Every single potential customer has had a bad experience at some point in their life with spending money on a product or service.
They might have bought something and it didn't work as well as they expected.
Or perhaps they bought something and found they could have got something just as good a lot cheaper from someone else.
Or maybe they bought something and were then criticised by someone for their purchase. They might have been told they'd made a stupid or dumb mistake.
You and I have also had at least one experience like this at some point in our lives.
So this means that we are all a little bit cautious about spending money on products and services because we might make a mistake and then feel bad.
In other words there is a certain amount of risk involved in buying any product or service. One of our responsibilities in marketing is to reduce the risk (in our customer's minds) of buying our products or services.
Because the lower the risk (in the mind of your customer) the greater the chances that they will buy what you have.
The number one rule with risk is this: 'Everything Counts'
In other words, everything you do or say when interacting with a customer has an impact on how risky they think it is to buy your product or service and do business with you.
And the impact is either positive or negative in the mind of your customer.
So everything you say or do is causing your customer to think it's either more risky or less risky to do business with you.
I had a problem with my automatic garage door a few days ago when the wire that pulled it up got loose so the garage door was stuck open.
I phoned 5 companies in my area who did garage door repairs.
Two businesses I spoke to were so busy they couldn't come to my home for 2-3 days. One business was able to come about 4 hours after I phoned and they did an excellent job. I also left messages with two other garage door repair businesses.
One of these businesses never replied to me at all.
The other one phoned me back three days later.
Now the garage door repair firm that phoned me back three days later may be a lot better than the firm I ended up using.
But because they took three days to make contact I assume they are slow, sloppy and not that good at what they do. (In other words I think it is more risky to do business with them, simply because they didn't return my phone call promptly.)
So just by responding to new customer enquiries fast you can reduce risk in the minds of these people and increase their chances of choosing your business.
Another helpful way to reduce risk is to use Social Proof.
We often look to see what other people are doing before we act.
We also make buying decisions based on what other people similar to us have done. That way we reduce the risk of making a wrong decision.
Social Proof is how we often choose movies, restaurants, holiday destinations, cars and many other products and services.
Social Proof can be summed up in the question many of your potential clients will have.
The question is: "Who else has purchased this product or service and what happened when they did?"
When you can show these people proof that other people similar to them have purchased your product or service and enjoyed some wonderful benefits you will increase your chances of making a sale.
Some very effective ways to use Social Proof include testimonials, photos of happy clients and case studies.
My main message in this week's column is to look for ways to reduce the risk in the mind of your potential clients around using your products or services.
The lower the risk in using your business the higher the chance they will end up spending money with you.
"Being on par in terms of price and quality only gets you into the game. Service wins the game." - Tony Allesandra
Write down 5-10 ways you can reduce the risk of buying the products and services you sell. Put one of these into action this week.