When a person comes to your site to buy your product or service, or even just to browse through what you offer, he or she usually has several concerns:
- Is this company legit?
- Does it work as advertised?
- Will I get my money’s worth?
- What if I am unhappy with my purchase?
These and others oftentimes prevent a client from buying, or at least delay the decision-making. The good news is that there are a number of simple but proven risk removal techniques that, when implemented correctly, may have an immediate and dramatic effect on your online sales.
Five risk removal strategies that apply to almost any web-based business:
Shareware, as the Wikipedia definition goes, is proprietary software that is provided to users without payment on a trial basis. By letting people download and try the software before buying it, the shareware industry was able to successfully compete with large companies who already had recognized distribution networks, sizable marketing budgets and established reputation. Even one-man operations, like Eugene Roshal’s WinRar, were able to reach the audience of hundreds of millions of end-users by employing this simple strategy.
# 2. Use the freemium model
As SaaS (software-as-a-service) grew more and more popular, the freemium model became what shareware used to be. In some ways, both models are similar – you get to try the software before committing to a purchase.
However, with freemium services, the basic plan is free for life. It is an important distinction because this lets free clients get “addicted” to the service, which eventually increases conversion rate. Typically, 2% – 4% of those who sign up for free plans end up becoming paying clients.
Second, if your basic (free) plan is as good, if not better, as most paid options available in the market, you can become a leader even in a mature market as quickly as a single year. See Bitrix24, Asana or Hootsuite for inspiration.
# 3. Let customers pay only if they like your work
If you need a new business name, domain or slogan, services like PickyDomains.com offer a convenient solution. You place your order, start getting suggestions and pay (anywhere from $50 to $150 depending on the service you need) only if you decide to use one of them.
99Designs offers similar terms for design projects. Of course, neither money-back guarantees nor spec works are new inventions. However, in “creative” niches like naming and design where the risk to pay a lot of money but end up with work you don’t like and can’t use is quite high, this risk removal approach allows you to stand out in the crowd.
# 4. Guarantee results where others can’t
There are several business niches where there is simply no way to guarantee results, like public relations, for example. 99% of PR agencies will be happy to take your money, but the first thing they’ll tell you is that results aren’t guaranteed. This is what makes companies like PublicityGuaranteed.com or LondonPRAgency.com stand out. They bill their clients only for articles that come out in the press or are published online.
By doing this, they are taking the risks from their clients onto themselves, which in itself is quite risky as they might end up doing lots of work for no pay. If this is the path you choose, make sure to take only clients you are 100% sure are worthy of your time.
# 5. Let the client set the price
When the writing load became too much to effectively accomplish alone, a good friend of mine tried two services to find freelance writers – Elance and oDesk. The sites are pretty much identical, except for one thing: Elance has a $25 assignment minimum. With oDesk, however, he could set his price to as low as $5. As a result, he created a lot of small $5 writing assignments, and from those that submitted paid trial articles, he selected those writers whose work he liked best.
To this day, he has spent over $3,000 on various projects via oDesk. His Elance total stands at $50 even though the site’s writers are probably as good as oDesk’s.
There are a number of web businesses where the “name your own price” model plays a big role in their success, like Priceline, for example. A big part of the popularity of AdWords lies in the fact that each client decides how much to bid on a particular word for the sole reason that they alone know how much it’s worth for their businesses.
Conclusion
There are other risk removal techniques out there. Some may better fit your business than others. If you think it’s worth your time, Google “prospect theory,” “loss aversion” or “Daniel Kahnemann” to get scientific explanations to why avoiding risks is hardwired in the human psyche, and to get more ideas on how to integrate risk removal into your marketing campaigns.
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