To Close the Deal, Know Your Client’s Risks and Articulate the Cost of Not Acting
In 2013, CSO Insights published an industry survey summarizing deals won and lost—in this instance, how often forecasts lined up with actual closed deals. Of the number of total forecasted deals, 26% were lost due to “no decision.”
Many “no decisions” can be traced to a seller’s inability to address how their potential client sees risk and the failure to paint a compelling picture of the cost of not acting. In our sales and negotiation training seminars, we teach sellers how to prepare and increase their chances of a win by carefully considering risk and reward from the buyer’s perspective. Traditionally, sellers focus primarily on the reward/benefit/value to the buyer of completing a deal. The risk/reward exercise has a dual value: By convincing yourself, you increase your odds of convincing your buyer. If you don’t believe it, they won’t, either. Plus, it sheds specific light on the risk of no decision.
In the technology sales arena, you must inquire to find out which of the most common risks are likely to weigh heavily on the mind of your buyer. The technology could fail. The implementation could be too long and costly. Their name could be on a system that was never adopted or used within the organization. They might be waiting on a better alternative in the marketplace or they may see the opportunity to make a better investment in another area of their business. These common risks encourage delay or no decision.
Remember, your competition may not be anywhere in your arena. Your solution must be the best use of capital across the business.
However, there is another set of risks too often ignored. “If you don’t act, you’ll be out of compliance,” or, “Without this change, you won’t be able to continue your market growth.” You need to point out where the negative impacts of not acting lie for your seller. You should never assume they know all the risks, because they sometimes overlook them. This is particularly true when the technical solution team at the buyer is disconnected from the team that is measured by the business change. IT risks and Line of Business risks are often very different. These are all opportunities for articulating risk/reward scenarios that move you out of the “no decision” column.
We find that many sellers sell themselves short by not mapping the risk/reward scenario and practicing it beforehand with themselves. This process certainly worked for Ben Franklin, who studiously made a list of pros and cons before embarking on a decision. If this basic exercise isn’t part of your sales practice, add it today. Why? If you don’t articulate the risk and reward factors clearly, in writing, chances are they’ll vanish when most needed. Simply writing them down increases your retention and anchors it in your mind—which boosts the chance you can anchor it in your buyer’s mind.
Making a detailed risk/reward map is one of the many proven practices we teach sales and negotiation professionals across the globe, preparing them for greater rewards and lessened risks of their own. Find out more about our negotiation and sales training.