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| The Client Letter |
| Risky Business |
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September 7, 2011 Sedona, Arizona I’ve always struggled with the traditional idea of “risk reversal” as a marketing strategy for a service business. Risk reversal (taking all the risk of working with you off your client’s shoulders and putting it on your own, maybe in the form of a guarantee) is fairly straightforward if you’re selling widgets. After all, if someone returns a widget, chances are, you can resell that widget. So while you say that “all the risk is on MY shoulders” when you’re selling a widget… the truth is, the amount of risk you’re accepting is pretty darn small. But what about when you’re selling services… and doing it in a business where there really ARE no guarantees? Take my business–marketing consulting and copywriting. I help my clients leverage the value in their businesses and create higher bottom line profits using some very powerful tools: proven marketing/business strategy and copywriting that actually gets people to take action. But here’s where I’ve always run into a problem trying to add in the idea of risk reversal. As a business owner, should I REALLY accept the risk for the success of a project when I do not control all of the factors that are required for that success? Of course not. After all, I can’t control whether my client’s product is a good one. And I certainly don’t control whether my client is marketing a product that someone actually wants. I used to accept that risk anyway… I put the burden of proof that I could deliver real results squarely on my shoulders. Trust me, that’s not a good feeling to put yourself in that position. Risk Reversal 101
It’s a bit like lying down in the road and giving my client the choice to drive over me or not… based on how the market reacts to his products. It can be painful… and very expensive. Mainly because there is little accountability required on my client’s part to accept a proposal like that. What are people saying about Moneymaking Secrets of a Renegade Freelancer:
“Jason Leister has compiled the best list of actionable advice for freelancers I have ever read, and if I had known back then what I know now, I would not have wasted countless hours trying desperately to please clients who completely devalued everything my staff and I did for them. This book provides amazing advice about how to become a service provider worthy of earning top dollar. With the advice from this book, you will know exactly how to deal with the “why can’t you do it cheaper?” question.” Think about it: Do you really want clients and customers to do business with you simply because there is NO risk to them? Hellz no! Where there is no risk, there is no accountability. There is no “skin in the game.” That’s a problem in the client business. Here’s another idea. Perhaps you can apply this to your business. Sometimes, the Solution to a Problem
is to Realize that the “Problem” is Just a Symptom of the REAL Problem The REAL problem isn’t the idea of risk reversal at all. It’s simply how you view your client/customer. Even more, it’s about how your client views YOU. Let me explain what I mean. Many businesses view their customers/clients as adversaries. The business owner has to convince the customer/client to buy the product or service in question. Instead of reversing the risk, which makes the boundary between your business and your prospect even more pronounced, consider this: Why not get up out of your chair, walk around to your PROSPECT’S side of the table and have a seat right beside him? I’m speaking figuratively here… Align your goals with your prospect’s goals and accept shared risk as “partners” for what you’re trying to achieve together. You need to become partners with your client in a way… which is a very different relationship than most independent professionals have with their clients. Now there is one problem with this strategy. To get prospects that are savvy enough to see the value in a situation like this, there’s a good chance you’ll need to tweak your marketing systems to generate a higher quality prospect. You need better marketing. You need to figure out a way to attract clients that see you as a professional they can partner with instead of someone they hire to do “X.” At that point, the whole idea of “risk reversal” becomes a little bit obsolete. Your client isn’t looking to remove the risk from working with you… he just feels lucky you agreed to help him out. See you tomorrow,
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