Manufacturers spend a lot of time analysing and mitigating risk. Much of this activity is aimed at the internal processes they employ, the partnerships they embrace and in the economic climate they operate within. One area that is frequently overlooked is evaluating and mitigating risk from the point of view of their customers.
Inaction is a form of paralysis. It is, in reality, an action unto itself.
Understanding the assorted risks the prospect or customer faces is key to building a better customer relationship—a relationship that will hopefully evolve into a customer partnership that features all of the mutual benefits associated with a partnership.
Understanding others starts with gaining some level of empathy for the person you are dealing with. In our discussion, this means understanding the specific risks your customer may perceive or confront. Some of these are very generalised and others are more specific. Regardless, they are all concerns to be addressed.
10 Risks Your Customer May Confront
Misunderstanding Pains or Failure to Identify Needs
We all are adept at understanding when things go wrong. The hard part is understanding why they are going wrong. In business, this is frequently evidenced by poor financial results for a quarter or a year. Less obvious are missed sales targets, surprising losses of “sure thing” sales or account defections. Regardless, someone is quite rightly bound to ask why these things happen.
Answering that “why” question is tougher than pointing out the issue in the first place. Politics, “blamestorming” and other daily realities of corporate life will frequently complicate the process of answering the essential question of cause. Sometimes this does not become apparent until solutions are being evaluated, which may or may not reveal the true nature of pains or needs.
Salespeople must be aware of this from the earliest phases of the selling cycle. For complex issues, they must seek answers beyond the inputs provided by a single contact. Early questions must be focused on understanding the nature of the issue causing pain and only then can possible solutions be discussed or evaluated.
Care should be taken to gather information from multiple sources within the customer’s organisation. Just covering one person’s concerns may get a sale, but does it really help the customer?
Getting the sale and losing the customer shortly thereafter is not good business.
Misunderstanding the Solutions Offered
Buyers are frequently at risk in terms of truly understanding the capability and limits of any given solution offered for their specific needs.
Products can be oversold or benefits overpromised. Prejudices related to the vendor or product proposed can obscure an accurate vision of true benefit delivered. Misunderstanding the solution offered is just as dangerous as misunderstanding the needs and requirements.
Again, sales must be prepared to fully engage with the customer and be open to discussing these types of concerns without being defensive. High-quality customer references and product technology such as CPQ will go far in helping the customer gain confidence and trust in the proposed solution.
Risk of Excessive Caution
Most people who buy things have experienced the terrible feeling of being deceived or otherwise mistreated by a supplier. Regardless of the reason, justified or not, the result is skepticism when dealing with almost any supplier or vendor after that occurs.
This abundance of caution can go beyond healthy levels and turn into a total lack of trust in anyone proposing a solution or selling a product. This is a blindness that will prevent the buyer from seeing the benefits of a quality solution when presented. This may be tied to the individual, the company offering the solution or the product itself.
Regardless of the reason, the buyer will suffer because they will be unable to move forward with a potentially successful solution evaluation.
Sales must find a way to mitigate this mistrust or it will become an obstacle to all communication with the buyer. Seeking additional internal contacts may be necessary. Although, care must be taken to not present the appearance of “going around” the buyer.
The use of qualified references, the effective quantification of specific issues matched to specific solutions, aided by CRM and CPQ technology are useful in this process, as well.
Overbuying or Underbuying
Buyers are well aware that sales folks want to sell and maximise the value of any sale in which they are engaged. No one likes to be oversold. They are also well aware that purchasing a solution that is only partially effective in addressing their needs is equally galling.
The goal is obviously to align the selected solution perfectly with the specified need. This requires communication based on honesty and trust. The sales rep and the buyer must establish a relationship that is based on that goal of perfect alignment.
For sales, this is predicated on being customer-success focused. This is what is meant by making your customer a hero. Time spent on the front end of the sale delivering useful content related to the customer’s pains and challenges goes a long way in establishing trust before one-on-one contact is even initiated. Customer portals that offer high-value content to visiting prospects are an excellent way to establish the vendor as a trusted purveyor of information.
Once engaged, CPQ can guide the pain and solution conversation toward a successful conclusion by placing seller and buyer on an equal footing in the configuration and proposal of the most perfect solution possible.
Obsolescence of the Purchased Solution
Anyone who has purchased a new automobile knows the feeling of disappointment from seeing the next model year car advertised with some feature or look that is appealing. In business, it is more complicated. Technological development is always in progress. We all know that whatever we buy will
Buyers are wary of buying a solution that is sold primarily in an effort to eliminate existing inventory and make room for new models. The key to avoiding obsolescence during any purchase is to first assure that the solution being purchased is indeed efficacious in mitigating the pain or issue being experienced.
For Sales, this issue is addressed best in an honest fashion. Positioning a solution as being just right even though the pending model will offer this or that feature that may be nice, but not necessary is an effective way to present the product honestly and with full disclosure. The buyer can determine if sacrificing the added functionality available in the next product iteration is a worthwhile compromise in light of pricing and current availability of a solution.
Lack of Post-Sale Support and Recourse
Buyers frequently have concerns about the post-delivery phase of a product acquisition. How will installation and implementation be accomplished? What if the solution is not effective? How will maintenance of the product be delivered in the future?
