Nov. 10, 2025
Risk Reversal
Risk Reversal – A strategy that makes your offer compelling and that Business Owners should use more often.
Become a supporter of this podcast: https://www.spreaker.com/podcast/powerful-business-strategies--6198916/support.
WEBVTT
1
00:00:04.639 --> 00:00:11.320
Hi, you have done too, dear censure, Wow.
2
00:00:11.560 --> 00:00:21.160
For you your This is the pipe Man here on
3
00:00:21.239 --> 00:00:23.879
the Avengers Pipe Man W four c Y Radio with
4
00:00:24.079 --> 00:00:28.480
my Positively Pipeman segment and once again we're gonna have
5
00:00:28.519 --> 00:00:32.600
a resident expert talk about some powerful business strategies. So
6
00:00:32.759 --> 00:00:36.000
let's welcome to the show. Michael Barbarina from Next Step CFO.
7
00:00:36.159 --> 00:00:36.560
How are you?
8
00:00:36.719 --> 00:00:38.799
Thank you, Thank you Dean. Great to be here again.
9
00:00:39.960 --> 00:00:42.679
So today I want to talk about something that business owners.
10
00:00:43.679 --> 00:00:46.439
I don't know why they're hesitant, although I have three
11
00:00:46.520 --> 00:00:50.240
reasons later on why I think they're hesitant. But it's
12
00:00:50.280 --> 00:00:54.039
a strategy that works very well. It's because the customer
13
00:00:54.880 --> 00:00:57.719
doesn't want to look like a fool, doesn't want to
14
00:00:57.799 --> 00:01:01.880
make a mistake, doesn't want to be embarrassed with their spouse.
15
00:01:03.000 --> 00:01:08.439
But it's called a risk reversal. And what a risk
16
00:01:08.519 --> 00:01:11.879
reversal does is it transfers the risk from the customer
17
00:01:12.640 --> 00:01:18.000
to the seller and it makes it easier for the
18
00:01:18.120 --> 00:01:23.079
customer to say yes to your offer. So, and what
19
00:01:23.280 --> 00:01:26.239
happens is is business owners one of the things they
20
00:01:26.319 --> 00:01:29.280
think about is they think that they're going to get
21
00:01:29.280 --> 00:01:32.840
a lot of returns or that customers are not. You know,
22
00:01:33.159 --> 00:01:36.719
their customers are going to take full advantage of the
23
00:01:36.760 --> 00:01:39.159
business owner, because that's all customers do, is they take
24
00:01:39.200 --> 00:01:41.599
full advantage and they try to get as much out
25
00:01:41.640 --> 00:01:45.439
of it as humanly possible, even if it means you know,
26
00:01:46.760 --> 00:01:50.239
you know, returning everything and getting double their money back
27
00:01:50.280 --> 00:01:54.040
or whatever that risk reversal happens to be. That's not
28
00:01:54.200 --> 00:01:56.719
the case. And I can tell you my quick story
29
00:01:56.760 --> 00:01:58.560
when I was in the ski business. The problem the
30
00:01:58.640 --> 00:02:01.000
customer had the ski and is that they really never
31
00:02:01.079 --> 00:02:03.400
knew if the ski they were being sold was the
32
00:02:03.519 --> 00:02:06.040
right ski for them until they got it up in
33
00:02:06.079 --> 00:02:08.800
the mountain and tried it out. And so we implemented
34
00:02:08.879 --> 00:02:10.919
what we call the ski guarantee ski of the ski
35
00:02:11.039 --> 00:02:12.560
three times you don't like it, bring it back for
36
00:02:12.639 --> 00:02:15.080
a brand new pair, and keep bringing it back until
37
00:02:15.080 --> 00:02:19.759
we get it right. And the result was eight thousand
38
00:02:19.840 --> 00:02:22.240
pair of skis sold, a twenty five percent increase from
39
00:02:22.240 --> 00:02:24.719
the previous year, and only eight came back. Because all
40
00:02:24.879 --> 00:02:29.080
people wanted was a great ski experience, and all people
41
00:02:29.240 --> 00:02:33.759
want is whatever your product or service delivers, to have
42
00:02:33.879 --> 00:02:38.360
