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Reduce Risk for Your Buyers

In this short video, RAIN Group President Mike Schultz why making the ROI case in sales is no longer enough.


In our What Sales Winners Do Differently research, we learned that reducing risk has shot up in importance as a criteria for buying today.

Now, for every 100 times you as a seller find advice to sell the return on investment case, you might find just one piece of advice focused on minimizing the perception of risk for the buyer.

This is interesting, as well, because it was just 40 years ago that marketers and sellers didn’t focus much on results and impact. The transition away from features and benefits had just begun. But fast forward to today and every company’s marketing and sales messages promise some kind of results, often wild results, as their first foot forward.

Yet while everyone’s promising results, buyers regularly report disappointment.

In fact, in a study by Bain, 375 companies were asked if they believe they delivered a superior value proposition to clients. Eighty percent said yes. Bain then asked the clients of these actual companies if they agreed that the specific company that they bought from actually delivered this superior value proposition. You know what’s funny? Only eight percent agreed.

Buyers simply don’t believe they either get what they expected or were promised by sellers. They’ve been burned in the past and are therefore skeptical of sellers and their claims.

Most every seller I know has lost a sale to no decision where the seller believes that the buyer was crazy not to move forward because the return on investment case was so compelling. The seller will say something like this to me: "I can’t believe they didn’t see it." Oh, they saw it. They got it. They just didn’t believe it.

In these cases, the buyers typically perceive that the risk of not achieving results is too high or the buyer might think something like, "Well, this is impossible or it’s improbable to actually achieve these results." Or, they perceive that they provider themselves is too risky. They might think something like, "I think this is possible, but working with this provider is a potential liability because of this or that or the other reason."

In other words, if the buyer isn’t convinced of both the maximum return and the minimum risk together, the seller might lose to no decision or the buyer might just perceive someone else to be safer to go with.

And how do you reduce the perception of risk? You need to substantiate your claims and you need to get buyers to believe you in 4 different areas:

  1. They need to believe in you.
  2. They need to believe that the product or service will perform as described.
  3. They need to believe your company is a good company to associate with.
  4. They need to believe that they’ll actually achieve the eventual results that you promise them.
Additional Reading
The #1 Way to Decrease Anxiety and Gain Leverage in Sales Negotiations

Alison Brooks and Maurice Schweitzer, two researchers at the Wharton School at the University of Pennsylvania, conducted an experiment to induce varying levels of anxiety among negotiators.

One group was subjected to the not-so-melodious screeching strings from Psycho. The other group was treated to calming Water Music by Handel. After listening for a while, the groups were sent off to conduct simulated negotiations.

5 Sales Strategies for When Buyers Go Cold

By: Mike Schultz and Jason Murray

After three months of talking and promises of moving forward, your fully qualified, enthusiastic champion is ready to pull the trigger. You send them a proposal and…silence.

How to Maximize Prices and Improve Margins

With increased product and service commoditization, sellers in almost every industry complain about price pressure and shrinking margins.

At the same time, there are some sellers and sales organizations who are consistently winning sales against lower-priced competitors and growing their margins.

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