advantages of using external consultants

Business Lessons from IKEA – Risk Reversal in Action

I try and keep out of the shops as much as I can but a recent shopping trip to buy a new bed hit home the importance of “Risk Reversal” in business and how it can really help you stand out from the crowd.

I am sure you have all done this at some time when shopping for a new bed.

You lie on lots of different mattresses in many stores – but continue to wonder what happens if you get the new bed home and don’t like it – can’t sleep on it – or you wake up with back pain.

So YOU – the buyer – are taking all the risks.

Then I walked into IKEA – and the guarantee was plain and simple.

If you get the mattress home and for any reason in the next 30 days you don’t like it – then just bring the bed back and they will refund your purchase.

WOW – how good is that.

So THEY take the risk not YOU.

Most – dumb thinking business owners – will say “that would cost me a fortune in refunds – and I can’t sell the returned bed once it comes back – this is a disaster”.

But I think IKEA are smart enough to realise that refunds are just part of the business process and are confident this strategy will increase overall sales by high enough numbers to more than cover any returns they get.

One of my business mentors once told me that if you are not getting lots of returns – you are not selling hard enough.

You want to encourage as many people as possible to give your product or service a go – and accept refunds as just a standard business expense.

How can you apply this in health care?

How about a money back guarantee and your next session free if any client is not happy with your service (this was our guarantee for many years in my physios clinics).

If you sell a product like orthotics – give a 100% money back guarantee and the client can even keep the health fund rebate – so the client is actually in front if they give it a go.

Personal trainers can guarantee your clients lose 10kg in 10 weeks using your highly specialised training system – provided the client adhere to the system of course.

Each of these guarantees will provide a great point of difference and greatly increase your business profits – guaranteed.

I welcome your thoughts on this topic.

Paul Wright



10 thoughts on “Business Lessons from IKEA – Risk Reversal in Action

  1. Paul Wright Post author

    HI Everyone – I thought I would post this reply here and get your thoughts.

    AHPRA Guidelines and Guarantees – Wrighty In Trouble Again

    Well – as usual I find myself in hot water for shooting my mouth off about common sense business ideas – only to run the risk of being hauled over the coals by our various governing bodies and “big brother” regulators.

    In the post above I spoke about the importance of risk reversal and guarantees – to help us share some of the risks facing our clients when choosing to do business with us or to buy one of our products.

    I recommended money back guarantees and next sessions free if any client was not happy with your service – as was our guarantee for many years in my Physio business.

    I also commented on giving money back guarantees for orthotics – and for personal trainers giving weight loss target guarantees of a full refund.

    I received many emails from concerned health business owners who referred to the advertising guidelines from governing bodies such as the Australian Health Practitioner Regulation Agency (AHPRA) – that make the use of guarantees difficult – if not impossible.

    International health professionals will have a similar governing body that control your specific profession – controls being the operative word – so you need to check with your specific regulators.

    Never being one to stay quiet for long – I have had a close look at the regulations in the AHPRA Advertising and have copied some these regulations below:

    The National Law includes a section on advertising (section 133), which lists what is not acceptable, including (but not limited to):

    – making misleading claims
    – offering an inducement such as a gift or discount (unless the relevant terms and conditions are also included)
    – using testimonials
    – creating unreasonable expectations of beneficial treatment, or
    – encouraging the indiscriminate or unnecessary use of a service.

    I received one email from a concerned professional who commented:

    “Dear Paul, AHPRA Advertising Regulations don’t allow any advertising that
    either expressly, or by omission, indicate that the treatment is infallible, unfailing, magical, miraculous or a certain, guaranteed .We used to offer a guarantee on our services but with the new regulations we are concerned this could be viewed as an ‘inducement’ which is also expressly prohibited by AHPRA. What are your thoughts?”

    This email was typical of the comments I received from other professionals – but maybe – I am missing something – because at no time have I ever suggested breaching any of these guidelines.

    I don’t think it is possible to 100% guarantee the success of a health service (as much as I think we should) – but it is certainly possible to 100% guarantee that your client or patient is happy with the quality and service you provide – these are very different issues.

    You are not creating “unreasonable expectations of beneficial treatment” – you are just providing a solution for the client who is not happy with the outcome they receive.

    From where I am sitting all this does is create a level of confidence and security for the patient that you believe in your skills and will do your best to give them an outcome they are happy with.

    So in a nutshell I see no reason why – based on these regulations – all health professionals should not be offering satisfaction guarantees on each and every service and product they deliver.

    If you are not doing this I believe you are actually de-valuing your profession as it is clear you do not believe in your product or the quality of the service you deliver.

    I welcome your thoughts on this topic.

    Paul Wright

    1. Darren Stuchbery

      You are spot on, Paul, as (mostly) usual(!)

      I think it’s possible to use wording that could get you in trouble. For example, “we guarantee we’ll fix your problem”. That would just be stupid.