a great experience with it. That's it. Sure, there's going
43
00:02:38.439 --> 00:02:40.439
to be a couple of people who might take advantage
44
00:02:40.439 --> 00:02:44.560
of it. But you're dealing with the law of large numbers,
45
00:02:44.960 --> 00:02:49.039
which means your entire customer base. Out of your entire
46
00:02:49.120 --> 00:02:53.360
customer base, believe me, only a very small percentage, you're
47
00:02:53.360 --> 00:02:56.960
going to take advantage of the offer. And what I
48
00:02:57.120 --> 00:03:01.319
find is is when I present this to clients, they're
49
00:03:01.479 --> 00:03:07.000
really hesitant. But there's three reasons why a business owner
50
00:03:07.159 --> 00:03:12.199
resists doing a risk reversal. Number one, they're not confident
51
00:03:12.240 --> 00:03:14.759
in their product or service or their quality, which is
52
00:03:14.800 --> 00:03:17.479
a big problem if that's the case, because you have
53
00:03:17.680 --> 00:03:21.199
to you have to be in a position, whether relatives
54
00:03:21.319 --> 00:03:24.280
how confident you are about your product, that it's your
55
00:03:24.439 --> 00:03:29.039
obligation to your obligation to sell that product to that
56
00:03:29.199 --> 00:03:35.159
customer because you offer the best period for them. And
57
00:03:35.759 --> 00:03:38.240
if you're not that confident with your product or service,
58
00:03:38.319 --> 00:03:40.599
then I can understand why you're not doing a risk reversal.
59
00:03:42.080 --> 00:03:47.680
The other thing is business owners don't really understand the
60
00:03:47.800 --> 00:03:52.919
mathematics involved in the value of the long term value
61
00:03:52.919 --> 00:03:58.199
of a customer. And when you understand the long term
62
00:03:58.280 --> 00:04:01.599
value of a customer and you understand that the risk
63
00:04:01.680 --> 00:04:05.639
reversal is going to convert more of those customers into sales.
64
00:04:07.120 --> 00:04:10.800
Then not only do you have more sales today, but
65
00:04:11.000 --> 00:04:13.759
your future the future value of that customer is now
66
00:04:13.840 --> 00:04:17.000
in play, and you're going to increase the value of
67
00:04:17.079 --> 00:04:24.439
that customer. So it's incredibly valuable once you get a customer,
68
00:04:24.879 --> 00:04:27.240
because once you get a customer, there's a lifetime value
69
00:04:27.279 --> 00:04:29.759
component to it. They're going to order again and again
70
00:04:30.040 --> 00:04:35.279
and again. And because of that, the risk reversal is
71
00:04:35.319 --> 00:04:38.800
an outstanding strategy because you're going to convert more people
72
00:04:39.240 --> 00:04:45.399
to say yes to your offer. And then the third
73
00:04:45.480 --> 00:04:50.040
reason why business owners resist risk reversals is they're thinking
74
00:04:50.160 --> 00:04:53.160
like employees instead of strategic business owners. And let me
75
00:04:53.240 --> 00:04:58.319
tell you, when I presented my ski guarantee to my staff,
76
00:04:59.079 --> 00:05:01.920
I thought I was out of my mind because they
77
00:05:02.000 --> 00:05:04.879
had visions of thousands of pair of skis coming back
78
00:05:05.000 --> 00:05:06.879
and us losing a ton of money and it'll never
79
00:05:07.079 --> 00:05:10.920
work and boy, we'll lose our shirt. But that didn't
80
00:05:10.959 --> 00:05:14.920
happen at all. That the mindset of a business owner
81
00:05:15.920 --> 00:05:19.759
is number one. The competition may not be in position
82
00:05:19.879 --> 00:05:23.160
to do it. By the way, my competitives never ever
83
00:05:23.800 --> 00:05:26.839
copied me on that. They never did Wow, yeah, they
84
00:05:26.920 --> 00:05:27.480
never did.
85
00:05:30.199 --> 00:05:30.240
So.
