One of the biggest take-aways and “duh” lessons from my entrepreneurship professor at Emory was mitigating risk for customers – one of the greatest hurdles entrepreneurs face when selling. Risk, in this case, is tied to the buyer’s job security.
My recent conversation with the Managing Director of a venture capital firm reiterated the importance of mitigating risk for the buyer when assessing/ adopting a new solution. Consider this:
You’re the VP of information security at a Fortune 500 company, and setting up a new data farm. There’s a new startup touting impressive server performance and security layers at half the cost of IBM. However, IBM is one of the premier hardware manufacturers with thousands of customers. They’re reliable and have been around for decades. Who do you choose?
There are many answers you need before you can choose, but the gist is the inherent risk if $hit hits the fan. With a startup, you as the VP may be questioned for selecting a provider with little reliability history. In choosing IBM, much of the risk is shifted towards the large company. Should a server go down, you, personally, might not have been able to curb a catastrophe since IBM couldn’t even handle it.
In my experience with Body Boss, coaches weighed the risk of players not having access to their programs because of network connectivity issues vs. having reliable spreadsheet saved on the desktop that could be printed.
The VC recalled how many startups focus on either the benefits of their startups’ offerings OR risk savings opportunities. Strong startups and salespersons, however, discuss opportunities/ benefits AND risk mitigation (i.e. 99.99% server uptime, 99.8% fulfillment accuracy, etc.).
When you’re selling, approach empathetically and consider the risk for buyer.
What are your thoughts on risk for buyers? What approaches have been successful when selling to others as they relate to both the benefits and the risks involved?