Guest post by Eric Graham

Editor’s Note: Eric Graham is a friend and I asked him for reprint rights to this article. It is the perfect followup to last week’s article on making an irresistible offer.

Want the formula for more sales? 💵

Here it is…

🧪 PV > PR = Sale

(Read on to find out what that means…)

🛩 As a pilot and aircraft owner, one of the most important responsibilities I have is managing and reducing the RISK for myself and my passengers.

The same principles apply in business and marketing…

One of the biggest barriers selling more of your products and services is the RISK involved on the part of your buyer.

Think about it…

Particularly if this is their first purchase from you…

Giving their credit card information and hard-earned money to a person or company they have never done business with before is a risky proposition in their mind.

They come into the transaction with an inherent level of mistrust, fear, and skepticism.

And the higher the price of your product or service, the greater the level of perceived risk in your potential buyer’s mind.

This is why $7 “Trip Wire” (personally dislike that term) or “Free Plus Shipping” offers are so popular at the front end of many funnels.

The low price point reduces the perceived risk in the minds of your buyers.

They say to themselves, “If I get ripped-off, so what? It’s only $7!”

The perceived value outweighs the perceived risk.

Your prospects WILL NOT BUY until the Perceived Value (PV) outweighs the Perceived Risk (PR). Click To Tweet

In fact, your prospects WILL NOT BUY until the “Perceived Value” (PV) outweighs the “Perceived Risk” (PR).

It is a simple and reliable formula.

PV > PR = Sale
PV < PR = No Sale

It is predictable and binary.

And it works EVERY TIME!

As long as the perceived risk of taking you up on your offer is lower than the perceived value, they will buy. Period.

And it’s often NOT the loss of the money that is the true “risk” in the transaction.

For many, if not most, prospects…

It is the risk of looking or feeling stupid that is the REAL psychological risk in most offers.

Nobody wants to feel or look stupid…

(That’s a big reason why “IQ Test Offers” are so powerful!)

Money can be replaced…

Loss of STATUS (or self-confidence) on the other hand, is a MUCH bigger “cost” than the loss of a little (or even a lot) of cash.

So, with this in mind, what can we as marketers do to reduce or reverse the perceived (and actual) risk in the offers we make?

There are 2 main ways we can do this…

The first one should be simple and obvious to anyone who is marketing with integrity.

(However, just a quick look online at some of the scammy, spammy offers being made it is apparently not that “obvious”.)

1st Way to Reduce or Reverse the Risk is…

Actually, DELIVER more REAL (not just “perceived”) value than you are charging.

Make your offer and the delivery of it SO GOOD that the real risk to the prospect is what they will lose if they DON’T buy.

Stack the value proposition so far in the favor of your buyer it becomes what I call an “IQ Test” offer.

Now the SECOND way to reverse the risk in buying from you is…

Have a KILLER Guarantee!

Craft a guarantee so strong, it transfers the risk in the transaction from the shoulders of your buyer, onto YOUR shoulders as the seller.

These are NOT the weak, standard “Money Back” or “100% Satisfaction” guarantees you see most people using.

Satisfaction is EXPECTED! It shouldn’t be something that you have to guarantee.

Your customers are not buying for “satisfaction”.

They are buying from you for RESULTS!

The best guarantees should SCARE you a bit as a seller.

You should be a bit worried that people are going to abuse the guarantee and rip YOU off!

And guess what? Some WILL!

However, I can reassure you (in most markets) the small percentage of dishonest, low integrity people who will abuse your guarantee…

Will be MORE than overcome by the significantly higher conversion rates you will have among the honest (but still skeptical) people who do take you up on your offer.

The only 2 scenarios where I have seen a killer guarantee get abused to the point it impacted profitability is when marketers either ignored rule #1:

Actually, DELIVER more REAL (not just “perceived”) value than you are charging.

Or… They were operating in a market (or marketing in a way) that attracts low-integrity, abusive buyers.

As most people who have been following me for any length of time know, I am a FANATICAL TESTER…

I’ve personally run over 20,000 split tests, in nearly every market or niche imaginable.

And guarantees are one area I’ve done a TON of testing.

In nearly every case, adding a strong guarantee has increased conversion rates.

However, a few of the more surprising things I’ve discovered over the years, testing guarantees are…

Increasing the guarantee LENGTH in most cases, not only increases conversion rates, but it also frequently REDUCES refunds! Click To Tweet

Increasing the guarantee LENGTH in most cases, not only increases conversion rates, but it also frequently REDUCES refunds!

Yes… You read that right.

