THE LAW OF RISK

Risk is an unavoidable and an inescapable fact of life. We are always acting, in every way possible, to reduce risk. This is the entire purpose, for example, of the insurance industry. Insurance is simply a way of pooling risks by taking premiums from a large number of people in order to cover the losses that will be suffered by a small number of them.

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In every purchase decision, customers are seeking every way possible to reduce the risk and uncertainty involved in buying anything from anyone.

_{Lets assume for example, that one of our industrial giants has plants and offices in different states. Management consist of five key executives. If this corporation has a rule that one of the five may fly, it has avoided the risk of a fatal airplane accident. Since such regulation would not be practicable, a policy that not more than one of the five may fly in any one airplane is more realistic.}

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Furthermore if the company carries a $1,000,000 life insurance policy on each of the five executives with the proceeds payable to the corporation, should one be killed in an accident the payment might well equalize the loss of profits for which this individual would have been responsible.

Unfortunately not all business risks are subject to as satisfactory a solution as was suggested in the preceding hypothetical case.

YOU ARE SUCCESSFUL IN SALES TO THE EXACT DEGREE TO WHICH YOU CAN POSITION YOURSELF AS THE LOW RISK PROVIDER OF YOUR PRODUCT OR SERVICE

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This is one of the most important concepts in selling and an idea that you must build in all your sales efforts. Once customers have decided that they want to purchase the product or service that you sell, that doesn’t mean you’ve made a sale. You must then convince them that of all the suppliers of your product or service, customers will enjoy the highest degree of security and certainty, and the lowest degree of risk, if they buy it from you.

Often the reason that you don’t close a sale is because the customer doesn’t feel secure in your promises concerning the use, enjoyment, or follow-up service and maintenance of your product or service. Convincing the customer that this is a safe decision is one of your most important tasks.

THE PRIMARY OBSTACLE TO BUYING ANYTHING IS THE FEAR OF FAILURE, THE FEAR OF MAKING A MISTAKE IN THE BUYING DECISION

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The fear of failure is one of the most powerful of all blocks to human action. The fear of making a buying mistake is rooted in previous experiences. Perhaps the customer bought a product that invoked criticism or ridicule. The customer may have bought a product that broke and couldn’t be repaired.
Everyone has had bad buying experiences. As a result, everyone is conditioned to be cautious and fearful about having those experiences again. This fear of failure is a major obstacle that must overcome before you can sell anything.

EVERYTHING YOU DO IN SALES INTERVIEW(OF SERVICES) EITHER RAISES OR LOWERS THE PERCEPTION OF RISK AND THE FEAR OF FAILURE

When you ask people to buy something, you are asking them to make a decision, to put their egos on the line. You are asking them to part with their money and gamble, to take a chance that you will deliver on your promises. For these reasons, and many more, the decision to buy is charged with emotion. Everything you do or say is important. It adds to or detracts from customers’ perception of risk and uncertainty.
In any sales situation, and especially in a larger scale, nothing is neutral. Everything that you say either moves you toward the sale or moves you away from the sale.

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Never allow yourself the luxury of saying, “That doesn’t matter.” Everything matters. Everything counts. Everything is either adding up or taking away. It’s either helping or hurting. Your responsibility is to make sure that everything you do or say is helpful in some way in that it lowers the perception of risk and increases customers’ feelings of security in buying from you.

HOW YOU CAN APPLY THIS LAW WITH IMMEDIATE EFFECT:

Think of the likely risk that an intelligent customer might perceive in buying your product and getting the benefits that you promise in exchange for money. What could you do to reduce this perception of risk?

Ask your customers directly what risks they see in buying from you. What could you do to offset these specific risks and make your customers feel more comfortable making the buying decision?