Most purchases come with an implied benefit that must be met or else the sale is void.  A basketball must bounce, a mattress must support your weight, a refrigerator must keep things cold and a TV must display broadcast signals. 

But, the implied benefit of personal services or intangible products is more difficult to discern.  If I’m not happy with the way the lawn service cut my grass, there is nothing to take back to the store.  The benefit implied by a lawn service is that they will do a professional job of manicuring my lawn.  However, my inference of their service is that I will be satisfied.  The gap between their implication and my inference is the risk I take when I hire them.  It is the “risk gap”. 

The risk gap exists even if the lawn service has expressly stated that it will manicure my lawn in a professional manner and even if I have told them I am happiest when the mulch circles around my trees have a radius of exactly four feet.  This is true because words are interpreted differently by those who say them and those who hear them.  A lawn service that offers a “professionally manicured” lawn may mean something entirely different than what I expect. 

Media sellers have to deal with the risk gap all the time.  Buyers of media have an expectation that something positive will happen to their business because of the media that was purchased.  Foot traffic will increase to a retail store because of the insert in the Sunday paper.  The number of phone calls will go up because of a television commercial or the number of visits to a web page will soar because the right key words were purchased from a search engine.  The risk that none of these things will happen make buying media a scary proposition for most clients. 

As a result, media buyers have put various safeguards in place to reduce their risk. 

One way that media buyers have reduced their risk is to commoditize media by finding a common way of valuing all competitors within a medium.  The circulation of magazines are compared to each other so that ads can be purchased based on cost per thousand reached.  Radio station’s ratings are compared to each other so that ads can be purchased on a cost per rating point basis.  Internet networks are purchased based on cost per thousand or for an even less risky approach – cost per click.  Commoditizing a product to reduce the inherent risk of buying it is commonplace. 

The effect of commoditized pricing is detrimental to media sellers and must be resisted.  When media buyers find a way to compare the price of each supplier within a given medium, they are one step away from effectively setting the price.  If a medium can not remain independent of commoditized prices, its sellers become less valuable.  One can easily see that if the commoditization of price is the only way for a buyer to reduce her risk, sellers of that medium will suffer financially.  So, the question for media sellers is “How do you reduce the risks of buying your media and sell more of it without succumbing to commoditized prices?” 

There are lots of ways.

Use Qualitative Data
Not too long ago, the president of NBC-TV was quoted declaring the viewers of his network to be of a higher quality than the typical television viewer.  He cited qualitative data that indicated NBC viewers were more likely to be home owners and more likely to have higher incomes.  He was working hard to find an aspect of his product that made it unique.  In effect, he was saying that you can't buy his ratings points for the same price as the other's guys because the people behind the ratings were worth more.  While network TV may have been new to this argument, radio stations and magazines have been familiar with it for some time. 

Qualitative data separates one set of ratings points from another.  As a result, qualitative data reduces the risk of buying one member of a medium at a higher price than another.

Add Value That is Unique to You
Can your magazine produce a seminar that attracts high-net worth investors?  Does your radio station have the best known personality in the market doing endorsements?  Does your TV station have special access to a celebrity who could be convinced to make a special appearance?  Does your newspaper have a bunch of signed books from a popular author sitting in a closet just waiting to be distributed as gifts to valued clients?  Can your website allow a picture of a car to come racing across the page, slide to a stop and have the driver pop out and address the viewer? 

These are all examples of value that you might be able to add to the media buying experience; value that is unique to you and can’t be matched by the competition or commoditized by the customer.  By adding this type of added value, you are reducing the risk associated with buying your media and pointing out the possibility that your competition represents a greater risk. 

Offer Referrals
Nothing reduces the risk for a buyer like a referral.  When my wife and I decided to finish our basement we called the contractor that had been sending us postcards for two years.  We were concerned about inviting a stranger into our home for eight weeks.  We were concerned that the quality of the finished product wouldn’t match the quality of the rest of the house.  Our concerns were allayed by our neighbors who acted as referrals for the contractor.  Not only did they vouch for him in writing but they invited us to visit their homes and see the finished product. 

Media sellers should gather testimonials from satisfied customers and trot them out whenever they ask a new prospect for money.  Referrals from your satisfied customers reduce the risk for your new customers. 

Offer Performance Guarantees
Nothing has hurt traditional media as much as the performance guarantees of new media.  Media buyers desire, no demand, accountability and they are getting it from everyone.  If you promised that an ad would reach 10,000 people and it didn’t, then you need to offer additional advertising to make good the difference.  If your performance guarantee is in writing, your buyers will perceive a dramatic reduction in their risk and buy more from you. 

Execute Flawlessly
Customers appreciate that you are offering them a good deal.  But, it doesn’t matter if you don’t run their advertising as purchased, forget to perform the added value and then get them an inaccurate bill in an untimely manner.  Even though media buyers have tried to commoditize media prices, they are always willing to pay a little bit more to the outfit that executes flawlessly. 

The opposite is true, too.  There is no way that a media buyer will consider investing money with you if the risk that you might execute in a sloppy manner outweighs the cheap deal you’ve put on the table.