A longer guarantee window, can actually LOWER the number of refund requests you get.

(Particularly in e-commerce or selling physical goods.)

At first, this data seemed counter-intuitive to me.

You would think that going from a 14-day return window to a 90-day window would cause you to get MORE refunds, not less.

However, in test after test, I saw the same data…

Longer guarantee = Lower refunds

But it took me a while to figure out WHY!

The reason (at least my theory) is…

When you only give somebody 7 or 14 or even 30 days to decide to keep or return/refund your product, they often have to make the decision before they even really use or try the product.

They see that they only have a day or two left, realize they haven’t used the “thing” they bought yet, and so they just make a snap decision to ask for a refund.

However, when you give them 60 days, 90 days or even a full year to decide, it takes the pressure off them making the keep/refund decision, and they often procrastinate returning or asking for a refund.

They then either forget about it, or often with LONG guarantees like a 1-year or Lifetime, they actually feel embarrassed or silly asking for their money back a year after buying something.

(Disclaimer: Check with your merchant account to see what the maximum refund window they allow. Often, they get nervous if you offer more than 90-days.)

The only area I’ve seen longer guarantees cause slightly elevated refunds is in higher-ticket offers (typically $2k+).

There are a few dishonest, low-integrity people who look at a guarantee on a high-ticket offer a bit like a “savings account”.

If one month they are short on cash, and getting desperate to make rent…

They start “brainstorming” ways to raise some quick cash and remember that they can ask for a refund and basically “steal” the money back from you.

However, as frustrating as those isolated cases can be, the boost in response still makes a longer-guarantee worth it in most situations.

A strong guarantee assures prospects that you believe in the quality and effectiveness of what you are offering.

One of my core teachings is, “Persuasion is a transfer of BELIEF and EMOTION which leads another person to take the ACTION you desire.”

Of course, in order to transfer the belief in your product or service, you need to first HAVE a deep belief in its power to actually add value to your buyer’s lives.

One of the most effective ways to transfer that belief is through your guarantee.

You want your guarantee to be so strong that it injects the thought into your reader/viewer’s internal mental dialog, “Wow… This person REALLY believes in and backs up the effectiveness of what they are selling!”

Besides testing LONGER guarantee windows, I suggest testing what I call “Giving Your Guarantee’s TEETH”.

What I mean by that is…

Make a “better than money back” guarantee.

A guarantee so strong that if your product or service DOESN’T deliver the promised value, not only do they get their money back, they get something extra.

These can be “double your money back” guarantees…

Return the product, but “keep the bonuses” guarantees…

If you don’t get “X”, I’ll give you “Y” guarantees…

You don’t pay me until I get you “X Result” guarantees…

The ways you can give your guarantees “teeth” is limited only by your imagination (and ability to DELIVER on your promises.)

The key is, to make it so strong that if you, your product or your service doesn’t work, the guarantee will “bite you in the backside”!

(Hence the “teeth” part!) 😉

For example, in a recent offer I made, my guarantee was:


Because I’ve NEVER found a single webinar or VSL where I couldn’t improve sales or beat the “control”, I’m so confident in the absolute TRANSFORMATION that will happen in your sales and profitability I’m going to give you a true “IQ Test” guarantee…

I’m putting MY MONEY (and more valuable to me MY TIME) where my mouth is…

When you grab one of the 4 open spots, I absolutely GUARANTEE my recommendations will boost your sales by a MINIMUM of 50% or not only will I give you 100% of your money back, I’ll cut you a check for an additional $1,000 out of my own pocket for wasting your time!

So basically, the ONLY way you won’t make more money, is if you don’t invest in transforming your funnel today.


How’s that for “teeth”? 😉


If you don’t have enough faith in the ability of your product or service to deliver the promised results for you buyers… that you would be comfortable offering a strong risk reversal with real teeth in it, then you need to go back and improve your product or service.

Of course, to protect from abuse of the guarantee you CAN make it contingent on them actually proving that they followed through and used the product or service.

However, the important part is doing everything you can to move as much (if not all) of the risk in the transaction from the buyer’s shoulders, onto YOUR shoulders.

So, go ahead and test giving your guarantee some results based TEETH and see what happens.

See ya at the TOP! 🏔

Eric Graham is an addict…He’s addicted to learning, adventure, building businesses (my own and my clients) and creating lasting value. His mission is to help you attract more clients, make more money, be more productive, and experience more joy, happiness and passion in your life. He can be reached at http://EricGraham.org

Did you find this article useful or learn anything? If so, I’d love some feedback about what you thought.