How to Close Your Customers: The 7 P’s of Risk Reduction
This conversation originally published here.
Michael Yorba: Welcome to CEO Money I’m Michael Yorba. Thanks for joining me. I have Mark S A Smith of Bija Company, Bijaco.com. All right. Mark, seven P’s of risk reduction. Let’s walk through this.
Mark S A Smith: You bet you. We, as salespeople, our job is to do one thing and one thing only, and that’s to reduce the perceived risk of buying from us. When we do, they can buy. If we don’t do that, they can’t.
Mark S A Smith: So the number one P is proof. We have to prove to them that we can deliver what they see is valuable and what they’re willing to pay for is valuable. We can do that through case studies. We can do that with proof of concepts. The key element is the proof has to be contextual. It has to be relevant to their business. They can’t make the leap if we’re using a, let’s say, a transportation example, we’re selling to finance.
Mark S A Smith: Second P is process. The fact that we’re going to show them how to get this done. Here’s an important concept. An executive will never say yes to a project that they do not know how to manage. So if we’re bringing something that’s relatively complex, we have to show them how to manage the purchase process, the deployment process. We have to act as their project manager. In fact, the best sales people are project managers, and they have to see a heck of a lot along the way as they manage the customer’s project. So process, show them how you’re going to play together.
Mark S A Smith: Next is progress. Show them that every time you have a conversation, every time you send them information, they get more clarity and more certainty on the outcome they’re going to get. They connect the dots and say, “You look like you know what you’re doing. You’ve given me a lot for free. I am going to go with you because I feel confident you know how to get me there.” That’s progress.
Mark S A Smith: Number four is position. So how are you being positioned against their current choice? A really great example of that. I was talking to a gentleman that sells a recycling product, and he was going in there trying to sell the recycling. I said you got to flip the position. When you go in there and you call on your customer, I want you to say, “I am here to buy your garbage.” Wow, that changes the conversation completely. So how can you position their current choice as being inferior with your new opportunity?
Mark S A Smith: Next is price. If you can drastically lower the cost of something, if you can drastically increase the efficiency of something, they’ll be willing to take a phase one chance to bring it in and you can get proof.
Mark S A Smith: Number six is prestige. If you can show them that they will have something to brag about, something to write a media release about, something that will put them ahead of their competition. If you can use prestige to illustrate that this is going to give them far more reward than the risk entails, this can create an extraordinary reduction of perceived risk.
Mark S A Smith: And the last P is parachute. We’ve got to be able to show them we have their back. If something goes wrong, they’re not going to take a hit, either personally, or more importantly, professionally. Well, you do that through guarantees, warranties, outrageous money back, no risk, risk reversal. All those things can allows us to then very quickly get them to a point of comfort where they can buy from us.
Michael Yorba: Great. Great. Mark, I’m going to watch this one again and again. Thanks for being a guest on the show.
Mark S A Smith: Delighted. Thank you so much.
Michael Yorba: You’re welcome. You’ve been watching CEO Money with Michael Yorba. Thanks for joining us. Like us on Facebook, follow us on Twitter, and subscribe to our YouTube channel.
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