Managing risk is an important part of any business purchase, and indeed any large consumer purchase. Salespeople who can manage risk perception and help customers reduce risk have an advantage over the competition.
Risk reduction is something that takes place right the way through the buying process. Sales people who learn to help customers reduce risk and mitigate the perception of risk are more successful than their competitors.
Before a buyer decides who to meet with, they will have researched potential vendors. For this reason it is important that they can easily find references and recommendations in the form of testimonials and case studies. These need to be available on your website, from your blog, and from your social and business network profiles.
As the sale progresses the customer will want to confirm their initial assessment of your capabilities as a supplier by looking to add more information and detail to the information that they already have. They will want to reduce the risk further by talking with existing clients – those in your case studies or additional references.
Finally, in order for you to close the deal, customers may seek to reduce risks further in the form of guarantees or indemnities.
Not all referrals or recommendations are equal. Customers typically place more reliance on people that are closer to them. They tend to trust, in descending order :
- Personal experience. If suppliers have performed well in the past they become a known factor which means the risk of working with them is reduced
- Recommendations from colleagues. A vendor who has worked with other people in the same organisation represents a lower risk
- Approved supplier lists. Risk is shared if buyers use suppliers that have been approved by other people in their organisation
- References provided by existing customers. Working with suppliers that have previously worked with other people in your field provides evidence of experience and quality
- Public opinion. While reputation is very rarely a reason to select a supplier it can be enough to make sure that they are put on to the shortlist
- Guarantees and indemnities. While these help to ensure the risk is shared between the buyer and supplier, they are indications that the perception of risk still exists.
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