7 ways Cultural Risk Management through Control Theory

Control Theory

Because of the sense of apprehension or risk that many service customers feel, it is important that they be given a sense of control over the service experience or encounter in order to counter-balance this.

In this way they will feel confident about what they are experiencing, and the likelihood of post-purchase dissonance will be diminished.

Types of Control Theory

There are two main ways in which this can be facilitated:

  • Behavioral Control gives customers some actual control over their environment and what they are experiencing. Examples: Giving a hospital patient limited control over the flow of drip-feed painkillers; giving a hotel guest control over checkout time and procedures.
  • Cognitive Control gives customers the sense or perception of some control. Examples: Doctors and dentists explaining to patients the nature of particular procedures and what to expect; restaurants that accommodate flexibility in what customers order.
Perceived Risk and Information Search

Generally speaking, there are six main types of risk concerning to potential customers.

These are:

  • Functional risk
  • Financial risk
  • Temporal risk
  • Psychological risk
  • Social risk
  • Sensory risk

It should be noted that perceptions of risk differ between Eastern and Western cultures.

Means by which these may be reduced or eliminated by service providers include:

  • Demonstrable professional expertise
  • Building a strong reputation
  • Encouraging positive word-of-mouth and referrals from satisfied customers
  • Providing detailed explanatory information
  • Use the Web to search for information
  • Offering guarantees and warranties
  • Standardizing service delivery
  • Providing reassuring tangible clues and physical evidence
  • Using testimonials in advertising and other promotional material
  • Publicising achievements and awards
  • Cultivating repeat business and customer loyalty

Note: It also should be emphasized that, because most services are produced and consumed simultaneously, this presents a golden opportunity to solicit feedback firsthand from customers, to question and reassure.

Four ways in which might reduce the risk perceptions of a new client

Risk perceptions of clients in this type of situation may be reduced by:

  • Displaying publicly the qualifications of staff and the mission of the firm
  • Making available comprehensive and professionally presented corporate literature, in the form of brochures, folders, reports and the like, which provides an insight into the firm, its personnel and services, its background, achievements and reputation.
  • Introducing key members of staff
  • Providing a client list
  • Providing recommendations and testimonials from extant or past clients
  • Publicizing and putting on display special awards and commendations received.
  • Providing examples of the kind of work undertaken
  • Explaining the schedule of fees and how these are calculated
  • Offering to provide a free no-obligation initial consultation and assessment of the client’s needs.
  • Seeking third party support and recommendations.
  • Ensuring suitable and appropriate, complementary and conducive office surroundings.

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