Perceived Risk is the uncertainty that consumers face when they cannot foresee the consequences of their purchase decisions. To see more information on perceived risks, click here.
Generally, businesses will find it easy to make sales from referrals, because the trust level of the consumer is higher. However, in order to reach any higher level of growth, businesses need to make sales from traffic sources that are not referrals. The problem is, users from these traffic sources are generally unlikely to buy, mainly because they don’t yet trust the brand. What if I buy a product and then it’s not what I was expecting? Won’t I then I lose my money?
So the question is, how can businesses reduce perceived risks for traffic arising from sources other than referrals?
How Patagonia Reduces Consumer Perceived Risks
Patagonia needed to reduce consumer perceived risks in order to generate the millions of dollars that they now create. One way in which Patagonia does this is through providing a return policy.
This policy promises that “if you are not satisfied with one of our products at the time you receive it, or if one of our products does not perform to your satisfaction, return it to the store you bought it from or to Patagonia for a repair, replacement or refund”. It also offers a fair return option via shipping.
Patagonia Return Policy
Another thing that Patagonia includes to reduce consumer perceived risk is through reviews.
By including reviews for products, consumers who don’t yet trust the brand can be sure that the products are as advertised. This effort is also applied through Seller’s Ratings on their Google Ads, which are essentially ratings provided by Google based on reviews. This can be seen below.
Overall, by applying these methods, Patagonia successfully reduces consumer perceived risk.
