The sooner you discuss risk with the Buyer the better. Why? Two reasons:
1. You can dispel "false risk" by eliminating misconceptions the Buyer may have. 2. You address risk early. When it's time to launch your solution, you will be ready to deliver.
Gartner Group published a study about failed enterprise software implementations. 20-30% fail, and up to 80% exceed time and budget estimates.* They attribute much of these failures to organizational issues. For sales reps that sell these platforms, there is enormous risk of failure. To close the deals and make the number, these reps must confront the probable risks.
This article will provide best practices to discuss risk with your Buyers. To assist you further, sign-up for SBI’s Sales & Marketing Research Review here. At no cost, an expert from SBI will present the full research findings. You will have access to guides, templates and tools. These tools will help you win your next big opportunities. Included in this is theRisk Discussion Guide which you can download now.
This tool will provide the following benefits:
Uncover unrealized or unexpressed issues and obstacles.
Move the Buyer forward in their Buyer’s journey without force.
Structure the conversation to focus on real issues.
5 Types of Risk
Let’s be honest, most solutions do not perfectly solve a problem. You close a deal because your solution was the best fit. Not the perfect fit. It will have shortcomings. The customer will find reasons to be unhappy. Something might break.
You have a choice. You can ignore the risks and pretend that everything will be perfect. Or you can embrace the risks and discuss them with the Buyer. Here are the 5 primary areas of concern your Buyer may have. These risks can come from the client or from you. Either way, keep an open mind and address them.
1. Career. Apprehension that a failed implementation could lead to termination or demotion. This could be the toughest subject to talk about. If your solution is innovative and new, it could carry this added risk. Sometimes the status quo is what keeps a job. Will your Buyer get sacked if this fails? On the flip side of that coin, will this launch their career?
2. Talent. Risk their team lacks the ability to adopt and manage a new solution. Managing the status quo is the easiest way to hold down a job. For many, learning new capabilities is extra work for the same pay. This closed-minded attitude can doom a project to failure. Then there is the issue of raw talent. Your Buyer may not have the technical expertise to launch and manage your solution.
3. Execution. Uncertainty about whether the desired implementation timeline can be met. A great idea is only as good as its execution. Lack of management support can jeopardize a project. Perhaps the timing of a deployment falls in the middle of a busy season. Or maybe the needed resources are on leave or tied up with other priorities.
4. Operational. Fear of the potential business disruption during the transition to a new solution. Your Buyer’s organization may have competing responsibilities. There may be a potential interruption of service. A transition period my not be successful. Workflows may need to change and be re-trained.
5. Financial. Concerns regarding implementation delays or errors. Will a delay cause a loss in revenue? Will the Buyer assume extra costs? Would this give the competition (yours or the Buyer’s) an advantage? This pain is most easily quantified.
Schedule a meeting with the Buyer to discuss potential concerns. Position the meeting as one where you share the risks with them. Discuss some common concerns and some specific ones you see here. The objective is to come up with mitigation plans for each.
Use the Risk Discussion Guide to walk the Buyer through the risks. Develop a mitigation plan for each known risk. Share your findings with your manager. Then work it out with the Buyer. The sooner you discuss risk with the Buyer the better. You will prove yourself to be a trusted resource.