Originally published 7/8/10
Put a big, fat glob of risk in your product pitch, package it as “excitement,” and you have a powerful sales tactic. Even a disclaimer plays a crucial role, not that it would matter to a buyer to read one:
“Do not attempt. Really. Do not do this. Stunts performed at sanctioned events. Specially equipped rally vehicle. Professional driver. Closed course. Obey all traffic laws, always drive safely and wear your seatbelt.” Right! Where can I get one of these cars to test drive? Such statements are motivating when the target buyer is male, 18 to 29 years old.
In a different, far away sales universe, the B2B salesperson sells his or her product to an older, equally risk-aware buyer, but without testosterone’s helpful property of making risk seem wildly appealing. B2B buyers avoid stupid risks. But salespeople frequently toss all risks into the same negative bucket, and choose not to discuss them. Finding risk transparency in B2B sales is about as common as finding a teenager without a PDA.
It’s easy to say you’re transparent, but harder to be transparent. Here’s a personal example for how not to do it: One prospect I worked with had installed—and de-installed—two mid-range ERP systems in four years. I was there because the company was preparing to rip out #3 as well. As vendor-victim #4, the company’s CEO told me point blank, “we need you to tell us everything that could go wrong with your solution.” “What don’t you already know?” was the unsaid reply that flashed into my mind. But even that sarcastic response would have been better than the feeble one I offered. I was totally unprepared for the conversation he wanted.
Why? Risk discussions weren’t part of my sales tool kit. My kit had the expected implements: Problem/Solution/Benefit statements, features and capabilities collateral, key differentiators, and a smidgen of Return on Investment fluff. No risk insights adding weight to the bag. Salespeople are rewarded for mowing down concerns about their own products, and for raising them about competitors.
Would a street-smart salesperson disclose that just yesterday, his company’s chief software architect took an unannounced sabbatical to go mountain biking in Peru with his girlfriend? Or that his CEO has discussed selling the company in the next 12 months? Stuff happens, and it’s classic FUD (Fear, Uncertainty, & Doubt) material. When our sources are credible, we spread this about the other guys, never about ourselves.
How transparent a salesperson should be about such sensitive matters tiptoes into the shadow of the Ethical Elephant, and I’ll stick to the periphery. Anyway, there’s a more pragmatic side to this discussion. Prospects aren’t deer in sales headlights. Not anymore. They’re fully capable of learning about risks. But as many salespeople know from we’re-putting-this-on-the-back-burner-for-now conversations, prospects are also prone to the stasis of no-decision purgatory. Could risk confusion be one cause? Could salespeople be more valuable by intelligently guiding buyers to recognize and consider the risks that change creates—even if it means discussing their own?
Author Sharon Drew Morgen believes they can. In her book, Dirty Little Secrets: Why Buyers Can’t Buy and Sellers Can’t Sell, and What You can Do About It! she wrote, “Until buyers understand, and know how to mitigate, the risks that a new solution will bring to their culture, they will do nothing.”
Risk matters. If it didn’t, the shortest closing sales pitch, “nobody ever got fired for buying IBM,” could not have helped sell tons of IBM iron and services against arguably superior technology. But the sword cuts both ways. One thing I’ve learned: when I haven’t identified my risks, they will be identified for me—never a good thing. Too much perceived risk and my opportunity is toast. Too little, and I might win—but when the first glitch occurs, my prospect will never forget how I over-promised and under-delivered.
Back to “Proving the ROI.” Accounting Professor Bob Kemp told me this year that business decision makers ask three questions about value: what do I get, when do I get it, and how certain are the answers to the first two questions? Déjà vu. That’s what the CEO wanted to know. And because his company was a candidate for the Guinness Record for Most Scrapped ERP Systems, he was screaming for help. But without a clue about my own assumptions and without understanding the CEO’s risks, I was only slightly more useful to his decision process than a Ouija board.
Which risks did he need to learn? Ideally, the causes for the failures of his first three ERP systems. But most salespeople don’t have the luxury of performing detailed project retrospectives. A general rule of thumb: any risk that has high likelihood and high impact on a financial claim, estimated performance improvement, or outcome is a candidate for discussion.
Had Steve McConnell’s 660-page book, Rapid Development, been available at the time, I would have presented this adapted list of project risks:
Feature creep: escalating the project by adding new feature requests
Gold-plating: insisting on the “latest and greatest” technology, instead of “good enough.”
Software defects, interoperability problems, and operating system instability
Schedules developed without factoring constraints
Inadequate software design and poor usability
“Silver-bullet” syndrome: expecting software or technology will solve problems they’re not intended to solve
Weak personnel: not having the right talent in the job at the right time
Communication problems and interpersonal friction between developers and customers.
You’ve probably already recognized the same risks can occur for customers and vendors. But discussing these risks would have provided me the opportunity to describe how my company managed them.
How much better would my meeting have been had I brought these risks to the forefront? How much more effectively would my prospect have been able to make calculations about financial return and estimate time to value? How much more trust could I have fostered in the buying experience? Much. For all three questions.
Oh—the outcome of my sales call? Despite fumbling the CEO’s question, I won the order. After three failed vendors, he was running out of alternatives. Best of all, my software ran on IBM.