Selling products effectively means having a solid understanding of human psychology. Humans are funny creatures and when they decide to buy something, there can be all kinds of unexpected emotions and thought processes behind the scenes.
Understanding these and tapping into them is the best way to make sure that you encourage people to buy and maximize your sales.
What is Risk Aversion?
One aspect of human psychology that is crucial to your ability to sell is risk aversion. Risk aversion refers to the simple fact that people don’t like risk. That might sound obvious but it’s important to recognize just how much people are averse to risk. In fact, people are inverse to risk to the point that they’ll make very bad decisions.
For example, if you were given the option to enter into a competition where there was a 30% chance you would lose $30 and a 70% chance you would gain $100, there’s a good chance you would not want to enter. This is despite the fact that it would actually be the smart decision based purely on the statistics. People hate risk and they would rather maintain the status quo than involve any risk to try and increase their standing.
As a seller, it’s your job to get around this as any transaction will automatically involve some element of risk.
How to Remove Risk
So with that in mind, how do you go about removing risk as a seller? The first step of course is to understand just what exactly it is that your buyers are afraid of! There are a number of things that can potentially go wrong with any transaction and these are the things that your buyers will be worried about.
For example, there is a risk that your product will never show up and they’ll have wasted their money. There’s a risk that the product won’t be as good as it sounds and they won’t be getting good value. And there’s a risk that the their money will get stolen because the transaction wasn’t secure. So how can you remove this risk? Here are a few ways…
Offer a Free Trial
One easy option is to offer a free trial. This is a great way to remove risk because the user has the item in their hands and gets to try it before they decide if it’s worth the money. There’s an old saying that the very best way to sell a puppy is to let the buyer take that puppy home for a week. By the end of that week, they’ll likely be happy to put down any amount of cash!
Offer a Money Back Guarantee
A similar strategy is to offer a money back guarantee. That means that you offer to give the money back with no questions asked. Most people won’t take you up on the offer but knowing it is there can make a big difference!
The Site Design and Checkout
Finally, make sure that your site design is as professional as possible and that you have a checkout that is secure and ideally recognized by your buyers.