How to Increase Sales: Reduce Risk
Want to Increase Sales? Reduce the Risk
“Be wary of the man who urges an action in which he himself incurs no risk.”
To Live Is To Risk
We all face risk in our personal and professional lives. We make decisions about risk every day. Some of life’s risks are small, like commuting to work or crossing the street, others, like skydiving, are well — riskier. Fear can be a helpful indicator, but too much fear can prevent you from moving forward or making a decision at all. Let’s examine how that relates to marketing and making more sales for your business.
Risk, Marketing and Sales
As humans we calculate risk into all our decision-making. Sometimes the risk outweighs the potential benefits and prevents us from making a purchase decision. One of the roles of marketing is to proactively address the customer’s anticipation of risk — to calm prospects’ fears and mitigate the risks associated with purchasing our products and services.
Your Prospects Want Proof
People are too busy at work and business is too important for people to merely trust that luck will be on their side and that things will work out when buying from you.
Most perceived risks associated with purchasing can be resolved with proof. Proof that your product will do what it’s supposed to do. Proof that your product will accomplish what you say it can. Proof that you’ve represented yourself, your product and your company as they truly are.
Are You Really Who You Say You Are?
You can prove your competence and expertise with the use of testimonials. But not all testimonials are created equally. The best testimonials:
- Tell a story
- Address a prospect’s initial fear, often voiced as an objection
- Address this perceived risk through current customers and their concerns when they were a prospect
- Highlight how your product or service helped them achieve their goals
- Tell how you went above and beyond expectations to delight your customer
Testimonials don’t answer every question a potential customer might ask, but they add a layer of comfort: They paint a picture of what it’s like to do business with you. They help define the customer experience before I become a customer. It lets potential buyers know that others have worked with you and have had a good experience.
The Price:Risk Ratio
Price and risk tend to go hand in hand. Inexpensive purchases have lower risk associated with buying them.
Think about buying a newspaper or magazine — low price, minimum risk.
- You may not like the writing or you may disagree with the editorial content.
- You might leave it behind on the train or lose it someplace else.
- If it’s raining and you don’t have a place to keep it dry, you may not be able to turn the pages or read it at all.
- You may get ink on your fingers or your clothing.
What about buying a computer? The price is higher and there’s a little more risk involved.
- It may not be powerful enough to run your favorite apps and software.
- It may not have the graphics capabilities you require.
- It will become obsolete – but how soon?
- What kind of warranty does it come with?
- Can you buy it for less online?
- Who do you call if you require assistance?
- Is there another model that better suites your needs?
How about buying a home or an office building? This is much more expensive and even riskier.
- What kind of neighborhood is it in?
- How good is the local school system?
- What’s the mortgage rate?
- What’s the expected return on this investment?
- What are the carrying charges?
- What’s the anticipated appreciation rate?
- What about the resale value?
- What about zoning?
- How much can you charge for rent?
Many questions, many more variables and considerably more risk than buying a newspaper.
When it comes to price, don’t be the low-cost provider, be the low-risk choice.
What If Something Goes Wrong Or It Just Doesn’t Work Out?
Marketing can and should address this too. The on-boarding process is a key first step to long-term customer satisfaction. Designate a specific contact at your company for each new customer. Done well, your new client on-boarding can become your unique selling proposition and differentiate you from the competition.
Often by explaining the support you’ll provide and how you address issues after someone purchases is a key part of making someone feel comfortable about doing business with you. Shorter-term contracts and service-level agreements eliminate potential gray areas and go a long way toward putting a prospect at ease. Anticipate these issues proactively and offer them in writing so all parties know what to expect.
Have you ever suffered from buyers’ remorse? That pit in your stomach that’s telling you maybe this wasn’t such a great decision after all? At times, we all have. What can your marketing do to overcome this? Some companies offer a no-questions-asked money-back guarantee.
Here’s a great example from the Professional division of Kimberly-Clark. If you are not ready to commit to such a specific agreement, you might instead offer to let a customer try a product for a period of time (for a fee) before making a commitment. Just make sure to communicate regularly during this ‘trial’ period — holding weekly or monthly meetings to discuss progress or issues.
Eliminating long contractual terms and making relationships easy to terminate are reassuring to a prospect. Concerned that your needs won’t be met? Make it a two-way street. Show your prospect and clients that you are dedicated to their success – put it in writing.
Peter Drucker said, “Action without thinking is the cause of every failure.” Help your prospects think through their purchase decision. Many people fear making a wrong decision. Your marketing should address these very real fears so prospects feel comfortable about moving ahead with you. While you’re thinking about features and benefits, inside your prospect’s head, they’re thinking:
- What are the repercussions of making a wrong decision?
- What does this purchase say about me? About my company?
- What will others think of my decision?
- Who else is affected by this purchase?
- What is the lifespan of making this decision — how long will the repercussions of this decision last?
- What is the payoff for making this decision? What is it worth in dollars?
- What is the risk to my reputation?
Your marketing should help mitigate these fears and lower the risk of doing business with your company. To uncover these fears, ask existing clients what it was like for them before they became your customer.
Remember, risk enters into all human decision making. The easiest decisions have lower risk associated with them. Your marketing should address a prospect’s risk concerns proactively by thinking about their fears and trepidations. When you eliminate the risk associated with buying your product or service, you’ll make more sales.
How are you using marketing to reduce risk for your prospects? Let us know in the Comments section below. A real person reads and responds to all comments.
At Crest, we help companies:
- Create content that separates them from their competition
- Become subject matter experts in their field
- Measure the effectiveness of their marketing $$
- Generate a consistent pipeline of high-quality leads for less
- Turn clients into evangelists