Are You Losing Sales Because of ‘Friction Cost’???

There is a little known department in Whitehall called the ‘Behavioral Insights Team’; their job, to subtly alter the ways we in the UK act, look after ourselves and obey the law.
Known colloquially as the ‘Nudge Unit’ it was at first thought of as all a bit nutty, but now because of a series of successes is firmly embedded into Government policy. But what has this to do with businesses in general?

It All Started With Home Insulation

This is where their first coup comes in and it was all about home insulation. The problem, back in early 2011 was that despite the fact that with the huge subsidies being thrown at the issue (to reduce energy use) people were just not buying it, even though it would pay for itself in just a few months.

The team therefore set out to find out the reason for the low take up, and using common sense and a bit of research soon found the answer, people it seems, could simply not be bothered clearing the loft so that the insulation could be laid…

bill butcher - loft insulation

image courtesy of Bill Butcher

The answer was therefore simple, arrange for the company laying the insulation to clear the loft first, getting rid of any rubbish for you in the process. This simple change caused the uptake of the insulation to increase by 500%…

But What does this have to do with YOUR business?

Let me introduce you to the term ‘Friction Cost’. This is all about the simple fact that if you make it too hard for people to buy from you they simply won’t bother, not even if it will save them money..

This goes for both online and offline businesses. The ones online are very obvious, websites that have poor navigation, or make it too hard to buy from (having to register as a customer before you can buy in all cases is one sure way to reduce sales) are the most common. The answer here is an easy one, get your site checked over by a usability expert, they will quickly point out problems and thus reduce ‘Friction’.

But what about offline businesses? We have seen that in the case of home insulation that people will, even though it will save them money, not buy. So maybe you are the cheapest in town, but what iif your customers can’t get a car close enough so that they can put that heavy item in, and you don’t have any staff to help carry it for the customer. Or maybe, like the insulation issue you don’t offer to get rid of the old appliance?

Whatever, it could pay dividends to think about anything like this that could be holding back your sales…

Time for a brainstorm session I think…

 

 

0 replies

Leave a Reply

Want to join the discussion?
Feel free to contribute!

Leave a Reply

Your email address will not be published. Required fields are marked *