Go ahead, take the warts-and-all approach to winning and keeping customers. Researchers say it’s the better way. 

Instead of only promoting the great things about your products and services – and we know there are many – let customers know any drawbacks, too.

Harvard Business School researchers Ryan W. Buell and MoonSoo Choi found companies can attract more customers who spend more and stick around longer when they lay it all out there: Show customers the downside of a product. Compare products, explaining what makes one worse than the other.

“When customers have a more holistic view of the trade-offs of an offering, it helps them make more well-informed choices, which enhances the quality of the customer relationship.”

The study

The pair looked at a major bank, the accounts it offered and what new customers bought and used.

People who opened an account after they learned about downsides – perhaps higher fees or lower interest rates – spent 10% more each month than customers who only heard the benefits! And after nine months, those wart-watching customers’ cancellation rate was 21% lower than the people who only heard about the benefits.

On top of that, the customers who heard about the drawbacks were better customers. They were 11% less likely to make late payments.

Ask these 3 questions first

You don’t want to run out and start telling customers about everything that has or can go wrong with your products. But a little exposure won’t hurt. Researchers suggest considering these questions before you decide what’s best to reveal:

• Will the wart reveal a problem we should be fixing anyway? If the flaw you share is actually something that should – and can – be fixed, shore it up. Don’t share something that makes your organization look like it doesn’t operate efficiently or with trust.
• Will the wart make our competitors seem more appealing? If the flaw is something your competition can or does capitalize on – because they’re truly better in that area – you don’t want to flaunt it. Instead, you want to minimize it.
• Will the comparison paralyze customers? Letting customers know the whole story builds a transparent relationship. But sometimes too much information is overwhelming and customers abandon the choice altogether because they can’t make a decision. If you can make short bullet-pointed information that compares the pros and cons, it’s safe. More detail is too much detail.

Resource: Adapted from Internet