The Ultimate Playbook for Risk Reversal & Guarantees That Close Clients (Without Getting Burned)

Brian Hood (0:00)

This is the Six Figure Creative Podcast, Episode 362

Welcome to the Six Figure Creative Podcast, where our mission is to help you turn your creative passions into a stable, reliable income. If you're in audio, video, design, photography, or really any other creative field, and you just want to learn from other successful creatives, you're in the right place. Most people on Earth will never hire you, because obviously most people on Earth don't know you even exist yet. But even the people that do know you, most of those will still not hire you. And if you personally know very few people who actually need your services, then you have very limited options. At this point, if that's you, you basically just need to focus on top of funnel, like tofu, how to get more people to know that you even exist and that you have services that can be offered, duh, obvious. Here's the big problem with that. Once that becomes your option, and the best way to get new clients, which is like most freelancers I've ever seen, they don't have enough people in their network to keep them booked solid, the biggest issue is now you're trying to get strangers, complete strangers, to hire you. And at that point, that's when things start falling apart, because strangers don't give a damn about you. They're skeptical, they usually have other options, and at this point, you're now fighting a major uphill battle. If we're being honest for a second, most people don't care about how passionate you are, they don't care about how bad you want the gig, or how long you've been working at this. What they do care about, what's actually stopping them from saying yes to you versus someone else is risk. That is it. That's usually the big thing, other than obviously your portfolio. Your portfolio, you have to be good enough, but there's tons of people out there who are good enough, that are just as good at you, or better than you in some cases. And there's a lot of people out there who understand this risk thing, and they're worse than you, and they're getting gigs because they understand risk is the thing. Risk is the key. When you're trying to get strangers to hire you, risk is it. In the back of their heads, they're thinking, is this a waste of money? Is this a waste of time? Is this person going to give me what I actually want? What's in the vision in my head for this project? What if this person goes off the derails and derails the entire project, and now we're behind schedule for this entire launch we're trying to do? This episode is about turning that fear into your biggest sales asset. But right now, it's likely a liability because you're probably like most other freelancers and you were doing nothing about risk. You don't address it at all. You try to pretend like it doesn't exist. You assume your testimonials. You assume your portfolio is good enough. If my work speaks for itself, I have great 30 page testimonials that no one's ever going to read. Or maybe if my proposals are fancy enough, I can get more people to say yes to me. But here's the mistake. You're trying to get a complete stranger or even somebody who doesn't know you well. It can even be somebody in your network, somebody that was referred to you, they don't know you well. You're trying to get them to say yes, trying to get them to take a leap with you without a parachute, with no guarantee that the stuff that you're going to do is going to be what they want. No reassurances, no sort of what if safety net, if things don't work out the way they want it. And yes, you can close people without worrying about this stuff, but only the hottest, warmest referrals. And that's the biggest problem, because most freelancers only ever get the hottest, warmest referrals from people that already know, like and trust them. This is also why you're never booked solid. So if you want to stay booked solid, you've got to get strangers to hire you. And if you want to get strangers to hire you, you have to deal with risk, because if you don't, here's what happens. They'll start ghosting you. You'll hear a lot of, let's circle back on this later on. I'll follow up with you. Let me think about it. And you never see them again. And the worst part is they did want to work with you. They had just enough sway to keep them from moving forward with you. For them to say, this is too risky. Something's just not right with this. And the worst part of all this is that they're going to go hire somebody for this gig. And it's likely somebody that they feel more comfortable with, even if they're worse at the service than you are. And if you think about it, every time you've made a big purchase in your life, you're looking for different ways to de-risk it for yourself. When you buy a car, you want to warranty. When you buy a new range or a new stove, new oven, which I just bought, you want to warranty with that as well. You want some sort of assurances that if things go sideways, if shit hits the fan, and it doesn't work out the way it's supposed to, that you're going to get your money back, or it's going to get fixed for you, that you're not the one stuck holding the bag if it all falls flat. So why would you expect clients to act any differently? They're spending thousands, sometimes tens of thousands, sometimes up to a hundred thousand or more on a project with you, with no assurances that this is going to work out the way they want it to. When you're charging what is basically the price of a used or a new car, and you're not willing to put a guarantee behind that, what does that say about you? What does that say about your service? If someone