Managing risk in the sales process
Ts. James Lai
Chairman & Founder at Malaysia IoT Association | Prof. Technologist | TEDx Speaker | GSMA MWC Speaker I European Digital Week
Whether you're a start-up, SME or part of a large organisation, 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. "uncertainty" 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.
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 be known to the customer at all.
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