You have finally arrived at your long-haul flight destination and make your way to the car hire desk where you booked a car for your round trip in advance. There you are informed that your chosen insurance does not cover all possible risks. You are offered an "all-round carefree package" for a small surcharge, which covers all possible risks and does not require an excess. You must now decide whether you want to choose this option and whether you want to follow the Zero-risk bias are subject to.
It is well known that people often feel the need to eliminate risk completely, even when the risk is low. This not only applies to financial decisions, such as a Experiment in the USA shows. In general, people there are rather risk-tolerant. Scientists approached people in a shopping centre in Greensboro, North Carolina, who had just come out of the DIY store. They showed them a bottle of toilet cleaner and listed the possible risks: 15 out of 1000 consumers could be poisoned by the gases, and another 15 out of 1000 consumers could injure their eyes from the cleaner.
People cannot calculate with probabilities
The passers-by were then asked whether they would be prepared to pay more to obtain a safer product - and how much they would spend to do so. Researchers Kip Viscusi from Northwestern University and his colleagues achieved a clear result: the respondents were prepared to pay 65 cents more to reduce the risk of injury to 10 out of 1000. For the next 5 per thousand, passers-by would have been prepared to pay a further 19 cents more. It is particularly interesting that the majority of respondents would have been prepared to pay a further 83 cents to reduce the risk to zero. This behaviour is known as zero-risk Bias is the tendency towards zero risk. People would rather eliminate a very low risk completely than make a high risk significantly less risky. There are at least two reasons for this behaviour: People often have difficulty calculating probabilities, and there is a limited capacity for thought.
The zero-risk bias in online marketing
In online marketing, the zero-risk bias principle can be applied by minimising or ideally eliminating the risk for potential customers. To achieve this goal, you need to identify potential risks and dangers for the target group. There are many ways to minimise the fear of incorrect orders. For example, size charts, detailed product descriptions, lots of pictures or videos can provide more security. Customer reviews are also important as they increase confidence in the product and can reduce the returns rate. For smaller and new online shops, it is a good idea to allay customers' financial concerns by offering low-risk payment methods such as PayPal, cash on delivery or purchase on account and allowing a longer returns period than required by law. Offering financing can also help to minimise the fear of high costs.
It is important to understand that in most situations it is not possible to reduce the risk to zero. This is why it is called the "zero-risk illusion". Nevertheless, the zero-risk bias principle can be applied effectively by identifying and eliminating or minimising potential risks and customer concerns. It is advisable to communicate the risk avoidance solutions proactively on the website and all other advertising platforms to gain customer trust.
Conclusion
Although zero risk is not always the best economic decision, we cannot escape the human desire to minimise risk. By identifying and eliminating potential risks and customer concerns, using low-risk payment methods and granting extended return periods, companies can effectively apply the zero-risk bias principle in online marketing and win more customers.