Reducing Risk Increases Sales

Customers are, quite rightly, cautious these days. If they have not purchased from your company before it is natural for them to feel that they are taking a risk when placing their first order with you. As a professional sales person you have to convince the new customer that the risk is slight in order to close the sale.

There are five types of risk that may concern a new customer and so stop them from placing their order with you. These are:

1. Technical risk
The customer is afraid that your product will not work reliably. In these cases you could present neutral test results (i.e. those collected by a neutral 3rd party). Or you could show data that proves to the customer that you rarely get complaints about the product they are interested in. If you can, get a satisfied customer to demonstrate the product, or organise a demonstration on the spot, as this is a powerful way to prove that the technical risk does not exist. A free sample or trial period, so the customer can prove to themselves that it works, can sometimes be helpful for closing sales in these situations.

2. Financial risk
All businesses need to ensure that they “buy best”, this means getting the right quality of goods for the least amount of expenditure. Your customer needs to be certain that the price of the goods you are offering corresponds to their value. Financial risk can be particularly worrisome for customers buying high-tech products. The prices of these tend to fall with each new development so closing sales in these situations can be difficult for the salesperson as the customer wants to “wait”. Some sales people offer price guarantees, while others expand the terms of the warranty to reduce the financial risk for the customer.

3. Physical risk
Some products may be hazardous to use. Customers who need to purchase such products will seek out those which are safest. If the customer sees a danger of injury in using your product, then invite him to training sessions or presentations on how to safely use it. Or you could provide for comprehensive instruction of the customer’s people as part of your sales proposal.

4. Social risk
This is the: “What will my friends and neighbors’ say if I buy myself that!!?” question that customers ask themselves. If a product typifies a certain group in society, or if it is simply just new, the customer may be cautious as they perceive there is a big social risk in buying it. You will need to track down ‘opinion-makers’ and gain their support for your product to help overcome this risk.

5. Psychological risk
The customer wants a product which matches his own picture of himself. Products which don’t match this picture are considered risky. You will need to convince him that your product does. Many customers will pay a lot for their image.

Whatever risks the customer perceives, the professional sales person will know how to help them overcome their reservations, so increasing their closing rate. Training can help sales people become proficient in these techniques.