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Trouble Closing? "Shared-Risk" Seals the Deal

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in The Integrated Marketer

The economy is in trouble.  But good marketing can still find you plenty of qualified buyers.  It’s just harder to close the deal.


For instance, one CEO friend of mine says his sales force has no trouble finding prospects who don’t have upside-down mortgages, vanishing jobs, huge credit card debt or a looming retirement. “But,” he notes, “they get all ready to sign and then at the last moment, they say something like, ‘I just feel maybe I should really wait before committing,’ and the whole thing goes cold.”


A “shared risk” offer can warm up those cold feet.  

In real estate, for example, people hesitate to buy right now because they think there’s a risk that prices might fall even further.  They don’t want to miss a better deal and they certainly don’t want to get stuck with property that goes down in value.  A Virginia real estate development firm has come up with a “shared risk” offer to get people to go ahead and commit.

Basically, the offer is this: Buy now. If the appraised price of the property goes down over the next two years, we’ll pay you the difference.


Signing the contract just got a whole lot less risky. This offer is much stronger than adding extras (like a kitchen upgrade) or reducing the price.  Yet for the seller, the cost exposure of the shared-risk offer is about the same dollar amount as an upgrade or discount.  PLUS, if the value of the property doesn’t go down, the offer winds up costing the seller absolutely nothing.


Take a look at your own business.  Is fear of real or perceived risk keeping your customers from committing?  If so, spend some time brainstorming about shared-risk offers that could turn your sale from cold … to gold.


Tell us about any good shared-risk offers you’ve seen or used!

{ 1 comment… read it below or add one }

Phil November 25, 2008 at 10:09 am

Interesting concept, Judy. The credit card companies do this with “price protection” guarantees.

I think a strong guarantee is critical to product success. In our business, we always offer a 100% full-refund, no questions-asked guarantee. And less than 2% of the people ever take us up on it. The sales impact of the strong guarantee is surely greater than the refunds.

We have some competitors who go even further and offer a 125% guarantee. I’m not quite ready for that one though.


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