return is comparable to the cost of the product itself. For example, if a pair of shoes cost the seller $ 100, and fulfilling the obligations under this guarantee cost $ 200. If the product cost $ 30, the return rate of already 5% can turn into big losses. True, such a percentage is more likely something out of the ordinary, and it happens extremely rarely, therefore this method of guarantees turns out to be profitable even with low marginality.

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"Better than No Risk": What could be better than a free return policy or pay-as-you-go pricing? Just the same policy, but with a nice gift. Even if the buyer returns the item, they keep the gift, so the only risk they have is their time. Who wouldn't want that?

For greater effectiveness, to maximize the sales potential of a guarantee, it can be backed by other types of guarantees. An inexperienced negotiator comes to negotiations with one option like a "knife in a gunfight," while an experienced one has several options in reserve in case one fails. Therefore, if you have a well-established guarantee system, the likelihood of a successful sale increases significantly. If you want to be on the safe side, you can offer the guarantee only to the first hundred customers, not all. After a successful experiment, you can move to a second test level and offer the guarantee to the first 1000 customers, and after that, only for August sales (or any other time period). If sales increase, implement the guarantee system permanently. Generally speaking, guarantees work well where there are many customers and losing 1-2% of them is significant. But even if customers are few, a guarantee system will attract new customers—an undeniable advantage.

The most pleasant thing about using guarantees as a sales driver is that the conversation about the price remains, in principle, behind the scenes, and the seller does not add the buyer to the "discount needle" - only guarantees, only full payment. Plus another pleasant side effect: when you use guarantees, the average check rises.

Only part of the article "Increasing sales? Guaranteed!" You can read the full version in Shoes Report # 108.