How to Deal With a Deal-Killer: RISK


After you’ve completed your sales presentation or product demo, the buyer enters the evaluation phase of the buying process, and a scary monster frequently rears its ugly head: risk.  Risk can kill a deal, and its threat can increase as your prospect evaluates your offering.

What is the opportunity cost of going with this solution or vendor?
What will happen if I commit and spend this money?
Will I truly get the value I need?
What if I’m missing something?

These and a million other questions can plague buyers and stall their decision-making process.  When a buyer wants to buy, but he has risk concerns, the go-to tactic is to attempt to reduce the risk by reducing your price.  Most people simply default to this tactic because they don’t see any other obvious way to do so.

If price is the only issue, then the buyer is already committed, in his mind, and is negotiating to purchase. This is a key point!  Too many times, price is dropped when the real issue was risk.

How to identify the real issue: price or risk?

If you think a buyer may be using price to reduce risk, then ask this question:

Mr. Buyer, outside of price, is our offering what you want to buy?

If he says yes, then he is actually in the commitment phase and is trying to buy.  In that case, do this.

If he says no, then he has not yet decided to buy, and price is not his true concern.  His real problem is the risk associated with saying “yes” to you.

In this case, ask to set everything else aside and talk about his concerns.

Mr. Buyer, may we set price aside, for a moment, and address your other concerns about getting the outcomes you desire from using our product/service?

How to overcome risk-related objections

Risk is emotional in nature and may involve or be driven by a personal motive.  It could be power, approval, comfort, security, or any number of factors.  Since risk has an emotional component, just trying to lower risk by addressing facts, features, or processes may not be enough to reduce their feelings of risk because it doesn’t make an emotional connection with the person.

To reduce the potential for conflict, address the emotional issue of risk before moving to the logical answer.  You can do this by understanding their risk issues and restating them.  This offers your buyer emotional validation and lets them know they are being heard and understood.

For example, you might say, “I understand that you are concerned with the time frame of the implementation and the negative consequences of a delay. That is a reasonable concern, and others in your position have had the same concern.”

If you have conducted a customer-focused demo, you already identified these risks up front.  Now you can review the solutions included in your proposal to address those risks by offering to introduce them to other clients who had similar proposals, take a plant tour, do a pilot project, place guarantees and/or penalties in the contract, or even meeting your executive team, for instance.

What NOT to do

The buyer is now evaluating your solution and your company once again. If an objection is raised, go back and review the solution and correlate outcomes to the proposal.  Whatever you do, there are two things to avoid at all costs:

1. DO NOT use “closing techniques” to overcome objections.

Don’t say, “I know how you feel, and others have felt that way, but found that…”

Techniques like this that were popularized in the 1980s and 90s only alienate the buyer.  They are manipulative and break trust.  Once you’ve broken trust, it takes a lot of work to regain, and it can kill a deal.  Instead, build trust by asking valid questions and demonstrating value.

2. DO NOT drop your price in an attempt to make the customer buy.

This is just another manipulative closing technique, and the buyer knows it.  If you do this, you just confirm the buyer’s concerns that there could be more risk involved.  Risk must be overcome before price concessions are made!

You are also conditioning the buyer to wait until the last minute to get more price concessions.  Instead, reduce risk by going back to your presentation to review the solution, and discuss if any needs or criteria have changed.

A real-world risk reduction example

I explained this concept of the buyer trying to reduce risk with price to a sales manager who worked for a Caterpillar dealership; we’ll call him Sam.  Sam called me a week later and told me that he had followed this advice, and it worked.

One of his reps had an $800,000 deal that had stalled. The buyer kept saying the price was too high, but Sam would not allow the rep to lower the price.  After talking to me, Sam followed my advice and discovered what the real issue was.

The buyer used a cheaper bulldozer brand that broke down often, so he carried $20,000 worth of parts in inventory.  He was concerned that by buying Caterpillar, he would have to purchase an additional $20,000 of Caterpillar parts inventory.

To address his concerns, they offered the buyer a one-year extension warranty on parts and service. The buyer loved it and inked the deal.

What Sam offered was not a real cost to him. The brand his buyer was using routinely had major break downs within 2-3 years of service.  But Sam’s Caterpillars will go 4-5 years before having any major service issues.  Sam reduced his risk – without lowering the price – and he bought.

So before you lower your price, be sure cost is the real issue.

Never lower price for a buyer who is not yet ready to buy

Even if he decides to buy due to a deadline or some other kind of pressure, his risk concerns will not go away.  He will become a high-maintenance customer who requires a lot of hand-holding from you and your customer service team.  You can only create a happy customer who is a raving fan if you satisfy all his concerns before he signs on the dotted line.


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