This resounding phrase is heard throughout many businesses as the demand for sales increases in order to offset rising costs.
While we may wish to create more revenue by selling more, our customers are facing rising costs at the other end of the spectrum. They’re looking at their money and wondering how they can make it last longer. Every time they spend money, they take a risk.
Yet more often than not, businesses and organizations don’t consider the risks customers face daily when thinking about buying from us.
An underlying factor why people don’t buy from us is that they perceive some sort of risk. Perhaps they’re unsure of our brand, the new product or our service offering. They want to ensure that if they buy something for their company or their family, it will leave them in good standing financially, socially and functionally.
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If you can figure out what risk your customers perceive, you can offset that by communicating value and offering the best warranty or security to minimize that perception.
Customers typically have four risk perceptions: financial, social, functional and safety. By building a relationship with your customers and asking the right questions, you can figure out what type of risk they perceive and allay those fears.
- Financial – Your customers are worried about the cost of the product or service not being equal to the value. You can reduce this risk by having payment plans and guarantees and creating a perception of value in the product.
- Social – No one wants to be humiliated or embarrassed, and if the thought of buying your product has the potential to cause social risk, your customers will steer away. You can reduce this risk by positioning your product for the right market and engaging with your customers in a way that reinforces their ego and suggests they might be the leaders in the buying experience.
- Functional – Your product needs to do what you say it does. Warranties and guarantees can reduce the risk to your customers that they might be buying something that doesn’t work as promised.
- Safety – If your product could hurt someone, you need to be aware of that risk and have plans to reduce the risk to your customer. This may include government inspections and certifications. It may also include safety standards that satisfy your customer that you’ve done everything necessary to reduce the risk to them and those around them.
Figuring out how you can reduce the risk for your customers increases the likelihood that they will buy from you. Many companies find that they get lots of hits to their website but few buyers. If your customers don’t trust you for whatever reason, they will not buy from you. People buy from people they like and trust.
Developing trust takes time and effort. To build that trust, you need to develop a relationship; you need to develop credibility. This advice applies to brick-and-mortar businesses and online companies.
A critical factor in building trust is consistency. Your customers buy the first time and expect the same level of service every time after that. If you, as the owner, are giving great service, but your vision of that service level hasn’t cascaded down to your front-line employees, you have a problem you need to fix.
Building trust and consistency can improve your sales and increase your profits. Start looking at your business model and organization with a new set of eyes today. Make notes on how you can reduce your customers’ risk, thus increasing your ability to grow your sales.
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