Issue 5: Fighting Fear to Win Business

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Harry Beckwith summed it up well in Selling the Invisible:
 
"The dominant emotion when buying a professional service is fear"
 
It’s true whether we’re buying legal, financial, consulting or other professional services.
 
We’re frightened the provider might not know his stuff. Or he might not prioritise us. Or we might be fobbed off with the "2nd team" after the sale is made. 
 
We worry whether our consultants will really understand us and tailor their recommendations to our unique needs, or whether they’ll simply rehash their standard report.
 
We worry whether our lawyers will put their best team on the job.
 
We worry whether our accountant will really thoroughly review our figures or merely give them a quick once-over.
 
We even worry whether we fully understand what we need in the first place.
 
And because professionals work on some of our most sensitive issues: our business strategy, our finances, our new building, our leadership style, defending our business against a huge lawsuit; our greatest fear is that they make a mistake and cause untold damage.
 
The impact of our fear is that we don’t buy. We either don’t buy at all, or we don’t buy from anyone we perceive as risky.

Risk is even more important in a recession

Many businesses assume that in a recession their clients’ main focus will be reducing costs. They try to win by reducing prices.
 
But for most clients, their main focus in a recession is reducing risk.
 
The impact of a recession is asymmetric. Some individuals or businesses suffer greatly. They lose their jobs or the business closes. For them, lowering prices doesn’t help – they’re not in the game any more.
 
For most businesses and individuals, the immediate impact is smaller. They lose some customers and so their profits are squeezed.
 
But what really hits them is the fear that they too might lose their job, or their business might go under.
 
So they become incredibly risk averse. They don’t commit to major purchases. They delay investment. They don’t tie themselves in to long term deals.
 
Essentially they’re trying to make sure that if the worst happened, they wouldn’t be saddled with major commitments.
 
And they absolutely don’t want to take risks on unknown or unproven suppliers who could let them down.
 
In the last big recession in the 70s, IBM managed to both put up prices and gain market share.
 
We all know the phrase "no one got fired for buying IBM", but do you know where it came from?
 
It was IBMs marketing team.
 
They reckoned that by positioning IBM as the safe bet, they could win even when they weren’t the cheapest or the most technologically advanced supplier. And they were right.
 
As we all know, in this current recession, car manufacturers have been hit hard. All have responded with price cutting deals. But one manufacturer did something very different.
 
in the US, Hyundai understood that fear was driving the behaviour of potential car buyers. They realised that purchases were being put off not because people had a little less spare cash in their pockets – but because they feared redundancy and loss of income. With that fear looming over them they were reluctant to commit to a major expenditure or to tying themselves in to a long term finance deal.
 
So Hyundai took on this fear head on. Instead of just cutting prices, they made potential buyers an offer: buy a car with a finance deal from us and if you lose your job in the next year, just return the car and we’ll cancel the deal. No commitments, no strings attached. Pure risk reduction.
 
The outcome?
 
At the height of the recession in January 2009, the big US carmakers Ford, GM and Chrysler all posted year-on-year sales down between 40-50%. Even Toyota and Honda posted figures down between 20-30%.
 
And Hyundai: sales up 15%.
 
By April, Ford and GM had been forced to match Hyundai’s offer, it was working so well.

What can Professional Service Firms do?

The first step is to identify what risks your clients perceive you as posing. Brainstorming these and validating with a cross-section of clients should set you on the right track.
 
A year ago, I contributed an article to an ebook on selling more by reducing perceived risks where I identified three categories of risk clients typically perceive when working with professional firms:
  • Competency Risk: will the service provider be able to do the job successfully?
  • Compatibility Risk: will the service provider and the client’s team be able to work together effectively to ensure the engagement is a success?
  • Solution Risk: do the service provider and client truly understand the issue? Will the work the service provider is being engaged to do actual solve the client’s problem?
Once the specific risks in these categories are identified, the professional or firm can take action to minimise how they are perceived.
 
For example: references, testimonials and the use of referrals can reduce the perception of competency risk. To demonstrate compatibility, turn a pitch presentation into an interactive workshop with your team instead – so the client can get a feel for what it would be like to work with them. Solution risk is best handled by a process of gentle and respectful questioning and challenging by the professional to ensure that the real issues are being addressed.
 
One final risk is the fear that large companies have of small firms. Will you have the necessary resources? What if you go out of business or are taken over? Will you have the kind of access to the latest thinking and best contacts that a large firm has? Small firms often don’t realise that their larger clients harbour these fears. but they do, and they must be addressed during the sales process.
 
A final recommendation: as you engage with potential clients and you try to understand their needs and their buying process, make sure you also ask what risks they perceive in the engagement they’re undertaking.
 
Often the answers will surprise you. But it’s only by knowing the specific risks your client perceives that you can do something about them.

Recommended Resource: ping.fm

Using social media such as Facebook, Twitter and especially Linkedin has become an increasingly effective marketing tactic for professional firms.

They’re not in the same league as referrals or networking yet – but their importance is on the rise. I know many professionals (myself included) who have won work from relationships initiated via social media.
 
But it does have a downside: it can be very time consuming.
 
One quick timesaver is to use the online service ping.fm. it allows you to enter a single status update message and post it simultaneously to nearly 50 social networks.
 
Now, of course, no professional is going to have 50 active social network accounts. But many have accounts on at least a few. By using ping.fm you can avoid having to make duplicate posts on multiple networks.

Quick Tip: Remove this "Kiss of Death" from your marketing

How many times have you heard a professional describe their firm as accountants (or lawyers or consultants or architects) "with a difference"?
 
And how often has what’s followed actually been different?
 
"Differences" I’ve heard have included:
  • We have great people Really? Would anyone say they didn’t?
  • We understand business I should hope so.
  • We try to add value to our clients And your competitors don’t?
  • Accountants/lawyers you can rely on Again, I should hope so.
  • We listen to you Gosh.

In fact, half the time, professionals who label themselves as "…with a difference" don’t even bother to tell us what that difference is.

 
If you’re different, make it something substantive: you specialise in a particular sector, you have more PhDs than any other research firm, you’ve never lost a case.
 

if your difference is based on something more intangible (as is often the case) then don’t just claim that difference in your marketing. Instead, demonstrate it.
That’s it for this month. I’m rather pleased I managed to talk about fear and the kiss of death in this Halloween special.
 
See you next month.
 

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