How To Go From Potential Customer To Actual Purchase.

When a potential customer recognizes they have a need, or a problem that needs to be solved, they go through a series of steps as a part of their decision process. Simple decisions go through this decision process at a rapid pace, while others require spending a longer amount of time at each stage.

So what are the steps of the decision process?

1. 1. Need Recognition
   2. Information Search
   3. Alternative Evaluation
   4. Purchase and Consumption
   5. Post-Purchase

In this blog post we’re talking about perceived risk, so we’ll focus on two stages: Information Search, and Post-Purchase, since this is where risk is addressed.

INFORMATION SEARCH

There are 5 types of perceived risk you need to be aware of, and think about how you can lower the risk for your potential customer to help them make a decision.

The 5 types of risk:

Performance Risk

Is the product going to work how you said it would? Does it have the level of functionality that was promised? Can you show data or comparisons of how your product works as compared to the competition?

Financial Risk

How much does your product or service cost? How much is it compared to alternatives? If your prices are higher than the competition, what is the value you bring to the product to make it worth it? The higher the cost, the more perceived risk there will be, so you have to be sure to point out why your product is top tier and worth the money.

Social Risk

This is the fear that other people will not have a positive view of the purchase you made as a buyer. Having a solid reputation online with people talking about your product or service can help to alleviate this risk.

Physiological Risk (Safety Risk)

Does your product or service have any risk of physical harm? A good example of this is cars. People seek out vehicles with a high safety rating because it has a high physiological risk and they want to be safe and secure.

Psychological Risk

How your buyer will feel if the product or service doesn’t convey the image they hoped it would. Make sure you position your product so that the perception of how the buyer should feel about it aligns with their expectations. A great example of this is how Betty Crocker turned around it’s failing sales of Instant cake mix, which was caused by the feeling of guilt. A Creativity Lesson From Betty Crocker.

Buyers don’t look at every risk when going through the purchase of a product or service. There is no checklist that they’re checking off, but as a rule of thumb the above list is risks that could be associated with your product or service. Being aware of what they are is important so you can address them early on in the decision making process.

The larger the value of the purchase, the more perceived risk a buyer has. This means they will do a lot more research, ask for recommendations of friends and family,  and seek out social proof online to make sure other people also have a good perception of your business.

POST PURCHASE BEHAVIOR

The last stage of the decision making process is post-purchase behavior. One of the worries of a buyer is that after they make a purchase, they’ll feel like they made a bad choice. This is called buyers remorse, or post purchase cognitive dissonance. It’s real and it’s a big reason consumers hold off on making a buying decision in the first place.

How can you reduce the risk that your customers will have buyers remorse?

Don’t over promise and oversell or your product or service or you’ll run into a lot of buyers remorse from your customers. They’ll be expecting one thing and get another, and that’s just not a good experience. Make it clear how to use the product or service. If it’s a complex software offer a support guarantee. If it’s a new-to-market product create videos so it’s clear how it should be used and what it’s intended purpose is.

To get out ahead of potential buyers remorse, make sure you provide your customers with plenty of options to lower their chance of being unhappy with their purchase and the risk of being ‘stuck’ with it.

• • Offer a money back guarantee to make them feel more confident in making the decision to buy, knowing that they have a way to avoid risk if it wasn’t the right ‘fit’.

• • Provide customer service to help them get on-boarded and set up to learn how to use your product or service.

• • If you sell a physical product, offer free returns and exchanges.
  • Use community groups to support customers. Closed Facebook groups have become very popular for this. It allows a place for users of your product to go to collaborate with one another, learn about product features, and help you learn about new features your customers are looking for. It’s useful for your customers because they feel like they have a place to get support, and it’s valuable to your business because it’s like a captive research panel for you to build and expand your product line.

By understanding the risks that your potential customers have about buying from your business you can address them through your marketing. The buyer is in control and they can seek out information to lower their risk in making a decision long before they ever speak directly with your business. Make sure you come up when they’re seeking out information, and build your reputation so social proof of others will speak for you.

If you need help with your positioning and marketing strategy, reach out to Purple Fish Marketing for a free 30 minute consultation. ← See what I did there? I just lowered your perceived risk by offering you a FREE consultation.

As always, Happy Marketing!