Managing Risk

To be successful, you must effectively learn to manage risk.

You know that your are trustworthy, and your customer thinks you are trustworthy. Good start. Being considered trustworthy and actually being trusted to fulfill a million-dollar contract are two different things. US consulting firm Synectics Inc.. carried out some inspired research that accounts for the difference between these two concepts -- it is summarized in the trust formula:

trust = Credibility x intimacy

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risk

The formula shows that your ability to demonstrate credibility and build relationships is directly proportional to trust. But trust is inversely proportional to the level of risk involved in making a decision -- how much the client has to lose. The top of the equation is within your control. To be successful in sales, you need to demonstrate credibility and intimacy, which is comprised of behaviors such as empathy, affability, sensitivity, and likeability. Intimacy speaks to how safe and secure it is to work with you.

So it's the lower part of the equation -- risk -- that's less within your control and works against your ability to build relationships. To be successful, you must effectively learn to manage risk.

With that in mind, you as a salesperson must constantly ask yourself what you can do to make any commitments less risky for the customer. Remember the old adage: "Nobody ever got fired for hiring IBM." That because the risk was much lower in hiring Big Blue than a less-established high tech company.

ACTION POINT: Look for ways to minimize your customers risk.