86
00:05:30.920 --> 00:05:33.319
But but you know, the competition is going to either
87
00:05:33.399 --> 00:05:35.079
be slow to the draw because you're going to be
88
00:05:35.160 --> 00:05:38.480
first doing it, or uh, they're not going to be
89
00:05:38.720 --> 00:05:41.399
have the logistical positioning to do it. They might not
90
00:05:42.079 --> 00:05:48.120
have or the mindset themselves to do it. So uh
91
00:05:48.360 --> 00:05:50.800
that but that's thinking like a business owner, and thinking
92
00:05:50.920 --> 00:05:55.160
like a business owner is knowing that all you're doing
93
00:05:55.920 --> 00:05:58.879
is giving the customer a great experience because your product
94
00:05:58.959 --> 00:06:02.160
or service is superior. And if you don't think your
95
00:06:02.160 --> 00:06:05.319
product the service is superior, that's big trouble.
96
00:06:05.600 --> 00:06:09.000
That's why they didn't compete. When your competitors didn't follow
97
00:06:09.279 --> 00:06:09.720
suit with.
98
00:06:09.879 --> 00:06:11.800
You, I know they were they were afraid to do it,
99
00:06:12.839 --> 00:06:14.800
and they didn't know how great we're doing with it.
100
00:06:14.920 --> 00:06:18.680
Although you know, rumors do get out unfortunately they do
101
00:06:18.839 --> 00:06:20.800
a lot of and a lot of businesses they do,
102
00:06:21.040 --> 00:06:26.000
especially within an industry. But and so the fact that
103
00:06:26.079 --> 00:06:31.680
we were doing well didn't didn't drive them motivate them
104
00:06:31.800 --> 00:06:34.920
to copy it. And it was a simple thing to copy.
105
00:06:34.959 --> 00:06:37.439
It's not really It didn't really take much of a
106
00:06:37.519 --> 00:06:40.160
logistical thing other than how do you handle a return,
107
00:06:40.240 --> 00:06:41.800
which is kind of commonplace anyway.
108
00:06:42.480 --> 00:06:45.560
Well, that's why so many companies, especially when you see
109
00:06:45.600 --> 00:06:50.000
ads on TV or on the radio or you know,
110
00:06:50.199 --> 00:06:54.279
even a lot of speakers do it. You know, they
111
00:06:54.319 --> 00:06:57.800
always have that thirty day guarantee and they have that
112
00:06:57.959 --> 00:07:01.240
three day guarantee because they're thing that you're not going
113
00:07:01.319 --> 00:07:02.240
to return.
114
00:07:02.879 --> 00:07:06.639
Absolutely, there's no question about it. And that's but that's
115
00:07:06.680 --> 00:07:09.879
the big hang up that we business owners have. We're
116
00:07:10.000 --> 00:07:13.279
just thinking that all the customers going to do is
117
00:07:13.439 --> 00:07:17.480
utilize the ski because with my ski guarantee, they could
118
00:07:17.519 --> 00:07:19.600
ski the ski. I don't know how many times they
119
00:07:19.600 --> 00:07:21.439
could ski the t ten times and bring it back
120
00:07:21.480 --> 00:07:24.800
and I wouldn't know it right right, so uh and
121
00:07:25.160 --> 00:07:27.720
and they could and they could, and what they could do,
122
00:07:28.439 --> 00:07:30.920
what they could have done is every three weeks, every
123
00:07:30.959 --> 00:07:33.240
four weeks, bring it back and try something else, because
124
00:07:33.560 --> 00:07:38.839
skiers love to try different right skis, and so they
125
00:07:38.879 --> 00:07:41.879
could have done that. But all they wanted was the
126
00:07:41.959 --> 00:07:44.120
great ski experience with the skis that they had. If
127
00:07:44.160 --> 00:07:47.160
it was right for them, great, it made their experience better,
128
00:07:47.639 --> 00:07:51.000
and we did our job and there it is. Yeah,
129
00:07:51.199 --> 00:07:55.360
it's just it's just amazing how business owners are afraid
130
00:07:55.439 --> 00:08:00.399
to use that strategy, and it's an outstanding strategy you knows,
131
00:08:00.959 --> 00:08:04.199
the customers saying to themselves, I don't want to look
132
00:08:04.240 --> 00:08:08.199
foolish here, you know, or I don't want to have
133
00:08:08.279 --> 00:08:13.600
to explain to my spouse how I got taken. Yeah, okay,
134
00:08:15.519 --> 00:08:17.680
you know. So these are the things that are going
135
00:08:17.759 --> 00:08:19.959
through the mind of the customer. They want to make
136
00:08:20.040 --> 00:08:23.800
sure that they're not being taken and that uh, you
137
00:08:23.879 --> 00:08:26.079
know that the product is going to deliver what it's
138
00:08:26.319 --> 00:08:26.920
what it says it.