tried to sell me a brand new car, if there was a manufacturer out there that sold brand new cars and had no warranty on it, it would tell you that they don't believe in their own product enough to put a guarantee behind it. And that's where risk reversal comes in. For your services, you are saying, I get it, you're about to spend 10 grand with me. I am willing to take on some of this risk myself so that you don't have to worry about it at all, because I'm so confident this is such a great fit for both of us, I'm willing to do that. It is a way to build trust, and trust is what you need in order to get clients. People do not work with people they don't know, like, and trust, and part of the sales and marketing process is getting them further from that complete stranger down to the point where they do know, like, and trust you, until you can have enough trust built to get a yes to get paid, so you can have that long-term client relationship where they'll actually refer clients to you. And if you do this right, it's gonna help you stand out, it's gonna help you get more strangers to say yes, it's gonna help you get more of those maybes into hell's yeses, and it's gonna speed up your sales process so it doesn't take so long to go from someone on first contact who's interested in working with you to weeks or months later finally saying, yes, I can go forward with this because I've done enough due diligence. That is the topic of today's podcast. If you've never heard of this show before, if this is your first time here, you're brand new. Hi, I'm Brian Hood. This is the 6 Figure Creative podcast. We've been around for 362 episodes now. It's a lot of episodes. This podcast takes tons of influences from a bunch of different industries, a bunch of different sub niches, from web designers to graphic designers to brand designers to music producers to mix engineers to master engineers to videographers to composers to colorists. And that's just the freelancers that we work with. And we also take a ton of influence from the SaaS industry and from the internet marketing world and from everywhere else that I can find some sort of influences to bring forward to freelancers for you to utilize as a tool in order to make your business better. We've got 362 episodes for you to go through and see what we've got to offer when it comes to giving you ideas to make your business better without selling yourself. And one of those amazing ideas is the idea of risk reversal. This is one of the most challenging things for people to get their brains wrapped around when it comes to trying to implement for themselves. Because when you think risk reversal, you now think all the risks on me as a freelancer. And I'm not willing to take on all that risk because there's a bunch of unknowns that I don't know about. And there's a bunch of stuff the client can do to make the project go bad. And today we're going to talk about all this. I want this to be a definitive guide for risk reversal and guarantees for freelancers. Because at this point, we currently, for the coaching program that I run is the main business for 6 Figure Creative, we have three guarantees for risk reversal for our own clients. And then we have 250 clients at this point. And I've helped most of them. At this point, some of them are still earlier in the stages. Most of them implement some sort of guarantee or risk reversal in their businesses. So I've seen this play out in a bunch of different permutations, not to mention the guarantees for other businesses that I have. So let me just explain risk reversal really quick. Ask yourself this. What the hell is actually at risk when somebody hires you? What's at risk for them first? Every niche is different, every industry is different. For some, they're risking money. For others, the biggest risk isn't actually money. It's time instead of money. It could also be creative vision. Some people are just more focused on the craft that they're doing. So in B2B, this is not usually the case. It's usually in something like music production, where music producer is working very closely with a musician or an artist or a band. And in that world, obviously, money is at risk and the bands feel that. But the true thing is, is it going to match the vision the artist has for their own work? And yes, a lot of bands can be money conscious, but they are actually willing to pay more for something they are confident about actually matching their vision, something they're confident they're going to be happy with. So ultimately, risk reversal is coming up with a persuasive way of de-risking it for the client. And like I said before, this is hugely important if you start going after colder and colder people who don't already know, like, and trust you. Because most people on earth, they don't know you, and when they learn that you exist, they don't care about you. They have no idea who you are, they don't care about you, and you have to get a message across really quickly in a way that makes them say, hmm, interesting. We'll talk about that more in this episode. So let's talk about the types of risk reversals that work. I'm thinking specifically for freelancers. There's other types that are out there. This goes without saying, if this works for freelancers, also works for agencies and a lot of other different types of businesses. But the first and most obvious one is refund. If there's hard money risk, a refund guarantee is something that obviously works. And by the way, just because I say these work doesn't mean I'm telling you to use these. I want to give you the full picture of what all works. And then this episode helped you kind of shape together your own guarantee. Because again, most freelancers, they