Buyers have to look beyond the features and benefits of the specific product. The product will hopefully perform effectively for many years. Many changes will occur with the buyer, the market they serve and the economic climate in which they operate. Will the vendor be responsive to helping them address those changes as they occur?
Sales must present any solution offered in terms of the whole product. Features and benefits alone cannot mitigate fears about support after the sale. The implementation process, the product support process and ongoing evolution of the product should all be addressed in the proposal offered by sales.
Sales can bring the new customer into online communities devoted to users of the product or even introduce them to product user groups who share experiences related to the product or solution sold. This provides the customer with access to more impartial information based on real-world usage.
Sales can address immediate concerns of installation and implementation by the identification of specific responsibilities associated with making the solution work. If a third party is involved, some level of referenceability should be provided.
Warranties, guaranties, service agreements and contracts should be carefully explained and understood prior to acceptance of the product.
Loss of Reputation
Buyers assume risk when they make a buy recommendation to their own companies. That risk is tied to the performance of the product and vendor they select. While a poor choice may result in a loss of future business for the vendor involved, the repercussions for the individual buyer may be more severe.
Large product purchases are frequently seen as career-making or -breaking decisions. The individual involved will be a hero or villain depending on the result. Sales can go down the street and try again with another prospect. The buyer may go down the street as well, but it may be to seek a new job.
The buyer will want more assurance than slick product sheets, glowing customer stories and anecdotal verbal assurances. Sales has to provide more confidence inspiring evidence to ensure a successful sale.
For complex, high-ticket products, Sales will need to provide access to active users who are successfully using the solution proposed. A few companies in the world may have a reputation that inspires buyer confidence by itself. This is becoming more and more rare as time passes.
Customers want something substantial in terms of talking to someone who is unbiased. Sales can introduce happy users to prospective buyers, and they can connect buyers to industry analysts and supply them with articles about successful implementations.
Perhaps most essential is to simply treat buyers with respect and understanding. It doesn’t matter who is recommending you if you are minimising your prospect’s concerns or intimating that they are being foolish to be concerned.
Overpaying for a Solution
Value can be defined in many ways. Price is one such data point; a dollar amount linked to value delivered. The problem is that value is in the eye of the beholder. Buyers don’t want to overpay for products, and Sales doesn’t want to lose money on a deal or leave money on the table.
Being a tough negotiator on either side of the table doesn’t mean one party is necessarily trying to screw the other, it is more likely a part of the process of getting to the truth.
Being able to clearly define and show value is the best assurance a buyer has to address the fear of paying too much for a solution. What some guy down the street pays for a product is not nearly as important as how well price and value are aligned in the customer’s eye in relation to the solution being proposed.
Sales has numerous tools to address this fear and to help assuage it. During discovery, an effort should be made to quantify the pain felt or need in terms of dollars and cents. This monetisation of the problem provides a useful metric for both the buyer and seller to evaluate any solution considered.
ROI and understanding how the buyer calculates ROI is essential to making the numbers work for the customer. A discussion with the customer’s finance group can provide useful guidance in this regard.
Acting in Haste
Buyers do not want to make big decisions impulsively. The buying process in most companies provides some level of protection from this by limiting the expense amount authorised for individuals and sharing responsibility for purchases made.
Solutions that are presented in the form of a projected vision of future perfection may be too effective for some buyers. They will interpret this utopian view with mistrust and feel some level of deception at work.
Sales should be wary of overpromising results for any product. Quantification of specific needs and the mitigation of those needs, item by item, is far more effective than promising perfection.
CPQ technology helps with this by tying the configuration of any solution proposed to inputs received from the buyer related to the specific pains and needs being addressed.
Inaction is a form of paralysis. It is, in reality, an action unto itself. Frequently, inaction may seem safe, but in reality, it’s a high-risk choice. For buyers, inaction stems from confusion or an inability to accurately understand the needs and pains being experienced.
Just as debilitating as the failure to understand needs is the inability to grasp the nature of a proposed solution. It is human nature to resist making a choice without adequate information to inform that choice. At that point, a choice is little better than a guess.
The natural reaction is to put off the choice and avoid doing anything.
Sales can effectively address this by assuring that the prospect is provided with access to high-level information about their situation. This can be delivered in the form of white papers or position papers aimed at educating the reader. Additionally, once the buyer is more confident in the discussion of the problem or pain they are experiencing, the solution discussion can proceed with the mutual evaluation of this or that product or feature.
Sales can help address this lack of confidence with patience and useful information. Customers want to fix issues, but they want to be sure their choices are rewarded with success.
Keeping the customer’s perception of risk in mind is key to Sales adopting and embracing the customer’s ultimate success as a measure of its own. The perception of risk drives behavior for all of us. Mitigating and addressing that risk is essential to achieving our goals and objectives in Sales and life in general.
Great sales reps instinctively understand what is troubling to their prospects or they at least understand that their prospect is troubled. Put yourself in the customer’s shoes and think about what they are trying to accomplish.
Seeing risk from the same point of view as your customer is key. It will help you address and mitigate their issues faster and more effectively than just repeating features and benefits and providing verbal assurances of safety.