139
00:08:26.959 --> 00:08:30.720
Will deliver absolutely, So how do people reach out to
140
00:08:30.800 --> 00:08:33.600
you get more information on this and other things that
141
00:08:33.799 --> 00:08:36.399
you do to give them powerful business strategies.
142
00:08:36.960 --> 00:08:38.840
Well, what we do, Dean, we do something a little
143
00:08:38.879 --> 00:08:43.240
different than than most most companies. What we do is
144
00:08:43.320 --> 00:08:48.879
we we are always looking to update our book with
145
00:08:49.480 --> 00:08:52.200
you know, new and different ideas, and so what we
146
00:08:52.360 --> 00:08:55.360
do is it's called a book interview, and basically it's
147
00:08:55.399 --> 00:08:58.679
sixty minutes on Zoom, I present strategies for my book
148
00:08:58.799 --> 00:09:03.759
and then I asked the interviewe. I asked them, if
149
00:09:04.120 --> 00:09:06.159
is is someone that were to implement this strategy that
150
00:09:06.240 --> 00:09:08.919
I just presented, what impact would it have to a
151
00:09:09.000 --> 00:09:11.879
business in your industry? And then I documented for the book,
152
00:09:12.960 --> 00:09:15.559
uh and base and by the way, if I, if
153
00:09:15.600 --> 00:09:17.440
I like some of their quotes, I actually put the
154
00:09:17.519 --> 00:09:19.360
quote in the book along with their name and company
155
00:09:19.440 --> 00:09:21.600
name if they if they want that, and sometimes they
156
00:09:21.639 --> 00:09:25.399
are not. They want to be anonymous, but so I
157
00:09:26.440 --> 00:09:28.919
so it gives them a little exposure as well. But
158
00:09:29.080 --> 00:09:33.240
more importantly, they'll learn business strategies that their competition isn't doing.
159
00:09:33.960 --> 00:09:37.120
So uh by to ask for a book interview, just
160
00:09:37.200 --> 00:09:41.840
go to NeXTSTEP CFO dot net forward slash contact, fill
161
00:09:41.879 --> 00:09:45.000
out that contact form in the message section, write the
162
00:09:45.039 --> 00:09:47.759
word book interview, and I'll send you a calendar link
163
00:09:47.799 --> 00:09:49.200
to schedule. And as simple as that.
164
00:09:50.799 --> 00:09:53.759
Beautiful. I love it. Once again the wealth of knowledge
165
00:09:53.799 --> 00:09:58.440
that can help business people be successful and profitable. They
166
00:09:58.519 --> 00:10:00.279
need to make sure to tune in next this week.
167
00:10:00.360 --> 00:10:05.039
Also to the positively Pipemine's segment with you as our
168
00:10:05.159 --> 00:10:11.159
expert given some powerful business strategies. That next week we're
169
00:10:11.200 --> 00:10:14.919
going to talk about a cash collection strategy, So make
170
00:10:14.960 --> 00:10:18.519
sure to tune in and thanks Michael for once again
171
00:10:18.679 --> 00:10:20.240
being the expert that you are.
172
00:10:20.840 --> 00:10:24.840
Thank you to pleasure to be here, Thank you for
173
00:10:25.120 --> 00:10:32.360
listening to the adventures of pipemin I'm w for CUI Radio.
