I've spoken elsewhere about the folly of risk aversion and the desire to be risk free. As I pointed out, profit comes from entrepreneurs taking calculated risks. But of course the customer also needs to take calculated risks in order to generate their profit too.
“It is the customer's perception of these risks that is important. No
matter if some of them aren't actually real!”
There are seven types of risk for the customer:- Will it work?
- What will I lose financially if it fails?
- How much time will I lose if it fails?
- I absolutely have to make a choice now, so will it be the right choice?
- What if it doesn't do what I thought it would do?
- What will the 'neighbours' think?
- Will it harm me?
As with value, it is the customer's perception of these seven risks that is important. No matter if some of them aren't actually real; in the mind of the customer if they are creating anxiety then they are real enough that you need to help the customer achieve an acceptable balance between overall risk and overall reward.
If you agree with these thoughts and would like to find out more about structuring your business in a better way, selling properly, how to make sales without selling and get paid what you're worth,, visit www.sws3.co.uk to download 30 more free practical ideas you can implement straight away in your business.
Service providers who charge for their time or their materials, or whose prices are influenced by their competitors can find out how to get paid what they're really worth at www.sws3.co.uk
The application of modern Health and Safety legislation has elevated the assessment of risk in our thinking, and some of the most over-zealous examples make the headlines and get into the folklore. But, as the professionals in that sphere will tell you, the goal is to be 'safe enough' which is not always the same as 'safe as possible'.
The truth is we cannot, and we should never try to make our lives risk free. This would stifle all progress. Darwin's theories say that the most adaptable are the fittest to survive new circumstances. The most highly adapted may well have bred out some of that adaptability; restricted their gene pool if you will.
Risks should be weighed against each other, not reduced to zero or judged on 'acceptability'. We happily drive faster family cars today than we did in the 1950s because we've developed better brakes!
“We drive faster cars today than in the 1950s because we've
developed better brakes!”
In business, profit comes from taking risks! Eliminating risk in business would have the same progress-limiting effect as in the plant and animal kingdoms. Risk avoidance is the antithesis of successful business.
All purchase involves risk, and services are intrinsically riskier than products, but the upside of this is that customers show greater loyalty to service providers as the risk of change is so great.
You need to analyse the risks your customers perceive when deciding to make a purchase, and mitigate them as appropriate. Most professional service firms do an inadequate job in this area.
If you agree with these thoughts and would like to find out more about structuring your business in a better way, selling properly, how to make sales without selling and get paid what you're worth,, visit www.sws3.co.uk to download 30 more free practical ideas you can implement straight away in your business.
Service providers who charge for their time or their materials, or whose prices are influenced by their competitors can find out how to get paid what they're really worth at www.sws3.co.uk
