Risks can be one of the most influential factors affecting purchase habit of a customer. There are different types of risks which are functional risk, physical risk, financial risk, social risk, physiological risk, and time risk to influence customer buying habit (Kotler & Keller, 2012). We as a human being always look for a comfort zone, anything that we’ve not done before or have not used, we’re always reluctant to give it a try. We’re no different as a customer either. We look for that comfort zone and risk reduction strategies can be a way to assure us by the companies.
According to Ghotbabadi, Feiz & Baharun (2016), relationship marketing, brand image, and service quality decreases perceived risk of a customer and increases satisfaction. In their journal, they also mentioned a strong negative correlation between customer satisfaction and perceived risk.
A great technique to resolve risk can be by formulating effective risk reduction strategies. For example, movie reviews can be a great way to reduce the inherent risk for people wanting to watch a movie but reluctant fearing if the movie is actually worth their time and money. Another smart way can be by using certifications, like the organization I worked with in Often Serious claimed and widely promoted that they have got an ISO certified procedures. That is something we don’t see often, but that assures all the partners and the clients that the organization makes use of the latest and best infrastructure with an equally well-equipped team to resolve any issues and give a peace of mind to the clients and all related stakeholders.
Talking more about it, a test drive can be an effective way to give people a hands-on experience for trying out a vehicle; when they’re in the driving seat themselves, they do feel more confident with the product reducing the risk. Also, warranty/guarantee can be a technique to reduce risk and assure a customer that they’ve nothing to fear while using the product, as they’re protected for a certain period of time as mentioned in warranty/guarantee.
In conclusion, it’s safe to say that the lesser the risk associated with the product, a customer is more likely to buy the product. So, it’s important for companies to realize this fact and use risk reduction strategies to reduce or remove risk associated with their product.
References
Ghotbabadi, A., Feiz, S., & Baharun, R. (2016). The Relationship of Customer Perceived Risk and Customer Satisfaction. Mediterranean Journal Of Social Sciences.
Kotler, P., & Keller, K. (2012). Marketing management (14th ed., p. 171). Boston: Prentice Hall.
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Risks can be one of the most influential factors affecting purchase habit of a customer. There are different types of risks which are functional risk, physical risk, financial risk, social risk, physiological risk, and time risk to influence customer buying habit (Kotler & Keller, 2012). We as a human being always look for a comfort zone, anything that we’ve not done before or have not used, we’re always reluctant to give it a try. We’re no different as a customer either. We look for that comfort zone and risk reduction strategies can be a way to assure us by the companies.
According to Ghotbabadi, Feiz & Baharun (2016), relationship marketing, brand image, and service quality decreases perceived risk of a customer and increases satisfaction. In their journal, they also mentioned a strong negative correlation between customer satisfaction and perceived risk.
A great technique to resolve risk can be by formulating effective risk reduction strategies. For example, movie reviews can be a great way to reduce the inherent risk for people wanting to watch a movie but reluctant fearing if the movie is actually worth their time and money. Another smart way can be by using certifications, like the organization I worked with in Often Serious claimed and widely promoted that they have got an ISO certified procedures. That is something we don’t see often, but that assures all the partners and the clients that the organization makes use of the latest and best infrastructure with an equally well-equipped team to resolve any issues and give a peace of mind to the clients and all related stakeholders.
Talking more about it, a test drive can be an effective way to give people a hands-on experience for trying out a vehicle; when they’re in the driving seat themselves, they do feel more confident with the product reducing the risk. Also, warranty/guarantee can be a technique to reduce risk and assure a customer that they’ve nothing to fear while using the product, as they’re protected for a certain period of time as mentioned in warranty/guarantee.
In conclusion, it’s safe to say that the lesser the risk associated with the product, a customer is more likely to buy the product. So, it’s important for companies to realize this fact and use risk reduction strategies to reduce or remove risk associated with their product.
References
Ghotbabadi, A., Feiz, S., & Baharun, R. (2016). The Relationship of Customer Perceived Risk and Customer Satisfaction. Mediterranean Journal Of Social Sciences.
Kotler, P., & Keller, K. (2012). Marketing management (14th ed., p. 171). Boston: Prentice Hall.