1
00:00:04.639 --> 00:00:11.320
2
00:00:11.560 --> 00:00:21.160
3
00:00:21.239 --> 00:00:23.879
4
00:00:24.079 --> 00:00:28.480
5
00:00:28.519 --> 00:00:32.600
6
00:00:32.759 --> 00:00:36.000
7
00:00:36.159 --> 00:00:36.560
8
00:00:36.719 --> 00:00:38.799
9
00:00:39.960 --> 00:00:42.679
10
00:00:43.679 --> 00:00:46.439
11
00:00:46.520 --> 00:00:50.240
12
00:00:50.280 --> 00:00:54.039
13
00:00:54.880 --> 00:00:57.719
14
00:00:57.799 --> 00:01:01.880
15
00:01:03.000 --> 00:01:08.439
16
00:01:08.519 --> 00:01:11.879
17
00:01:12.640 --> 00:01:18.000
18
00:01:18.120 --> 00:01:23.079
19
00:01:23.280 --> 00:01:26.239
20
00:01:26.319 --> 00:01:29.280
21
00:01:29.280 --> 00:01:32.840
22
00:01:33.159 --> 00:01:36.719
23
00:01:36.760 --> 00:01:39.159
24
00:01:39.200 --> 00:01:41.599
25
00:01:41.640 --> 00:01:45.439
26
00:01:46.760 --> 00:01:50.239
27
00:01:50.280 --> 00:01:54.040
28
00:01:54.200 --> 00:01:56.719
29
00:01:56.760 --> 00:01:58.560
30
00:01:58.640 --> 00:02:01.000
31
00:02:01.079 --> 00:02:03.400
32
00:02:03.519 --> 00:02:06.040
33
00:02:06.079 --> 00:02:08.800
34
00:02:08.879 --> 00:02:10.919
35
00:02:11.039 --> 00:02:12.560
36
00:02:12.639 --> 00:02:15.080
37
00:02:15.080 --> 00:02:19.759
38
00:02:19.840 --> 00:02:22.240
39
00:02:22.240 --> 00:02:24.719
40
00:02:24.879 --> 00:02:29.080
41
00:02:29.240 --> 00:02:33.759
42
00:02:33.879 --> 00:02:38.360
43
00:02:38.439 --> 00:02:40.439
44
00:02:40.439 --> 00:02:44.560
45
00:02:44.960 --> 00:02:49.039
46
00:02:49.120 --> 00:02:53.360
47
00:02:53.360 --> 00:02:56.960
48
00:02:57.120 --> 00:03:01.319
49
00:03:01.479 --> 00:03:07.000
50
00:03:07.159 --> 00:03:12.199
51
00:03:12.240 --> 00:03:14.759
52
00:03:14.800 --> 00:03:17.479
53
00:03:17.680 --> 00:03:21.199
54
00:03:21.319 --> 00:03:24.280
55
00:03:24.439 --> 00:03:29.039
56
00:03:29.199 --> 00:03:35.159
57
00:03:35.759 --> 00:03:38.240
58
00:03:38.319 --> 00:03:40.599
59
00:03:42.080 --> 00:03:47.680
60
00:03:47.800 --> 00:03:52.919
61
00:03:52.919 --> 00:03:58.199
62
00:03:58.280 --> 00:04:01.599
63
00:04:01.680 --> 00:04:05.639
64
00:04:07.120 --> 00:04:10.800
65
00:04:11.000 --> 00:04:13.759
66
00:04:13.840 --> 00:04:17.000
67
00:04:17.079 --> 00:04:24.439
68
00:04:24.879 --> 00:04:27.240
69
00:04:27.279 --> 00:04:29.759
70
00:04:30.040 --> 00:04:35.279
71
00:04:35.319 --> 00:04:38.800
72
00:04:39.240 --> 00:04:45.399
73
00:04:45.480 --> 00:04:50.040
74
00:04:50.160 --> 00:04:53.160
75
00:04:53.240 --> 00:04:58.319
76
00:04:59.079 --> 00:05:01.920
77
00:05:02.000 --> 00:05:04.879
78
00:05:05.000 --> 00:05:06.879
79
00:05:07.079 --> 00:05:10.920
80
00:05:10.959 --> 00:05:14.920
81
00:05:15.920 --> 00:05:19.759
82
00:05:19.879 --> 00:05:23.160
83
00:05:23.800 --> 00:05:26.839
84
00:05:26.920 --> 00:05:27.480
85
00:05:30.199 --> 00:05:30.240
86
00:05:30.920 --> 00:05:33.319
87
00:05:33.399 --> 00:05:35.079
88
00:05:35.160 --> 00:05:38.480
