Sep 22, 2008

Fear of Loss: The Savvy Entrepreneur Series

The two strongest motivators in selling are the FEAR of LOSS and HOPE for GAIN.

When you're making your sales pitch, how often do you utilize FEAR of LOSS to persuade people to buy your product or service?

While many people claim that "fear of loss" is a negative tactic, it nevertheless is proven effective by many of the most effective salespeople throughout history.

Military Generals use fear to intimidate their opponents. Politicians use fear to throw their opponents "under the bus" and win elections. Business leaders use fear to position their company as the "gorilla" and their competitors as "chimps". Salespeople use fear to undermine the strength of competitors and maximize their own product's benefits to a prospective customer.

I recall a saying in the high tech industry, where it was widely known in the early 1990's that IBM, the large technology service provider, utilized FUD (fear - uncertainty - doubt) tactics to create doubt and undermine credibility of their competition to such a high degree they could charge 30 - 200% more than competitors for essentially the same levels of service. They also won business that otherwise might have gone to a competitor.

Examples of ways you can use FEAR of LOSS to position yourself as the best choice include:

"How can you be sure your current provider will be there when you need them?"

"Who will answer the phone at 3:00 a.m. when the system goes down?"

"What training have they received on the products they recommend?"

Some ways you can demonstrate you meet the fear or concern include:

"You're on our mind: With our "alert-status" 24/7 service and 4 hour response, you can rest assured your system's care is in good hands. Not only that, but our "proactive care" program will make sure you have fewer needs for alerts or downtime in the first place."

"You come first: With our "executive alert" plan you will know you always have top priority with our company."

"Your needs - delivered professionally: our people are trained on the systems you use. As a result, we're able to deliver more knowledge, keep your systems running with the least amount of hassle. This will keep your team focused on your business, and both save and help you make more money doing what you do best."

These are examples of marketing statements within the high tech industry that would position one company above another.

Individual competitive situations can get even more nasty. I once saw my coworkers work hard to win a large mainframe support contract - or so they thought. The agreement was signed by the CIO (Chief Information Officer responsible for technology at the prospective company) earlier in the day. During the "celebration dinner", the CIO received a phone call. When he returned to the table, he bore a troubled look on his face. "Fellows, I'm not sure how to say this, but I've been overruled and we're going with IBM," he said. He then explained that IBM made it clear that they might not be so agreeable to offer the code for their new chip if they weren't responsible for supporting the mainframe service. They cast doubt on whether updates would happen in a timely manner and basically said the customer would be a fool to switch vendors. They delivered this message by calling their "friend" on the board of the prospective customer. That board-member then overruled the CIO. That's how high IBM's relationship went. And that is how powerful the fear-tactic ended up costing a multi-million deal for a sales team that they'd seemingly won just moments earlier. Months of hard work and countless hours went down the drain.

Fear of loss is a strong motivator. Fear, properly applied, will help you win more often. Make sure both your marketing and sales pitch utilize this tactic.

Up next: HOPE for GAIN.

How has fear worked for you or against you in business? Comment below to contribute your experiences.

Copyright © 1999-2008 by ARRiiVE Business Solutions. All Rights Reserved. SUBSCRIBE.

Like it? Share on or Stumble Upon!

No comments:

Post a Comment