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The notion that perceived risks influences purchasing behavior has been around for quite some time. As we have seen an increase in the complexity of the buying process, we are seeing a correlating increase in Buyer Perceived Risks (BPR)© associated with purchase decisions. Compounding perceived risks is the increase in choices as mentioned in my previous article as well as new social channels to explore. This new mishmash of complexity, choices, and new channels causes a much higher degree of uncertainty on the part of buyers.
What does understanding choice have to do with Buyer Perceived Risks (BPR)©? It comes down to two general areas:
Buyers are dealing with the uncertainty and the risks of making a bad choice
Buyers are dealing with the unknown consequences resulting from a bad choice
These two general areas of perceived risks are not necessarily new however the degree of impact has expanded significantly as a result of the convergence of the Internet and Social Technologies.
Variables that are affecting the degree of impact include speed, awareness, chance, and reputation. Put more simply:
The impact of a bad choice is happening much faster, more people as well as organizations are aware when they happen, there are fewer chances to recover, and more damage to individual as well as company reputation. The end result being that buyers are perceiving risks to be greater than ever and making the right choice more challenging than ever.
Previously, I had written about Buyer Perceived Values (BPV)© and the need to understand how buyers prioritize values. The other side of the coin is to understand Buyer Perceived Risks (BPR)© and to understand how buyers see the degrees of consequences that can result from a bad choice. This calls for senior executives and strategists to increase their understanding through what I call Buyerology© - which represents a deeper qualitative level of buyer intelligence. Gaining deep understanding of complex perceived values and risks provides a window into the mind of the buyer as well as the business culture of an organization.
What research with C-Suite executives has borne out is that this understanding arrives too late when it comes to new services, products, and strategies. Oftentimes, learning the hard way why a new product launch, a new service capability, or a much hyped strategy implemented fell flat on its’ face – and both seller and buyer reputation bruised and battered. To prevent their own consequences, selling organizations will need to improve their early-stage buyer intelligence capabilities and make the investment upfront as opposed to investing in post-failure debriefings.
Improving buyer intelligence in Buyer Perceived Risks (BPR)© can lead to being informed on important decisions related to:
Pre-Sales Content: Providing knowledge and information that instills confidence in choice and reducing perceived risks.
Sales Interaction: Enabling sales to engage in conversations and interactions that authentically confront perceived risks and brings them to the forefront of the sales process as opposed to last minute barriers.
Post-Sale Implementation: Content, implementation services, and interaction can all be used to enhance a buyer’s perception that adverse risk has been avoided and value gained.
There is a given in all this. The given is that a selling organization truly has the quality and the confidence that it can deliver for the buyer and that it has assurances in place that they can reduce Buyer Perceived Risks (BPR)© significantly. No amount of content, smooth talking, and excuses will make up for poor quality and capability of a product or service.
Understanding perceived risks today through deeper qualitative buyer intelligence (Buyerology©) can go a long way towards organizations standing out from the pack of options that can exists. Insightful understanding leading to helping buyers to make choices that are made with more ease, confidence, authenticity, and affirmation that ultimately results in hard sought loyalty.