# Guarantees as Risk Reversal (4 Types)

> You sell against inaction and risk, not against competitors: a guarantee shifts risk from the first-time buyer to the vendor, who knows their delivery a hundred times over. Four types, unconditional, conditional, anti-guarantee, performance-linked, can be used precisely and in combination.

- Canonical URL: https://www.convios.com/en/methods/guarantees-risk-reversal
- Language version: https://www.convios.com/de/methodik/garantien-risk-reversal
- Status: Externally proven
- Method library: https://www.convios.com/en/methods — Markdown: https://www.convios.com/en/methods.md

## Problem

Your prospects believe in the value but still do not buy, the perceived risk of a first purchase blocks the decision. Especially with complex products, the buyer can judge the probability of success far less well than the vendor. Without risk reversal you lose deals to the safest alternative: doing nothing.

## Approach

1. Choose the fitting guarantee type: unconditional (money back, strongest form), conditional (conditions = the behaviors of successful customers), anti-guarantee (deliberately none, assertively reasoned), or performance-linked (payment tied to outcome).
2. Derive conditions backwards from success practice: what do customers who reliably achieve results actually do? Exactly that becomes the condition.
3. Word the guarantee precisely, specific outcome, specific date, specific consequence, instead of amorphous "satisfaction guarantees".
4. Run the math: weigh additional closings against expected refunds, and adjust the guarantee if the balance tips.

## Example

A typical case: a B2B SaaS product with a demanding rollout loses deals to the fear that the project might quietly stall internally. The vendor frames an onboarding SLA as a conditional guarantee: if the customer has not reached a concretely named value moment by a defined day, provided they followed the agreed rollout steps, a credit applies. The conditions are exactly the activation steps that happen with successful customers anyway. First-purchase risk drops noticeably, and the guarantee simultaneously disciplines the vendor's own onboarding.

## Limits

For offerings whose success depends heavily on customer participation, unconditional guarantees are risky, conditional forms belong there. In enterprise settings, contractual SLAs and liability terms replace the marketing guarantee; the tone must fit the procurement process. A guarantee does not compensate for a weak product. It merely accelerates the refunds.

## Metric

The net balance of additional close rate versus refund rate after introducing the guarantee; as a supplement, whether the guaranteed onboarding milestones are actually met.

## Sources

- Signaling Quality with a Money-Back Guarantee: The Role of Transaction Costs — Marketing Science 14(4), 442-466, INFORMS (Sridhar Moorthy, Kannan Srinivasan), 1995 · academic and scholarly literature · supports the underlying mechanism. Shows in a formal model that a money-back guarantee credibly signals quality, because it genuinely costs the vendor money when performance is weak, and that it substitutes for or complements price as a signal depending on the situation. (https://pubsonline.informs.org/doi/10.1287/mksc.14.4.442)
- This ONE Equation Will Make You RICH — Alex Hormozi, YouTube, n.d. · practitioner source · describes the method. Origin of the four-way classification of guarantees used here and of the reading that one sells against inaction and perceived risk. (https://youtube.com/watch?v=5MHQr-Z17Hc)
- Primary source: Signaling Quality with a Money-Back Guarantee: The Role of Transaction Costs (https://pubsonline.informs.org/doi/10.1287/mksc.14.4.442)
- Adapted from: Alex Hormozi ($100M Offers/$100M Leads, YouTube-Langform)

## Related

- Method: [Virtuous Cycle of Price](https://www.convios.com/en/methods/virtuous-cycle-of-price)
- Method: [Minimizing Need-to-Believes](https://www.convios.com/en/methods/need-to-believes)
- Method: [The Value Equation](https://www.convios.com/en/methods/value-equation)