      So as long as Profit Clubbers use language which makes it clear we are guaranteeing their experience of our service, then we should be okay.

      If anything, I believe that to NOT offer a money back guarantee would be to defy normal business practices of refunding to unhappy customers and to possibly bring the ACCC down on you if a complaint was made that you hadn’t. That is, as a consumer I am protected from being ripped off by someone who does not provide the service I expect to receive. By offering a money back guarantee of satisfaction, surely you are really just stating the convention, right?

      Has anyone actually run a selection of statements past a legal representative or by AHPRA to see what they find acceptable? Love to hear about it.

      – Darren Stuchbery

      (For what it’s worth, here’s what our website says:
      We offer a 100% money back guarantee if you are not happy with the service you receive – just let us know how we fell short so we can continue to constantly improve our service. Contact Darren Stuchbery and he will arrange a refund of any service fees you have paid and arrange a complimentary session to correct any problems you may have encountered.”)

  2. Mark Quittner

    Hello Everyone,
    The above issues have concerned me for over 20 years. In the past the Physio association ethical edicts were much stricter but less enforceable than the current legislation. As a Physiotherapist I find that numerous other ‘health’ practitioner or alternative health practitioners use marketing methods (without prosecution by the ACCC) well outside what should be allowed. The Testamonial component is only one aspect. We can use testamonials to state that we procvide a good customer experience however cannot make statements comparing our therapeutic services to others.
    Ultimately the problem boils down to this: We can think that we are within the law however any complaint raised by a customer or even professional opposition would be sent to the ACCC causing problems. As each complaint is heard on its own merits and evidence of malpractice by others in your defence is inadmissable, the world could come crashing down. A record of impropriety would then have to be declared to future insurers and the Registration Board each year.
    It would be best to have a specific legal ruling on advertising such as Testamonials, Guarantees etc before proceeding to use such options in marketing. Just because someone has not been caught before does not make it right before the authorities!

  3. David

    Dear Paul
    Re AHPRA Guideline – I am a Physio and certainly agree with your comments about guarantees but I am interested in your thoughts on offering a Free Injury Assessment and Report to patients – How does this go with the AHPRA Guildines which state that we we not allowed to offer an inducement such as a gift or discount (unless the relevant terms and conditions are also included).


  4. Barndog

    Calling AHPRA a big brother regulator is innapropriate and gives no respect to our patients who need AHPRA to protect THEM against unscrupulous practioners, amongst other issues
    A 100% guarentee on a pair of orthotics could be misconstrued as a guarantee of efficacy when none can ethically be given

  5. Terry Kane

    The practice of any discipline in healthcare is about the execution of clinical excellence in achieving the best clinical outcome for the patient. While good customer service is important, it must never take precedence over doing what we, as clinicians, know to be in the patient’s best health interests. Regrettably, this often entails telling patients things they do not want to hear, but need to hear in order to achieve the best possible outcome. It’s up to each clinician to determine how they want to practice (refunds, methods, etc), as long as the pursuit of clinical excellence in the patient’s best health interest is the single compass point in decision making. The practice of healthcare is not a popularity contest, it’s a responsibility. Emergency room physicians and surgeons don’t offer refunds so why should physical therapists?

  6. Don MacKenzie

    G’day Paul,
    You are quite correct.
    We should all learn to remove common sense and logic from the equation when dealing with governing bodies and bureaucracy.

  7. Michael Shilson-Josling

    Hi Paul,

    Of course you can’t guarantee to make every patient 100% better. In fact my money back guarantee specifically states that “we believe in the quality of our service
    and the complete care that we offer. If you are not 100% happy with the quality of the care you receive from your physiotherapist, simply contact me within 10 days of your treatment and we will refund you the cost of your session or sessions with us.”

    So the emphasis is on the quality of treatment and not the outcome, and I back the quality of the treatment me and my staff offer 100% of the time.



  8. Jason Bradley

    Hey David,

    I offer ‘Free Injury Assessments’ similar to the templates in Paul’s profit club. I think the big thing to note after reading the guidelines as Paul said is:

    -You need to give clear conditions of whats involved.
    -Not give inducement for unnecessary treatment (but if people are in pain whats wrong with them getting something checked) its different if you are doing a buy 2 get a 3rd Free (which is not allowed).
    -And don’t try to sell something with an inflated value that misleads the consumer (eg stating the consult is worth $95 if that’s the cost of your normal 30min initial consult with treatment but you are only doing a quick 10min assessment in the freebie).

    Paul is right. His recommendation of risk reversal is not saying we can fix everything. Only that we guarantee our clients satisfaction and are happy to address it if they aren’t.

  9. Dr Wayne Gard

    Hi Paul,
    Yep you are in breach of AHPRA guidelines!
    These guidelines are a draconian step backwards for practice marketing – I have already been warned to change some of my marketing!
    And making it harder and harder to build/sustain business….Especially for chiropractors – who rely almost exclusively on marketing!!!