Do You Know Your Product’s Risk-Reward Ratio?

Risk reward ratio as shown by the scales of justice

This post is one of the resources that complements the awesome new manifesto from Danny Iny (The Naked Marketing Manifesto). Get your free copy at:

Now, read on…


We’ve all been there.

We stare at the sales page. We read every bullet. Analyze each component. Each bonus. Each benefit. Each testimonial. The guarantees. The refund policy.

We look at the promise: “This will ABSOLUTELY change you life!”


It’s the same whether it’s an Internet product, a gym membership, a new car, a consulting deal, or a new piece of software. Replace the sales page above with a brochure, a project proposal, the contract, or the technical specs. We’ll look at the horsepower, features and color options, or the Pilates class list, number of elliptical bikes and spin instructor’s credentials. Or maybe the case studies of similar successful projects or how this software tool will transform our business. Yes, we’ll look at all of this marketing collateral in great detail before buying.

So what goes on during these moments?

It’s the Risk vs. Reward analysis that we run in our heads

Let’s run through an example. Let’s say you’re buying a high-end business coaching program.

What are the risks that…

  • It won’t be effective for our business
  • I won’t have enough support to actually implement the recommendations
  • I won’t have enough access to the head coach (the guru) – instead I’ll be working with less qualified assistants
  • I can’t return it or it will be hard to return (they’ll twist my arm not to do it)
  • The information will be too basic for me – something I already know
  • It will be too advanced for me. So far above my head that it won’t be useful
  • I’ll forget that I bought the product and will have wasted the money
  • The coach sounds great now, but the nice guy act will end as soon as I buy
  • This is a fly-by-night operation
  • I’m the only sucker who buys this stuff
  • There’s not going to be enough in the program to make it worth all the money I’m shelling out

Just so it’s not all about online marketing, let me give a different example – membership to a new gym.

If you’re going to join a new gym, here are some of the risks that you might consider…

  • I’ll never get on the good equipment at the times I can come
  • The best classes are always full or at awkward times
  • I won’t go because the gym’s just a little too far away 😉
  • I’ll be locked into a long contract that I can’t get out of
  • The steam room will always be on the fritz
  • The place will always be dirty
  • The best trainers will be too expensive or unavailable when I need them

You get the point. Note that some of the risks involve our own motivation or follow-through. We are often our own worst enemies for our success.

All Risk and No Reward?

Obviously if it was all risk and no reward, then no one would part with their hard-earned money and the economy would grind to a halt.

So what are the rewards?

The Over-arching Vision of Success

At the end of the day, the ultimate reward needs to be a vision of what the person, company or family can achieve by purchasing this product, service or membership.

  • How this Internet product will truly help you generate more leads (for example)
  • How this car will make you feel powerful, yet sophisticated
  • How this (other) car will make your family life a breeze with the flexibility to carpool the kids to soccer one day, go on a beach vacation the next, and go on a ski trip the day after that
  • How the gym membership with all the high tech equipment and top-notch instruction will reshape your body and self-image
  • How this consulting project will take away the pain of a business in disarray and reform you into a lean, mean profit-generation machine

This is the vision that people want to believe (and that your product should be able to deliver).

What About The Risks?

Remember all of those nagging doubts (in the form of “risks)? You need some serious firepower to overcome all of those. The more you can load up the benefits side of the equation, the more likely you are to be able to close the deal. The more we can minimize the risks, the more likely the deal is to go through.

Let’s go over the risks we covered before and talk about ways that they can be negated.

  • It won’t be effective for our business – Negate: Run a Q&A session and address these types of questions head-on.
  • I won’t have enough support to actually implement the recommendations – Negate: Describe the high levels of support or include testimonials that praise the high levels of support.
  • I won’t have enough access to the head coach (the guru) – instead I’ll be working with less qualified assistants – Negate: Specify how much time and in what forums the “guru” will be available to work with buyers.
  • I can’t return it or it will be hard to return – Negate: Spell out your guarantee, return policy and process very clearly.
  • The information will be too basic for me – something I already know – Negate: Go into detail about the complex items that are covered.
  • It will be too advanced for me. So far above my head that it won’t be useful – Negate: Tell (true) success stories of people going from newbie to successful.
  • I’ll forget that I bought the product and have wasted the money – Negate: Communicate regularly with the members via email so they are reminded to come back to the program. Or ask people to report back on their progress regularly.
  • The coach sounds great now, but the nice guy act will end as soon as I buy – Negate: Show the coach as he/she really is in an authentic way so potential clients get a true feel for his/her character.
  • This is a fly-by-night operation – Negate: Show evidence of longevity and brand names that you’ve worked with.
  • I’m the only sucker who buys this stuff – Negate: Get social proof of past and current buyers. If you can announce actual buyers as they buy, that’s great social proof.
  • There’s not going to be enough in the program to make it worth all the money I’m shelling out – Negate: Put in some amazing bonuses. Load up the value of the program.

Other Rewards?

