If you worked as a doctor or sky-diving instructor, you would be well-versed in your job's risk levels. It would feel like second nature to talk about it. Why not in sales?
Risk management in sales feels less like second nature and more like a second thought. Understanding your risk is essential for your business and the team's ongoing health, but it doesn't require rocket science.
Let's start with the basics.
What is sales risk?
Sales risk is the uncertainty that can occur in the sales process due to issues with consumers or processes, sales failures, or product instability.
It's essential to understand them because sales risks can profoundly affect the amount of money that your sales team is bringing in and hence cause problems for your bottom line.
Here are some of the best ways to understand and create better risk management for your sales team.
Risk Management Best Practices for Sales Teams
Create a checklist for every sale.
Checklists make it harder to miss the obvious. As Atul Gawande writes in The Checklist Manifesto, they help challenge bias and assumption and cause us to reassess our regular behavior patterns. Create a checklist of the critical steps and the clarity needed for each deal, and ask your reps to check it every time. Here are a few things to include:
Is the deal moving forward, and is your contact responsive?
Do you know if who you are talking to is the decision-maker?
Have you missed or skipped steps in the sales process?
Do you feel "weird" about the sale moving forward? Is something off?
Did you qualify the lead?
Has the close date changed, or is it unrealistic?
Did the value of the opportunity shift sometime during the process?
Is your customer still keen to buy?
Go through this list and any other questions you might uncover to assess if a deal is at risk of falling through.
Without clean data, your sales team members are at risk of providing incorrect quotes and may not offer the best possible customer experience. Close the information gap between your sales rep and your customer to create an even more straightforward sales process.
Get your strategy right.
What is sales risk, if not a reflection of the need to pivot your strategy to be successful? Avoid a full, out-of-the-blue shift by assessing your customer needs and wants regularly and updating your plan to reflect them. Perhaps the best example of this risk is Kodak, who ignored the changing technology tides and failed to update their combative strategy to defend themselves.
Spend time going over your learnings about your customer base to ensure that your strategy always fits their needs, and you aren't going to get left in the dust.
Sales is a whole-company effort, and there is nothing that can cause more risk than a crumby hand-off or mishandled expectations. Disjointed handovers from marketing to sales at the start of the sales process or sales to customer success at the end of the sales process can be a deal killer and lead to churn.
Take time to set expectations internally about what the handover should look like so that you can set expectations with your customers.
Be proactive about performance management.
Risk management in sales should already be a big part of your team's performance improvement strategy. According to Forbes, 57% of sales professionals miss their annual quotas. Is that your team? What are you doing about it?
Use a sales scorecard and have regular conversations with your team members about their performance to identify your organization's sales risks. The more proactive you can be about these conversations, the better equipped you will be to nip them in the bud.
Offer ongoing continuing education.
Only 3% of people believe that salespeople are trustworthy, partially because salespeople sometimes sell parts of the product that don't exist. This behavior isn't entirely on the salesperson, though—they may be misinformed or undereducated on that part of the product and unable to reach out to get more information mid-call.
Regular training on your product and services should be a big part of your sales culture. Not only should your sales team be reviewing your training documentation, but they should also spend some time writing documentation of their own. By working through this process, your team will evaluate any gaps or weaknesses in internal knowledge or docs. The more understanding you can have about where you're underperforming, the more work you can do to address it.
Make risk assessment part of your day-to-day.
It's not about being ever vigilant, but the more frequently you talk about risk management in sales, the more comfortable it becomes.
Work every day with your team to make conversations more accessible and your opportunities to diminish risk more present. Create a checklist for ways to think about your own bias in the sales process. Ensure that your data is as clean as it can be by doubling down on your integrations and information in-flow. Manage the performance of your team and how you all interface with other teams within your company.
Lastly, continue to educate your sales team on your features, new and old, and give them opportunities to improve your documentation. So, to return to the first point, what is sales risk? It's no big deal if you know where to look and take the time to preempt it before it happens. You're on your way.
Originally published Jan 4, 2021 7:30:00 AM, updated January 04 2021