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Risky Business: Avoiding Last Minute Sales Losses
I'll never forget my meeting with the VP of Sales for a hot telecom company. They'd loved my proposal, so I figured we were getting together to kick off the project.
"I'm afraid I have bad news for you," the VP said. "We think your training program is superior to the other ones we've looked at. Your pricing is fair. And your ability to tie it in with our new product launch is unsurpassed. However, we've decided to go with your competitor."
My jaw dropped. I stared at him in shock. Then he continued, "If you get hit by a Mack truck, our entire training investment is gonzo. We just can't do that."
In short, he meant that my company was too small to do business with. Working with me entailed more risk than he was willing to take.
That was the day when the concept of "risk" truly hit home for me. Our prospects deal with it all the time. But often we, as sellers, are totally blind to what a risky decision we can be.
In today's business environment, we have to be aligned not only with our prospects' business objectives, but also their risk temperament.
To your prospects, risk means the cost of making a mistake. It could be financial, social, psychological, or even emotional. Risk is about fear of change.
Chris Mercer, CEO of Mercer Appraisal, found this out early in the life of his company: "When we were smaller, we realized that there's a concept called 'safety' in the minds of most buyers. From their perspective, it's a multi-variable function of size, longevity, customer list, perceived quality, external affirmations (speeches, articles, books), and many other things. We've been working for more than twenty-five years to be the safe choice in our field."
That's what we all need to do. But it all starts with identifying what your prospects perceive as risky. Here is a list of just a few things they could fret over:
- Projects not delivering results;
- Losing money; missed deadlines;
- Your company's financial solvency;
- Cultural fit; compatibility;
- Quality of your work;
- If your expertise is right for them;
- Accuracy of claims;
- Your length of time in business;
- If you're too big to care about their business; and
- If you're too small to handle their account.
You may pooh-pooh some of these as no big deals, but believe me, I never thought a Mack truck would impact my ability to get business, either.Minimize the Risk
Nobody wants to make a bad decision. People don't like the unknown; they fear it. They're leery about making any change when there's the possibility of a career-derailing failure.
Your prospects need to feel they're in good hands. So here are some you can use to reduce their perceived risk in doing business with you or your company:
- Leverage qualitative data. The more data you can have that supports your proposal, the better. Internal documentation (case studies, assessments) should be combined with external sources of validation. If at all possible, share relevant analyst's reports, studies, and articles.
- Ensure transparency. Today's prospects want to know the truth, so don't shade it. In this social media age, where customers freely voice their opinions online, you can be assured that any issue about your offering, customer service, and financial stability can easily be uncovered.
- Manage their expectations. Marketing strategist Kristine Maveus-Evenson says, "If both of you are clear about objectives, milestones, budget, scope of work, deliverables, and times lines, this builds trust. If you discuss this from the onset, it eliminates the FUD [fear, uncertainty, and doubt], which helps to mitigate their perception of risk."
- Engage multiple stakeholders. Prior to any proposal or presentation, talk with all the people involved. Consultant Jeff Garrison recommends talking to them for at least fifteen minutes to getting their perspectives. This reduces the risk that your primary contact will be blindsided by turf issues or hidden agendas at the end of the decision-making process.
- Offer references. Your willingness to openly share references with prospects makes a big difference. Certainly, you have your top clients who love you. But also consider offering your three newest customers, because they're most likely to relate to your prospects fears. Also, because they've just chosen you, they are likely to be strong advocates.
When your prospects are selecting which company they'll work with, certainty is a crucial factor. Unless they feel confident they're making a solid business decision, one that will help them achieve their business objectives, they'll stay with what they have. It's just plain easier-and certainly less scary.
If you ignore your prospects' fears, they won't go away. Instead, they'll lurk silently under the surface, wreaking havoc with their nerves, until your prospects finally decide that changing now isn't best for them-even if it is.