6 Perceived Risks Marketer's Need to Reduce

Marketer's need to reduce risks in every industry. Whether it is online advertising or service marketing, these 6 perceived risks are always a factor when purchasing or using a service. Depending on which industry, some can be more than others, and some may have a lesser relevant. Marketer's all appreciate the relationship between price, benefits and quality; they all are a measurement of value. 

Once you identify what the risks are for your product or service, it is a good idea to try and reduce the implications of your risks. 

Functional Risks

Functional risks relate to the performance of the product. Does your product or service deliver what it says it will? Honesty is the best policy! It's not just a saying- it actually will help you retain your customers and increase satisfaction.

For example, you are dry cleaning service, even though you might

Financial Risk

Financial risks are monetary loss. In terms of perception, when you pay more, you expect more quality. Price reflects quality to most people. When items are expensive, for example a car, customer tend to do more research and seek internal or external sources of information. If your product is expensive, then you should try and reduce this risk. This can be done by having warranties, offering free or complementary services, having contracts, and offering something free as a gift.

     

Temporal Risk

Temporal risk refers to time- more or less wasting it! Time is money. Something as small as having a long ques without directions will create frustration. Today I spent close to an hour at the RTA because the ticking system forgot to call my number! This causes anger, especially when there is not much direction. At Commonwealth Bank, many have a coffee machine and direct people to which area they should stand based on their needs.

Psychological Risk

This relates to personal fears and emotions. For example, I might want to invest, but will the financial advisor take advantage of me because of my limited knowledge in the field. It is good to try and figure out the psychological risks that are in your industry- this can lead to targeted marketing to reduce these fears. 

Social Risk

Social risks refer to how people will think or react. For example, what will my friend's think about my new radical hair cut? Like it or not, we all seek approval from the people around us.   

Sensory Risk 

This is unfavourable reaction of the five sense. It is found that ambiance is very important for consumers. Music in the aisle of a shopping centre are purposely chosen at a slow pace because it increases the amount of time people spend in the centre.