Selling: Risk-bring it on!

“It’s risky! That’s a big risk! Can we really risk all that?”

Risk is often thought of in negative terms – but what of it’s opposite, more positive partner – opportunity.

From a commercial perspective, if I can mitigate someone else’s risk more effectively than they can, then this risk represents a commercial opportunity. Whilst the risk itself may be packed with negative connotations and impact, the mitigation of this risk can be exactly the opposite and represent a solid commercial opportunity.

We need look only so far as the COVID-19 pandemic for an example of this. Despite the horrendous consequences of this, designing, testing and distributing vaccines has created multiple commercial opportunities to meet these needs. Entire sectors have changed their practices as High Street shops that have been forced to close their physical premises have boosted on-line shopping exponentially.

So as a supplier, what can I do to spot these commercial opportunities?

Firstly you have to clearly identify your customer’s challenges, pain points or simply perceived concerns. Many industries do this as a matter of course, conducting risk reviews and identifying possible ways to ease their potential customer’s pain. Others are not advanced.

OK, what next?

You need to know how much a potential customer is prepared to spend to mitigate this risk to an acceptable level. You also want to know what is the probable impact of not doing anything. It is unlikely that you will be the only company to provide a solution, so what are the other options for the customer? They could use a competing offering or complete their tasks differently. During the pandemic some countries have favoured vaccines, and other isolation and testing. Some consumers switched to on-line shopping, others simply stopped buying anything but essential items.

Finally you need to establish if it’s worth it for you. If you have to invest significant amounts of time, resources and money on providing this solution you need to be sure that you have a reasonable probability of return. We read about the few big COVID vaccine providers, but we don’t talk about the many more who joined the race to develop a vaccine, but didn’t find a viable solution in time. Similarly, how many smaller companies switched to online selling, only to find that they couldn’t maintain the initiative?

Agreeing to manage a risk needs realistic assessments built on credible data. It needs the right questions to be asked at the right time, and it needs a way to capture the initiatives and the constraints. This is the function of a commercial risk register where you can capture risks, investigate mitigation options and assess which are the most realistic ones for you.

Approached the right way, risk can open up multiple commercial opportunities, managed poorly it can result in severe financial consequences.