Some of the features of the service sector can create insecurity among the customers. In order to potentially reduce this insecurity, there are two possible routes that can be taken:

• Reducing the perceived risk of a ‘bad buy’. This implies the improvement of the perceived quality.
• Reducing the perceived importance of a ‘bad buy’. This implies decreasing the possible consequences of it.

The customers themselves are also trying to reduce their insecurity by walking these two paths. This gives service providers the chance to gain the trust and confidence of potential clients by walking the same roads.

Improving Quality Perception

To improve the perception of the quality of the offered service, there are two possible arguments that can be used in the service sector:

• Content arguments (or cognitive processing): potential clients use all kinds of strategies to decrease the chance of a ‘bad buy’. A high perceived chance of a faulty decision is usually a consequence of a shortage of knowledge or a bad image. Before buying, often a long and extensive orientation and choice process is gone through. Here, the potential client will mainly focus on content arguments to develop trust. However, the specific characteristics of services (immateriality, co-production, …) can hinder this evaluation and render cognitive processing only partially possible.
• Pseudo-arguments (or affective processing): since cognitive processing is, at best, only partially possible, the potential customer will have to rely on all kinds of indirect clues, called pseudo-arguments. Through association and simple reasoning, an image about the provider is formed (‘office looks expensive, so they must be good’). In fact this is a surrogate for actively collecting information and considering it. Tricky here is that the meaning of pseudo-arguments differs among potential clients (using the same example: ‘office looks expensive, so they must be good at scamming people’).

Reducing Importance of a ‘Bad Buy’

The insecurity of potential customers can also be reduced by decreasing the perceived risks of a wrong decision. These potential risks include financial, psychological, social, and functional ones. In general there are two ways to reduce the perceived risk of a bad call:

• Factual risk reduction: adopting a lower price level, or limit the amount of intrusion in the client’s organization or life.
• Perceptual risk reduction: convincing potential customers to attach less importance to the costs. For example, simply claiming a ‘not satisfied, money back’ guarantee is often enough to convince potential clients, regardless of the fact that refunds are actually being made.