Risk-Reversal Marketing
Matthew Smith is so sure his $50 work shoes will prevent on-the-job injuries that he’ll pay up to $5,000 in “medical expenses and workers’ comp costs” if anyone gets hurt, reports Dee Gill in Inc. (Sep 05). That may sound a little crazy, but Matthew’s guarantee actually has been the key to his company’s success over the past ten years. What Matthew figured out was that even though employers didn’t care much where their employees bought their work shoes, they cared deeply “about preventing injuries and workers’ compensation claims.”
Believing that his shoe really did prevent slip injuries, Matthew “began promising managers that if a worker slipped while wearing his shoes,” he’d “help pay the claim” — up to $5,000, provided the shoes were purchased via a payroll deduction plan. It’s a concept some call “‘risk-reversal marketing,’ and it’s a lot different from simply refunding the purchase price. The idea is to think about what a potential customer’s biggest fear is about doing business with you, and assume some of that risk yourself.”
Ten years later, Matthew’s company, Shoes For Crews counts “nine of the 10 largest restaurant chains in the country” as its customers, and is a $100 million company with 160 employees.
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