89
00:05:38.720 --> 00:05:41.399
90
00:05:42.079 --> 00:05:48.120
91
00:05:48.360 --> 00:05:50.800
92
00:05:50.920 --> 00:05:55.160
93
00:05:55.920 --> 00:05:58.879
94
00:05:58.959 --> 00:06:02.160
95
00:06:02.160 --> 00:06:05.319
96
00:06:05.600 --> 00:06:09.000
97
00:06:09.279 --> 00:06:09.720
98
00:06:09.879 --> 00:06:11.800
99
00:06:12.839 --> 00:06:14.800
100
00:06:14.920 --> 00:06:18.680
101
00:06:18.839 --> 00:06:20.800
102
00:06:21.040 --> 00:06:26.000
103
00:06:26.079 --> 00:06:31.680
104
00:06:31.800 --> 00:06:34.920
105
00:06:34.959 --> 00:06:37.439
106
00:06:37.519 --> 00:06:40.160
107
00:06:40.240 --> 00:06:41.800
108
00:06:42.480 --> 00:06:45.560
109
00:06:45.600 --> 00:06:50.000
110
00:06:50.199 --> 00:06:54.279
111
00:06:54.319 --> 00:06:57.800
112
00:06:57.959 --> 00:07:01.240
113
00:07:01.319 --> 00:07:02.240
114
00:07:02.879 --> 00:07:06.639
115
00:07:06.680 --> 00:07:09.879
116
00:07:10.000 --> 00:07:13.279
117
00:07:13.439 --> 00:07:17.480
118
00:07:17.519 --> 00:07:19.600
119
00:07:19.600 --> 00:07:21.439
120
00:07:21.480 --> 00:07:24.800
121
00:07:25.160 --> 00:07:27.720
122
00:07:28.439 --> 00:07:30.920
123
00:07:30.959 --> 00:07:33.240
124
00:07:33.560 --> 00:07:38.839
125
00:07:38.879 --> 00:07:41.879
126
00:07:41.959 --> 00:07:44.120
127
00:07:44.160 --> 00:07:47.160
128
00:07:47.639 --> 00:07:51.000
129
00:07:51.199 --> 00:07:55.360
130
00:07:55.439 --> 00:08:00.399
131
00:08:00.959 --> 00:08:04.199
132
00:08:04.240 --> 00:08:08.199
133
00:08:08.279 --> 00:08:13.600
134
00:08:15.519 --> 00:08:17.680
135
00:08:17.759 --> 00:08:19.959
136
00:08:20.040 --> 00:08:23.800
137
00:08:23.879 --> 00:08:26.079
138
00:08:26.319 --> 00:08:26.920
139
00:08:26.959 --> 00:08:30.720
140
00:08:30.800 --> 00:08:33.600
141
00:08:33.799 --> 00:08:36.399
142
00:08:36.960 --> 00:08:38.840
143
00:08:38.879 --> 00:08:43.240
144
00:08:43.320 --> 00:08:48.879
145
00:08:49.480 --> 00:08:52.200
146
00:08:52.360 --> 00:08:55.360
147
00:08:55.399 --> 00:08:58.679
148
00:08:58.799 --> 00:09:03.759
149
00:09:04.120 --> 00:09:06.159
150
00:09:06.240 --> 00:09:08.919
151
00:09:09.000 --> 00:09:11.879
152
00:09:12.960 --> 00:09:15.559
153
00:09:15.600 --> 00:09:17.440
154
00:09:17.519 --> 00:09:19.360
155
00:09:19.440 --> 00:09:21.600
156
00:09:21.639 --> 00:09:25.399
157
00:09:26.440 --> 00:09:28.919
158
00:09:29.080 --> 00:09:33.240
159
00:09:33.960 --> 00:09:37.120
160
00:09:37.200 --> 00:09:41.840
161
00:09:41.879 --> 00:09:45.000
162
00:09:45.039 --> 00:09:47.759
163
00:09:47.799 --> 00:09:49.200
164
00:09:50.799 --> 00:09:53.759
165
00:09:53.799 --> 00:09:58.440
166
00:09:58.519 --> 00:10:00.279
167
00:10:00.360 --> 00:10:05.039
168
00:10:05.159 --> 00:10:11.159
169
00:10:11.200 --> 00:10:14.919
170
00:10:14.960 --> 00:10:18.519
171
00:10:18.679 --> 00:10:20.240
172
00:10:20.840 --> 00:10:24.840
173
00:10:25.120 --> 00:10:32.360
