Managing risks in the sales process
Whether you’re a start-up, SME or part of a large organization, growing the bottom-line is essential to any business survival along with a well-executed customer or lead acquisition strategy in building a continuous stream of potential & repeating customers. In developing a sales strategy, it is important to understand the customer’s psyche or “why do customers buy?”.
In summary, they buy based on :-
- Needs
- Features & Facts
- Benefits
- Value or perceived value (most inexperience sales people use price or “discount” mentality to close a sale)
- Risk
By connecting-the-dots to your solution to meet the needs of the customer’s will definitely help you close the sale. The relationship of the above can be further simplified to
- NEED -> (Features + Benefits + Value)/ (Risk + uncertainty)
Where “risk” is dependent on subset of features that create a subset of benefits that can address full value (in an ideal case) to a customer. The “uncertainty” parameters are elements influencing the buying process such as current business climate or unforeseen budget cuts that may or may not determine the final outcome. In most cases, you can tell that the customer is doing their own risks assessment with questions like , “where have your solution been used?” , “Do you have certification xyz?” or “ Can I have a free trial?” etc. Not having a positive answer does not equate losing the sale altogether, the key is by connecting-the-dots (in this case over them) to balance & mitigate the risks to your solution over the competitor’s. You should put yourself in their shoes & access the the balance between (F + B + V) from their perspectives over uncertainties & risks. Strategies like “money back guarantee” or “proof-of-concepts” can certainly tip the scale in your favor but only to be used depending on the situation & business capacity.
To develop a winning proposal, you often need to gain insights into the customer’s risk profile, which can be vastly different as illustrated above. For very large complex sales, you might need to provide the “risks” insights that might not even be known to the customer at all. For example, let’s say that you’re selling a “smoke detector” , rather than focusing on the design, size, functionality etc. , the customer might have purchased a similar one at a lower price point. If you are able to find out more from the customer, for e.g. that the previous product maybe can operate for 5 years vs yours that can operate for 10 years (with data or report to back-up) , you can easily swing the decision by reducing the risk for your customer forgetting to change the batteries before it stops working. Your product can cist 20% more but can provide savings due to longer operation. Try to help the customer navigate the TOC (total cost of ownership) rather than the price of purchase for the product & services.
Risk management itself is an established area used in industries such as finance, insurance, logistics, IT etc. There are a few methods & tools that can be used to manage risks such as SWOT, RR(risk registry) ,Spiral Model & AoA.
Risk management in the sales process provides you a strategic approach & hopefully enable you to help the customer with their crisis management (or to prevent one) in the future, an opportunity to win over a customer & grow your sales funnel!
Chinese word for crisis, wēijī is composed of two characters, one representing danger and the other, opportunity — JFK
Originally published at https://www.linkedin.com.
