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Risk Aversion: Friend or Foe?

As much as we’d love to have the sales process be a straight line from A to B, the reality is it’s much more of a zig-zag path with lots of bumps along the way.

That’s because we’re humans, talking to other humans.

And there’s a glaring part of our human nature that trips us up… All. The. Time.

It's this: humans are highly risk averse. We’re hard-wired to monitor our surroundings for danger, and to avoid loss at all costs.

But we don’t even realize how risk averse we are. So our risk averse nature is like an operating system that works invisibly in the background.

Your buyer’s risk aversion will silently sabotage the sale, even when you think it should be a no-brainer for them to buy. And your own risk-aversion will wreak havoc too!

But don't attempt to resist or overcome risk aversion. Instead, work with it – like they do in Aikido.

I’ve identified three main ways that risk aversion is a foe in sales – and what you can do to transform it into a friend.

Number 1

Foe: Risk aversion in your buyer is a foe because they resist making changes (i.e. choosing your product) for fear of failure, or loss of money, or any other unintended consequences. The promise of ROI will not be greater than their fear of losing what they have now.

Friend: If you’ve done your due diligence in discovery, and you understand the true size of their current state business problem, you will be able to accurately highlight the consequences of not making a change. You will be able to demonstrate that if their current state problems don’t get addressed, they will incur a loss.

(It goes without saying that your assessment must be data-driven, and must always be in their best interest. If you can’t quantify and qualify the size of their current state problem, you shouldn’t make any recommendation at all.)

Number 2

Foe: Risk aversion in your buyer means they don’t want to do business with you until they trust you. Chit-chat and small talk will not help build trust. Their risk averse walls will stay up.

Friend: Recognize their need for trust by establishing your credibility. Ask questions that demonstrate your expertise and interest in the bigger picture of their business – not just on where your product fits in. What matters most to them is the problems in their business. Earn their trust by showing you care.

Number 3

Foe: Risk aversion in us sellers is a big problem-o too! We want to avoid the risk of pain, discomfort, and failure – which is why we avoid the toughest activities like cold calling!

Friend: You can talk to your own risk-averse brain. You can thank it for wanting to keep you safe. Walk yourself through the worst-case scenario so your brain sees that the risk isn’t that scary after all. Then make this calculation: for every activity that you avoid because of the risk of pain – how many sales is it costing you? Your risk averse brain won't want to lose that sale so you'll get in action!

In summary

By acknowledging risk aversion (in you and in your buyer), you empower yourself to work with it rather than working blindly against it.



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