Reducing pre-purchase risks

Why are widely known brand names worth so much? Why are referred prospects the easiest to convert? Why do the majority of consumers compare a few suppliers/products before making a final purchase decision? The answer to all these questions is risk.

In most situations we, as human beings, are motivated to avoid risk of all kinds. Have you ever decided against buying a ‘home brand’ product so as not to appear cheap in front of friends? This is social risk at work.

Risk is a barrier to the prospective customer buying. From the customer’s perspective, there is a risk that the actual product or service may not deliver on expectations.

If the perceived risks outweigh the potential benefits, the prospective customer won’t buy. The key to success is minimise the risks by making the potential benefits more real. This can be achieved using performance predictors.