Consumers hate risk, so does your small business add or remove risk from your customers?
I’ve had the same barber for the last ten years and the same deodorant for the five. How about you?
I’ll bet that you have a trusted barber/stylist, and if you’re like me, once you find a deodorant you like, you stick with it. Okay, enough about barbers and antiperspirants. Why are consumers, including your prospects, so unwilling to try new products and services? Even when consumers and prospects think there might be a better alternative out there, they don’t make a switch. Risk. The risk is too great.
Hair and sweat probably have nothing to do with your business, but no matter what business you’re in, there are prospects—good prospects who want to buy from you, but their perceived risk is too high. Are you losing potential customers because it’s too risky to work with you?
The more risk there is in working with your business, the more prospects will elect to stay with their current choice, or perhaps look into another solution that’s not quite so risky.
What risks are associated with doing business with you? If you don’t know you need to find out—now!
Ask your prospects what risks they feel are associated with working with you, and ask your customers what risks they overcame in deciding to work with you. Smart business owners don’t speculate or use a magic 8-ball in identifying consumer risk. They get right to the source by asking their prospects and customers.
Take a Look Around:
Once you’ve talked to your prospects and customers, take a close look at what the rest of the industry is doing. Does your competition attempt to reduce the risk for prospects? Do they make it easier for prospects to work with them? Ask yourself, “Is it easier for prospects and customers to work with XYZ Company than me?” If the answer is “Yes,” you might be losing a lot of business.
What’s the Risk?
Below are some common consumer apprehensions (questions that run their minds) that can keep prospects from buying from you:
- How do I know I am getting the best value?
- What if I find a better price two weeks after I buy from you?
- How do I know your service will be good three months down the line?
- What if you don’t make our deadlines?
- What if I don’t like your product, can I get a refund?
What Can Small Businesses Do to Minimize Risk?
- Offer a guarantee (price, delivery, service, and or quality)
- Offer a trial period
- Offer a discount to new customers
Taking risk away from prospects makes it easier to them to business with you. You might have seen Right Guard do this several years ago with wonderful success. They proposed that if you didn’t like their deodorant you could, “Send it back, and they’ll buy you a stick of yours.” This type of approach gives you tremendous credibility and let’s prospects know that you stand behind your product/service.
Prospects think, “Hey, if they are willing to stand behind their product/service, it has to be good.”
The Bottom Line for Sharp Business Owners:
- There’s a risk to working with you
- Find out what those risks are, do it today
- Analyze how your competition is reducing customer risk
- Conceptualize and test your strategy to minimize customer risk
Make sure that your marketing and advertising explicitly expresses how you’ve minimized the major risks that prospects have. After all, what good is minimizing risk if no one knows about it?