How To Convert Risk Into A Winning Sales Strategy

Every sales opportunity carries with it risks on the part of the buyer and the seller. These risks often assume one of three forms:1. Risk that your product/service won't perform as you promised. This includes the risk that you won’t support the product as promised after the sale.2. Risk that the customer won’t live up to their commitments.3. Risk that making the wrong decision could be career limiting to the decision maker.Here is a winning sales strategy, that I call Starting Small, that effectively reduces the real and perceived risks for buyer and seller alike, accelerates customer decision-making and increases your chances of winning the order.1: Start new business relationships with the smallest order possible.In every transaction between new business partners there are unknowns and concerns and a desire on both sides to minimize the risks. Starting a business relationship with a small order is the best way for the buyer and seller to become familiar with each other and set the stage for a profitable long-term relationship.Starting Small is the easiest way for sellers to build a customer’s trust and confidence in their ability to live up to their promises to deliver a product that works as advertised.Customers will usually welcome your suggestion to reduce the size of an initial order—especially if you are a smaller company or a new player in your industry and haven’t previously done business with them. In that case, helping the customer make the lower risk decision increases your chances of winning their business.For instance, show your prospect the value to them of doing a proof of concept with a small order. Starting small enables you to demonstrate in a low-risk manner how your solution seamlessly integrates with their existing systems and procedures and provides the value that you said that it would. This gives you a base of trust and credibility from which to expand to meet the customer’s broader requirements.As a seller, Starting Small will enable you to get your foot in the door and give your company a chance to prove itself. At the end of the day, who cares if your initial order is small? Once you get the first one, if you do a great job delivering on your commitments then you’ll be in a prime position to win all future orders as well.2. Starting Small will reduce your risk as the seller. Risk in a sell/buy transaction is not one-sided. Neither are trust and confidence. A key reason to start a customer relationship with a smaller initial order is to lower your risk in a transaction. Rather than depend on the customer to live up to their end of a larger deal, make it easier for them to start small and grow incrementally.There are tales too numerous to count about smaller companies that won a large order from their dream customer and ended up being mortally wounded by it. How many times has a seller won a big order from a big company, bought inventory and hired people to support it, and then had the customer freeze all purchases for three to six months because it experienced a temporary downturn in earnings? The seller is stuck with inventory and overhead it doesn’t need and begins to suffer under the weight of this unanticipated financial burden.Rightsizing your initial orders also reduces your sales risk. The bigger the order you are trying to win, the higher the level within a customer organization at which you’ll have to sell. With a smaller order, fewer internal barriers to the order will exist and it will be easier to keep the decision within the purview of lower level decision makers.3. Starting Small will tilt the competitive playing field in your favor. In a tight competitive sales situation, reducing the size of the prize is one of the best ways to tilt the playing field in your favor.If you are able to help your prospect understand the value of starting small it will provide you with a competitive advantage. This is especially true for small and mid-size enterprises competing against larger competitors. Typically bigger competitors need to take orders in larger bites on order to hit their numbers. When a prospect indicates that they are seriously considering reducing the size of their initial order, the big players will often take this as a sign that the prospect is backing away from their urgency to buy something. They will start to lose interest in the deal and leave a more open field for you.I worked for several successful start-ups selling mission-critical communications systems to some of the largest communications providers in the world. My biggest sales challenge was my customers’ natural inclination to purchase our type of product from the brand name companies in the industry. Starting Small was the sales strategy I used to steal the initial order from under the noses of the big guys and it was the catalyst for building substantial, profitable relationships with my customers. I knew that if I could sell the customer on the value of starting small that I would shift the competitive advantage to my side of the table.Starting small isn’t reducing the ultimate size of the project. It’s just reducing the risk of the initial engagement and opening the door to more business for you. Look at this from the perspective of the customer. By rightsizing the initial order, you make it easier for the customer to make a decision. That has tangible value to them. And to you.