Putting Your Insurance Practice in Warp Speed Through Reversed Risk (Part 1)

September 14th, 2022

Many of you have asked me to write more about reversing the perceived risk that your clients have, so I’m going to do that over the next two blogs.

In my coaching program, I’ve received many email messages and faxes, where my subscribers asked me to address and write about some of the problems they were having. Each month I have given them the step-by-step methods to solve those problems but at the same time to build their practice by creating more and more clients. When you get a few moments, please go to www.buildyourpracticefast.com and let me know what you think of it.    

Reversing the perceived risk of your client is such a powerful tool that it will distinguish your company/agency and make it next to impossible for your clients to say no.

Any business that can take the burden of risk off of their customers can more than double their total number of sales.

Whenever any two people get together to transact business, one side is always asking the other to assume most or all of the risk.  You see this often in many negotiation sessions.

It’s a simple fact of insurance practice also.  But here’s the problem. When the person who must assume the risk happens to be your client, the natural inclination is to hesitate, to be uncertain, and not to purchase.

What makes clients hesitate? They are concerned that once they have paid you their hard-earned money, your product might not perform or your service will not meet their expectations. 

They may also be afraid of looking foolish or being embarrassed if the purchase doesn’t turn out right.

All of us have had the experience of purchasing something and telling our friends, spouses, or relatives about the purchase and something goes wrong. We become embarrassed, when they laugh at us for being so stupid for falling for that line the salesman told us.

Your prospect’s decision about whether or not to buy will be motivated by two things:

  1. Their confidence in your product or service and…
  2. The level of risk you are asking them to take on in the transaction.

Your problem, and challenge, is to creatively figure out the best way you can reduce or even eliminate the element of risk or fear that is going on in their minds. Lowering the level of risk for the purchaser will result in sales.

Take away the risk and you get them to say, “yes”. 

If you do this you can also steal the clients away from your competitors. They will be more inclined to purchase from you than from your competitor because your competitor didn’t reverse the risk of doing business.

The most important goal of risk reversal is to get people comfortable in trusting you before they have to make any commitment.  The easier and faster you get people started in a relationship, the more comfortable and trusting they will become, and the faster you will get to a profitable transaction with them.

I’m going to give you three ways to reduce risk, but there are many others.  You must choose the type of risk reversal offer that’s right for your type of practice or industry. 

Remember: You make the rules in your practice.

How do you reverse risk?  Remember that risk reversal is a promise to your prospect or client that if they aren’t happy, you will do whatever it takes to make them happy.  In prior issues, I wrote about offering a simple money-back guarantee.  That’s one way to do it, but there are other ways to reverse risk.

Let me go over a few of them.  Please massage them to fit your business and when you think of others, let me know so that I might share them with the other subscribers.

Total Monetary Risk Reversal:

The most common type of total risk reversal is the money-back guarantee, in which the seller promises to refund the buyers’ money if the product or service doesn’t live up to their expectations. A much more advantageous variation is the “free trial” or “puppy dog” offer I’ve mentioned in the past. This is where the buyer doesn’t spend any money upfront.  Instead, the purchaser pays only after they have received, examined, and evaluated the product or service over a period of time.

If you offer a risk-free guarantee in your insurance company, let me stress the following. Be very definitive about what you are guaranteeing.  Many companies simply say, “Satisfaction guaranteed or your money back,” or “You must be satisfied or we will return all of your money”. 

What does “satisfied mean?” If you don’t define it clearly, you are forcing your client to figure out what “satisfaction” means or what they should experience.  It’s much more effective to be very definitive in your statements.

Here’s an example:

Let’s say you sold a policy.  Don’t simply say to your clients, “Your satisfaction is guaranteed or your money back.”  Instead say, “If our Insurance Policy  doesn’t do what I’ve told you it would do within the next 30 days, just return it and we will give you your purchase price back.”

There is a 30-day lookback law in New Jersey that I use.  It would vary from state to state so check with your state on your lookback period.

Do you see how much more effective it is?  You have painted a vivid picture in your purchaser’s mind, defined the outcome of exactly what the product will do, and they will get their investment back within 3 months.

Be very specific in your guarantee, as they will give your guarantee credibility, making your insurance practice stand out in the process.

I risk reverse everything I sell.  If you come to one of my seminars, you get all the materials upfront.  If you don’t feel I’m giving you ten times more information than you paid by the second morning, you can get 100% of your money back.  By doing this, I’ve found that I’ve more than doubled the number of people who attend.

Whenever I do consultations, I stop after 30 minutes and ask the client if they haven’t gotten more than they paid for so far, I want to give you your money back.

I do this because I am very confident that I’m performing, so there isn’t any reason in the world why you can’t come up with one or more powerful risk reversals for your products or services.

Well, that’s it for this issue. Stay tuned for part two of this topic in the next couple of weeks…

If you need step-by-step instructions on how to implement this and other ideas I give on creating clients, just visit Build Your Practice Fast Academy and sign up for my one-on-one coaching program.

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