Risky Business
By Michael W. McLaughlin
"We need more time to consider our options."
That's not what a consultant wants to hear in response to a proposal, but it's common enough as clients ponder which consultant to hire.
You may think client waffling is a signal that you have not finished the job of selling the value of your proposal. After all, most consulting projects come with high price tags, and communicating value is at the top of most consultants' lists.
But often the value of the project isn't in question. Instead, the risk involved in achieving that value is what holds up the hiring decision.
Value Is Not Enough
We've all experienced nagging doubts before making a major purchase. You may wonder if the product will work as advertised, if there are better alternatives, or if the price is right. If you were certain of the answers to all the questions, purchase decisions would be no-brainers.
Unfortunately, we rarely have all the answers. But we can make informed choices based on both the anticipated upside and the downside of purchases. Our clients make their buying decisions in much the same way.
Clarifying the upside, or value, of your solution for clients is imperative, but it's not enough. A winning sales process gets beyond project benefits to help clients answer essential questions about the risks associated with achieving that value.
In one instance, a consultant proposed to help a client redesign the company's distribution network to lower transportation costs and speed up deliveries to customers. The client agreed that the proposed improvements were worth more than the project would cost, but concluded that the short-term risk to customer service was too high to go forward with the initiative.
Until you've put to rest the client's key concerns about risk, don't expect a positive decision, no matter how much value you promise.
Different Strokes
Understanding a client's perception of risk can be tricky because everyone has a slightly different take on what's risky. Some people, for example, will gladly plunk down thousands of dollars to buy the latest high-flying stock in the hopes of hitting the jackpot. Others strive to eliminate as much uncertainty as possible before making any major decision.
In a complex sales environment, with multiple decision makers and influencers, expect to encounter people who are comfortable with risk and those who make endless requests for additional information to help them fully assess potential pitfalls.
What makes the consultant's job even more complicated is that a client's definition of risk can shift as the sales cycle progresses. Early in the sales process, a client's assessment of your proposal might focus on the business risks to the company, such as whether you can deliver the promised results and what could happen to company profits if you don't.
Once you've gotten past those hurdles, other concerns can emerge as the key buying criteria--like the career risk of hiring you. As the ramifications of the proposed project become clearer, the client may be thinking, "What's going to happen to me if this project succeeds or fails?"
It's not unusual for an executive sponsor of a successful initiative to leap frog others to land a challenging new position. But a project failure can also put the brakes on a promising career. One rising executive was "promoted" from a leadership role to a staff position after overseeing a poorly managed project. He eventually "left" the company.
At some point, almost all buyers will weigh the personal risks and rewards for choosing one consultant instead of another--or going through with the project at all. For a client to comfortably say yes to your proposal, you must convey compelling value and help the client understand and accept the presumed risk of hiring you.
You need to anticipate the different--and evolving--perceptions of risk that motivate the various client stakeholders. Be prepared to address those concerns head-on.
Ask and Listen
How do you figure out all the potential dangers that clients see lurking in your proposal?
Although you may not get complete answers, it never hurts to ask clients where they see risks.
Don't miss any opportunity to help clients sort out potential dangers. If you leave clients to analyze those dangers on their own, they may come to the wrong conclusions.
Some clients, like lots of people, treat their perceptions of risk as private concerns, which they only reluctantly reveal to others. So, don't expect all clients to give straight answers to your questions. They're rarely trying to hide something from you. Instead, they might not be comfortable talking about the possibility of negative outcomes.
The simplest way to understand clients' perceptions of risk is to listen carefully to the questions they ask. They provide clues about what is on the client's mind. Pay particular attention to questions that begin with phrases like, "How do we know..." or "What if... " or "How can you/we be sure that...?"
With knowledge of the client's concerns, you can lay out your risk reversal strategies. For example, you can explain how you will implement communication programs to prevent schedule snafus, progress payment strategies to address fee concerns, or you can provide additional references to lessen the risk of choosing the wrong team. You get the idea.
The point is to identify the specific red flag that's bugging the client and remove it.
Some consultants' method is to recite for clients a laundry list of all known risks, hoping they'll get lucky and hit on real concerns. This one-size-fits-all approach can easily scare off the risk averse and gamblers alike. Naturally, you shouldn't hold back on discussions of legitimate risks, but focus on those that are at the top of the list for your client.
Also, you'll head off many concerns by being forthcoming about any preconceived notions of risk. Some clients hesitate to hire technology firms, for instance, because of the spotty track record and perceived problems with IT projects. So, be ready to talk about the obvious risks of your proposal and how you'll address them during the project.
Connect the Dots
Consultants know that selling value has a stronger impact on clients than peddling methodologies or tools. But you can't overlook the relationship between value and risk in the sales process.
Find ways to communicate value and reverse client risk, and you're on your way to a new project. Otherwise, expect to hear your prospective clients say, "We'll get back to you next week."