Tips in Ten: Addressing perceived risk

Heart Internet’s Tips in Ten

Addressing perceived riskYou’re just ten slides away from learning how to make your customers feel happy and comfortable about buying from

your business.

What is perceived risk?

Perceived risk is a consumer's level of uncertainty regarding the outcome of a purchase decision.

• Performance• Physical• Social

• Psychological• Financial• Time

It can include one or more of these factors:

What is perceived risk?

Perceived risk

Considered purchaseNon-considered purchase

High

Low

Level of involvement(Note: This is relative to the individual/business)

High brand loyalty

Low brand loyalty

Low research High research

How important is perceived risk?

• Will the product perform as I expect?• Can the product hurt me?• What will my peers think? • Am I morally doing the right thing?• Can I afford the purchase?• How much time and effort am I willing to

expend to make this purchase?

People seek out information that confirms the wisdom of their decisions post-purchase

Considered purchase

e.g. Phone

Non-considered purchasee.g. Milk

The risks involved:

What are the risk factors?

Performance riskWill the product perform as I expect?

Reducing the risk:• Prominent product USPs• User reviews• Awards• Testimonials, case studies and quotes• Performance statistics• Previous successes

What are the risk factors?

Physical riskCan the product hurt me (or my website)?

Reducing the risk:• Safety standard awards• SSL certificates• 3rd party “approved” badges• Hygiene/ safety awards

What are the risk factors?

Social riskWhat will my peers think?

Reducing the risk:• Display customer satisfaction data• Positive reviews online• Social media referrals• Association with opinion leaders• Celebrity endorsements• Partnerships with other brands

What are the risk factors?

Psychological riskAm I morally doing the right thing?

Reducing the risk:What are the possible objections? E.g.• Green credentials• Supporting charities• Sponsoring events and organisations

What are the risk factors?

Financial riskCan I afford the purchase?

Reducing the risk:• Breaking down the price e.g. monthly• Comparison e.g. equivalent of a cup of coffee a day• Competitor comparison• Reassuring messages e.g. “Because you’re worth it”• Money back guarantee• Price discounts on initial purchase• Free trial/sample

What are the risk factors?

Time riskHow much time am I willing to take to make this purchase?

Reducing the risk:• Easy to find information about the product• 1-Click ordering & upgrades• Short sign-up process

Example

Risk factor Risk of this product Overcoming the risk

Financial Is this going to be too expensive? • Discount if you pay annually• Money back guarantee• Resell to clients and profit

Social Is this a company others trust? • Testimonials• Award winning• X% of our customers would recommend us

Performance How much data will be stored? • Backs up all your data• Restore your backup at any time

Physical Will I lose any data? • Automatic backup done every day

Time Is this going to take a lot of time to manage? • Fully automated systems

Reseller Pro data back-up service