hear refund and they're like, hell no, I've just did all these services. I'm not about to refund somebody no matter what. And I'm not telling you to. You don't have to. And there's ways to offer a refund guarantee without tying up a bunch of your time. We'll talk about that in this episode as well. So refund is good for money risk. Work for free is good for happiness risk. That's where you're saying something like, if you're not happy with the way this turns out, I'll work for free until you're happy. Another way of positioning that is something like unlimited revisions. The third type of risk reversal that works well is the drug dealer method. The first one's free, right? That de-risks a couple of things. It de-risks the risk of money as well, because they're getting a taste of it without paying for it. Therefore they know what it's going to be like when they do pay for it. So the risk is gone there. So they're willing to pay for it if they actually liked it. The second type of risk it de-risks against is happiness. They've tasted a sample or they've tasted some of it or a version of it. They now know that they're going to be happy with whatever they're going to get when they start paying for it. Another guarantee that works really well is pay only if you're happy. This works, again, in some niches, and this is horrible for other niches. I'll talk through again, putting these all together into a cohesive kind of risk reversal guarantee for your own business in a second, but pay only if you're happy. So like when you approve something, then you pay. Another one is we deliver on time or buy X date or you pay nothing. That de-risks time and money as well, because you're obviously getting your money back if they don't do it on time. But the big thing there is you're de-risking the time piece. If somebody's really stressed out about making sure everything's on schedule. One example is I've seen in B2B for freelancers, you're a small cog in a larger project. So you might charge $10,000, $15,000 for a project, but the whole project is maybe spending $200,000, $300,000, $500,000, a million dollars for that project. And if your one piece isn't delivered on time, they don't care about the $10,000, $15,000 I spent you. That's not the thing they care about. They care about it being delivered on time so that the rest of the project can go smoothly. So when you put the money back guarantee on the time piece, you're basically saying, I'm so confident that I can deliver this on time, that I'm willing to put my money where my mouth is. And because of that, you can also be confident that we're going to get this done on time. And the last one I want to talk about for this episode is a really high power guarantee, and that is pay for results, so pay after result even. This works really well in measurable performance type work. Like if you're a web designer who does conversion-focused websites, you could say, if your website doesn't convert at least X percent, you don't pay, or you only pay after it converts at X percent. That's the even better guarantee. No matter what guarantee you choose, what matters just as much as that guarantee is how you frame it. And what I mean is this. We'll just take the refund guarantee. If you're not happy with how this turns out, I'll give you a full refund. Why are you offering this guarantee? Think through it. Why are you offering this guarantee? A lot of freelancers have this fear that they're going to come across as weak or desperate. They're so desperate, they're willing to work for free just to get gigs, right? And that's not at all what it is. If that's what it is, it can come across as weak and desperate. But if it's properly framed, meaning you're talking about it in a way that conveys the correct meaning, it could be way more powerful. You're basically saying, I'm so confident that you'll love this, that I'm willing to put my money where my mouth is. And you could even position it against saying, most freelancers are not even close to willing to do this because they can't confidently say that they can get something that you're happy with. I'm not telling you to go out there and call out other freelancers and say, my guarantee is better than theirs and I'm better than them. That's not what I'm saying. But I'm just saying, if you position this correctly, it can come from a place of power and not a place of weak neediness. Another great way you can frame this is, I never want my clients to be unhappy. And that's why I'm willing to offer a full refund if you're unhappy for any reason. Or, and that's why I'm willing to work for free until you are happy, something like that. But all this to say, I want you to think about the psychology of this before you start diving in and putting together a guarantee or offers. What is the psychology behind what you're doing? What's in it for them? What makes this an easier yes for them? Or better yet, a no-brainer yes for them. And then think through, why am I offering this? Or why are you offering this? And there's usually two reasons. There's the internal reason. It could be that you're trying to reduce lead costs. You're trying to increase your close rates. You're just trying to get more clients. That's the internal reason. And there's the external reason of why you're doing this. It's like, you're confident you can give them what they want. You don't want to have unhappy clients. You're so confident you can get this done on time. You know you can get the result of the client wants, et cetera. But I want to talk you through my favorite way to do guarantees risk reversals for pretty much every client we work with. This is how we do it ourselves. And I just call them internally, we call