There are other Rewards (Benefits) that people look for or will appreciate hearing about. Here are some common ones:

  • It will speed up your progress
  • You will learn things you can’t discover on your own
  • You will learn about new tools or systems
  • You’ll get access to checklists or templates to organize your work and make your life easier
  • You’ll make new connections via a forum or network
  • The program leaders will help showcase or publicize your site, project or products
  • You will get useful feedback or input
  • You’ll have the opportunity to establish a relationship with the program leaders
  • You’ll have the opportunity to get introduced to influencers or decision-makers

Do You Know Your Potential Customer’s Risk/Reward Thought Process?

You can see how important it is to understand the thought process that potential clients go through before purchasing your products or services. You need this to know your product or service’s risk-reward ratio (in their eyes).

Are there ways you can increase the Rewards or minimize the Risks for your prospects?

Let me know what you think in the comments.

Also, what other Risks often need to be addressed? What are some Rewards that you’ve highlighted or added in to your products to help increase your sales?


Don’t forget to grab your copy of the Naked Marketing Manifesto.

If you liked this post, please vote it up in the list below (look for the “Scales of Justice” picture). Then, check out the other Naked Marketing  resources after that!

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Ryan Hanley


Really great article and timely for me as I begin to work on Industry specific workshop. I literally I’m reading through your list answering my own questions about the course.

Awesome resource!!

Thank you,

Ryan H.


Hi Ryan – perfect. Yes, that’s a great way to full-proof your workshop. Address each point one-by-one and you should have better results. I’m glad I was able to help!

Rebecca Livermore

This is a timely post for me, Tom, because I’m just about to branch out into offering some products, and I certainly need to keep these things in mind.

Tom Treanor

Hi Rebecca,

I’m glad I could help. Good luck with your new products and thanks for the comment!


Enjoyed and sharedTom, counteracting the risks and objections before a person has them in their own head, smart moves.

Even on giveaways and free information always a good idea to carry out the same process and checks. Oh, and adding real testimonials, they even don’t have to be all singing and praise, I read a great testimonial once that explained where the person struggled with a program and what it didn’t do (and of course what it did!), honest and real. Dawn

Tom Treanor

Dawn, I agree. This same process should be taken for free products as well because if it’s not compelling enough, even at “free” (possibly in exchange for an email), the offer might not push them over the edge. Thanks for stopping by!

Gemma Thompson

Hi Tom,
Excellent article, I really appreciate the emphasis on trying to step into your customers shoes and understand what they feel the risks are. A few weeks ago I asked a specific question on twitter asking people what put them off using a social media consultant, 2 main answers came back, first that they didn’t know what they would learn, and second that they thought it would be too expensive.
Knowing that helps me a lot … And hopefully will help them a lot too!
Looking forward to reading more like this 🙂

Tom Treanor

That’s great insight. Those make sense. The other thing I’ve heard is – what will I get? I think putting ourselves in the client’s shoes early and often is so important.

Peter Sandeen

Hi Tom, Great article 🙂 The risks/objections are always the most difficult things to overcome; at least I find conveying the value easier than that. I’d advice people to list all the objections they can imagine (before trying to sell anything) and find ways to overcome everyone of those objections. It’s not enough to just think, “They’ll probably think this objection… I don’t know how I can do anything about that, so I’ll just hope they’ll get over it…” One of the best ways to overcoming objections is turning them into benefits. In other words, talk about a benefit that’s… Read more »

Tom Treanor

Peter. I like your point about listing out every objection and truly tackling each (in advance) to improve sales conversion rates. Nice point.

Timo Kiander

Very nice!

I think that this post helps to figure out what is going on inside potential customer’s head when making a buying decision (I can definitely recognize these thought pattern in myself too 🙂

Just proves the point that there are many other factors that effect to the final decision – not just price!


Tom Treanor

Great point. We sometimes spend so much time agonizing over price but really there are so many other factors. Thanks for adding that point!

Jeanne Pi

This is a great list of the top risks/objections most customers have and how to respond to them. However, there are some objections that you simply can’t anticipate. Coming from the world of apps, we send out beta versions to get user feedback and work out the bugs. I think many people make the mistake of not testing their offer before a big launch. The solution is to have a soft launch where you can gather information from a small group of customers and identify risk reversal points that are more specific to your product/service. Couple that with the list… Read more »

Annika Martins

Tom, this is one of the most valuable posts I’ve read on crafting a sales page. Excellent job. To expand on your q&a idea to negate any concerns that the product might not be effective: I’ve found tacking this onto a free webinar/call is also a good way to attract new people who’ve never seen the sales page before but would be interested in the content. So you’re addressing the q’s of already interested parties and continuing to bring in new people with the webinar/tele-class content.

Steve Baines

This is great Tom. So often marketers focus on the Rewards of the offer and pay not attention to the Risks. If they start with the Risks, and figure out how to counter each one, they are far more likely to be successful. At the end of the day it’s not about what the product is – it’s how the product benefits me. If that benefit is a solution to a problem (or overcomes a risk of entry) you are golden!

Thanks for such a comprehensive post!

Eric T. Wagner

Great content Tom…. (as usual though. 🙂

Like the guy putting a peephole in the front door — doesn’t really need a drill; just needs to make a hole, right?

Ah, but what he really needs is to get his wife to stop nagging him about getting the peephole put in ’cause she’s afraid of not knowing who’s knocking…

So sell him the vision of a good life with no nagging wife, yes?…. 🙂

Tom Treanor

Thanks Sylvia. I appreciate the comment!

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