Reduce Risk Fears by Introducing Choices

Shoppers are more willing to take a risk in making a purchase when presented a few options to select from rather than only one alternative. Therefore, even if you have decided on the one choice which would best meet both the shopper’s specifications and yours, it’s good to include at least one or two other possibilities for the shopper to consider.
     Researchers at University of Chicago, University of Miami, and Shanghai Jiaotong University found this general rule to be true in a range of consumer contexts. Their studies also add to what we already knew about six types of risk shoppers consider:

• Functional risk. “Will the product or service solve my problem or meet my needs effectively and efficiently?” The shopper thinks of this as a probability measure. There’s evidence that consumers will actually spend more time deliberating over two alternatives which are almost certain to solve a problem than when there’s a noticeable functional risk difference between good alternatives. 
• Financial risk. “Am I paying too much money?” 
• Time risk. “If I make this purchase, does it mean investing too much time for what I gain?” Time risk includes considerations about the time to make the choice, get delivery of the item, master use of the item, and return the item if necessary. 
• Physical risk. “Is my health or safety or that of those I care about in danger if I use this item?” 
• Social risk. “If the people I admire know I’m using this product or service, am I in danger of falling out of favor with them?” 
• Psychological risk. “Does using this product or service conflict with the image I want to maintain of myself?” 

     In presenting more than one alternative, your phrasing might, “The item I’m suggesting to you is better than the alternative you’ve been considering.” Researchers at Babson College and Western Kentucky University say this generally works best with new customers.
     “The alternative you’ve been considering is not as good as the item I’m suggesting to you,” is generally best for established customers.
     Or you could say, “What I’m suggesting to you is just as good as the alternative you’ve been considering. It’s not that one is better or one is worse.” Researchers from Indiana University, Northwestern University, and New York University say this one works well if the shopper believes the decision is a risky one even when given a few alternatives to consider.

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