Most people are risk averse, this includes business owners. It’s likely that business owners more than anyone have been burnt by taking risks. So if your business sells B2B services or products, then you will want to ensure that what and how you sell to those prospects is risk adverse.
Nobody likes to be made a fool of, and this is one of the many reasons people follow the heard and buy from large successful businesses. Those customers perceive the successful business’s offering to be less risky since lots of other people are buying from them.
One way for your business to compete with large, well-known and established brands is to remove the risk for customers when they deal with you.
If you have any experience within sales, even if you have only tried it for a day, potential customers come out with an abundance of reasons as to why they feel uncomfortable or do not wish to close a deal. It’s likely that most will use price as an issue for two reasons; Firstly because it’s a natural objection to come out with and second of all, which is most likely to be the real cause, is that those people are yet to experience the value of the service or product that you are trying to sell them. It’s very rare that people do not buy because of price; in fact it’s less than 18% of people that buy purely on price. This means that all of your customers who claim that price is the issue, it’s actually something else that is constraining them from proceeding with their order.
It’s the risk that what you sell them is of less value than what they expect. This puts people from placing an order with you, not the price, but the risk of being undersold to. A feeling of regret, unhappiness and frustration that what they bought does not fulfill their needs and is not as good as what they first expected.
By removing this risk, you will see your sales soar. If there is no risk in buying from you, what is there to loose? Those that have nothing to loose are the biggest risk takers and this is how you need your prospects to feel.
Testimonials, referrals and awards will certainly reduce the perceived risk associated with buying from you, however it will not cover over their deep, underlying fear of parting with their money and seeing it float away with little in return.
There are various mechanisms that you can use within your businesses to remove this risk for our customers and increase sales. Of course not every option is suitable for every business, for instance a property developer cannot build a house only then for the customer to decide that it’s not as good looking or well laid out as they initially expected. But there are options that every business could embrace and use, for example:
A full guarantee would be the best option if you could offer it, however it’s understandable that a full guarantee would not be a suitable option for every business type. A full guarantee would include terms such as a full refund. Shops are notoriously good at this, that’s why people feel comfortable to buy on the high street as they can always take it back.
A limited guarantee is certainly not as good as a fully-fledged 100% money back guarantee, however they are still very effective. A limited guarantee could include a partial refund or an exchange option. This type of guarantee is often used for higher ticket priced items.
Gyms, e-commerce and membership based websites use trails very effectively. A trial enables a potential customer to try and test what you have to offer before they buy.
A gym fanatic will want to know how busy it is in the mornings or evenings along with how well the equipment is looked after.
Online shoppers that use sites such as Amazon will want to know how good their unlimited orders and next day delivery service really is before they commit to a 12-month agreement. Like-wise with membership sites that sell dating or educational memberships, you don’t want to sign up to something that will not fulfill your needs.
Car dealerships are another business that embrace the trial based model effectively with the try before you buy, or the borrow the car for the weekend systems that help you decide whether you want it at no risk before you buy it.
The reason that trials tend to be so effective is that you get used to the privilege and benefits of the product and service, the last thing you want is to loose that and this is why so many trials turn into sales.
An introductory offer can reduce risk by assuring new customers that you are used to dealing and managing new accounts. For example that’s why banks have a structure in place to make it as easy as possible for new customers to switch or use them as their service provider, the introductory offer also usually includes a little extra as a bonus for joining them ‘today’ or ‘this week’.
When someone understands that a business has structure, organisation and systems in place, they feel at ease in dealing with the company. The perception is that the structure is designed to enable many customers just like them to sign up or buy easily. An added bonus of an introductory offer just sweetens the deal.
Everyone loves a good deal and price will be brought up as an objection from customers, but the majority if not everyone that you encounter will complete a deal with you if the offer is too good to refuse. There is the danger that you sell your services or products at too low a price, but as long as you know what your margins are and that there are other key areas in which you will make the money back, then completing a good deal now may not be such a bad idea after all.
A 5,10,15 percent discount more often than not is a sufficient reduction for someone to feel as thought they are getting a bargain.
Once you get into the swing of things you will get into the same system as most successful businesses of increasing your prices by 10% across the board to then simply discount the customers order to complete the sale. It’s a clever yet sneaky system that they all seem to use and there’s no reason that you couldn’t do the same.