these milestone guarantees. I'll talk through in our own business how this looks, and then I'll tie it into some of our own clients' businesses so you can kind of see in different areas what this looks like. But a milestone guarantee is essentially this. It's where you say, I guarantee this thing, and it could be something that's like a full refund, right? We actually have a full refund guarantee on our coaching offer. But we can't coach somebody for a full year and then say, hey, we'll refund you. We put a milestone on it. And a milestone is basically saying, once we cross this milestone, you're no longer eligible for that guarantee. And that de-risks it for both parties. It de-risks it for the client because they get to at least that milestone and they can decide do they want to move forward or not. And it de-risks it for us because once they get past that point, we don't have to worry about somebody backing out at that point. And so just to give you a better picture here, for our coaching program, we call it your continuous client's marketing roadmap. When we bring a client on, we create their entire marketing roadmap, we pitch it to them, and then at that point, they decide do they want to move forward or not. If they don't want to move forward, that's where the refund comes in. I looked at the numbers before this episode. We have had 66 in a row approved since our last rejected roadmap. But we have a ton of our clients saying that this was the thing that got them in the program in the first place. Because there's so much uncertainty when you join a program like this, especially if you've joined one before and you've seen the garbage that is out there. And just to give you some more raw numbers, of the last 200 roadmaps we sent out, 194 of them have been approved. So this is insanely effective for us. And it also de-risks it for us and aligns our incentives. So I'll tell you how this guarantee works and why it works so well. It's because the person, you, the potential client or the client who just joined, they're getting to see the full picture of all the stuff we're going to do with them, specifically for their business, pitch to them from an individual, talking through them for over an hour, or sometimes, right, an hour, sometimes a little less, sometimes a little more, talking through every single detail of that plan so that they fully understand all the stuff that needs to be done in their business before we're done. And the clients get excited about this because they finally see, oh, this is what I am missing. And so that's why they always approve it, and very rarely do they reject it. And it's easy for the clients to say yes to, because they're not locked in and working with us until after that. And even after they approve it, we're still just a month-to-month coaching program. So that's another kind of risk thing, is like your payment structure, not having contracts in place. We do risk it a lot by just putting a month-to-month thing in place. But anyways, back to you. So let's talk about how this plays out in other niches. Milestones, again, are wonderful. So for brand design, I was looking through our community posts and I found a few different conversations about guarantees in different niches. One was brand design. One of our clients, she has a walk-away guarantee. The way she basically does it is, she presents a strategy to them and they can walk away and they don't have to pay anything. Her name's Alina. I'm just gonna read the post here. She says, my process is pretty standard. I do a discovery call, then I create the strategy for them, then I do all the design work. I give my clients a strategy deck slash mood board during that middle phase, that strategy phase, and I decided to try offering that same guarantee that got me to sign up for this coaching program, which is basically, if you don't like your strategy deck, I'll work with you until you're happy with it, or I'll give back your deposit if you don't want to move forward. And then she just went on to say, this is self-serving here for me, but she says the roadmap guarantee is actually what sold me into this program, so I figured, why not try it myself? But I'm curious, is anyone else here doing something similar? Would you recommend doing something else in the design space? And then we had another client, Allie, respond. She says, I do a walk away guarantee after the brand design strategy portion. For me, I do onboarding slash questionnaire, then the brand strategy, then move to the mood board. She says, I discuss a brand strategy presentation on a discovery call, so the guarantee comes into play in that second step. So in other words, if they don't like the strategy we discuss, then we can get their money back and walk away. So that exact same type of guarantee that I'm doing works really well in the design space, this brand design specifically, but you could do the same thing in web design. You could say after the wire frame or before we move forward into deep work, the hard stuff, to actually doing the work, find some sort of intermediate step to the milestone that says once we get to this point, you should have a really good idea of what it's like to work with me and what we're gonna work on together. And it's preferably something that they're really excited about. They're like, oh, I see the vision of this. I see what we're gonna work on together. I'm so excited. Boom, approved, signed off. We use a proposal process where somebody actually signs it and says they approve it in our process. I recommend you do something similar where it's just basically them planning the flag in the ground saying, yes, I approve. I'm gonna move forward with you. I'm excited to move forward.