People pay to reduce risk!
I heard an interesting article on the Innovation Hub radio show recently, talking about how riskiness affects people’s decisions. It got me thinking because I’ve wondered for many years about the connection.
When we’re working on connecting our products and marketing to the customer need, we often start with their needs and desires. The customer desires a phone which is functional and attractive, with long battery life and easy-to-use apps.
That’s fine as far as it goes, but it’s a pretty surface-level way of thinking.
Let’s ask this question: What risks are the customer worried about?
- That the phone won’t work when I most need it, that’s pretty obvious.
- That those apps are going to leak my personal information, resulting in identity theft or at least inconvenience.
- That my friends will laugh at me for being out of fashion.
- That I’ll get crappy coverage at my home or workplace.
- That I’ll drop my phone in the water.
- That all my contacts and texts and other personal information will be lost when I convert from my current phone.
- And so on.
I use cell phones as an example because, in fact, many manufacturers have paid attention to these kinds of things. For instance, it’s really impressed me how much the process of migrating from one phone to another has been made seamless. That’s what it looks like to take a vague fear of risk and change it to a pleasurable experience.
Now if they could just fix the cell network at my house.
This is a fabulous exercise to do when you’re defining your product or service, and figuring out how to market it effectively. When you go well beyond the obvious features and benefits to look at other dimensions of risk, you can unleash opportunities for innovation, differentiation, and growth.
Which is so incredibly important in a world where customers perceive that everything is pretty much all the same. Then they’ll just buy the cheapest one.
I blog regularly on this topic on a site called The Values Based Business. If you find this article interesting…